What Is an Insurance Policy Period?

Insurance Policy Periods Explained

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An insurance policy period is the time frame during which an insurance policy is effective. The start date and end date are the cutoff dates on your documentation, payments, and coverage unless you renew the policy.

It is important to understand how policy periods work so you're prepared when your car insurance policy ends. That way, you can be sure to renew or change your policy in order to avoid any gaps in car insurance coverage.

What Is an Insurance Policy Period?

An insurance policy period is the time frame during which an insurance policy is effective, particularly when it comes to car insurance. All car insurance policies have defined policy periods, and the start date and end date are the cutoff dates on your documentation, payments, and coverage unless you renew the policy.

How Insurance Policy Periods Work

Your policy period is determined by the day your policy starts, which can be any day of the month—it doesn't automatically start at the beginning of the month or calendar year. You choose the coverage start date at the time of purchase.

If you don’t have any insurance at the time of purchase, set the start date on or before you plan to start driving so you don't get caught driving without insurance.

This is also important when you are switching car insurance companies. For example, if your current insurance policy period ends on the 20th of this month, you'll want to be sure your new policy period begins on or before the 20th so you aren't left without coverage.

Keep in mind that the length of a policy period can vary per insurance carrier. A large portion of carriers only offer six-month policy periods and yearlong policy periods. However, some carriers do offer month-to-month policy periods, though they are rare and often reserved for high-risk drivers.

You can find your policy period dates listed in a couple of different locations. Check your proof of insurance and the declaration page. You'll always be able to find the policy period information there.

Tip

Your car insurance policy period will be listed on most of your documents, but you can also ask your insurance agent what it is if you're not sure.

How Payment Dates Are Determined

A major function of a policy period is that it determines your payment due date. If you pay in full, your policy period will start when your payment is due. If you pay monthly, your payment will be due on the same day of the month as your original policy start date.

For instance, if you begin your policy on June 20th, your monthly payments will be due on the 20th of each month. If you pay your premium in full, your next payment will be due at the end of the policy period, which will also be on the 20th of the month. All payments will be based on the date the policy began unless other special arrangements are made.

What Happens When Your Policy Period Ends

When a policy period ends, your policy is up for renewal. You can either continue your policy and renew, or you can switch to a new insurance carrier.

Note

It's always a good idea to know your policy period dates so you know when your payment is due. They also let you know when to start shopping for a cheaper rate if you plan on switching at the end of the policy period.

In some rare cases, an insurance policy may be non-renewed, which means your insurance company is essentially canceling your policy after your current policy period ends. In that case, you'll need to look for a new car insurance carrier before your current policy is over—whether you want to or not.

Most drivers won’t have to worry about this outcome, though. Unless you are a poor driver with a poor track record, most insurance companies will be eager to keep your business.

Key Takeaways

  • An insurance policy period is the time frame during which an insurance policy is effective.
  • Most insurance companies offer six-month and yearlong car insurance policies, though some may also offer month-to-month policies.
  • Policy periods are also important in determining your payment due date.