What immediate effect does a new policy have if it shares the same effective date as an existing policy?

When a new policy shares the same effective date as an existing policy, the immediate effect is that it results in a preemption. This means that the new policy effectively overrides or supersedes the terms and conditions of the existing policy that is in place. Preemption occurs because both policies cannot simultaneously cover the same risks under the same terms for the same insured entity starting on the same date.

In practical terms, this situation often leads to confusion about coverage because both policies are active at the same time. However, the new policy would typically be viewed as the governing document. This principle ensures clarity in the insurance coverage being provided and helps prevent conflicts regarding what is covered in the event of a claim.

The other options do not apply in this scenario. For instance, while the old policy is not canceled outright, its terms are effectively overridden by the new one. There is no consent required from the customer for the new policy to take effect if both are aligned on the same start date, nor does it inherently create a coverage overlap, as the new policy's conditions are meant to take precedence.