What Is an Insurance Policy Period?

A family meets with their insurance agent to discuss coverage.
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DEFINITION

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.

Definition and Example of Insurance Policy Period

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

For example, suppose that you buy a new car insurance policy that begins on a specific date and ends exactly one year later. That one-year period is your insurance policy period. Your policy is in force during that time.

How Insurance Policy Periods Work

Your policy period is set by the day your policy starts, which can be any day of the month. It doesn't always start at the beginning of the month or year. You choose the 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. Then, you can be sure you won't get caught driving without insurance.

Policy periods are also important when you are switching car insurance companies. For instance, suppose your current policy period ends on the 20th of this month. That means you'll want to be sure your new policy begins on or before the 20th so you won't be 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 or year-long policy periods. Some carriers offer month-to-month policy periods, but they are rare and often only for high-risk drivers.

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

Tip

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

How Payment Dates Are Determined

One major function of a policy period is that it dictates your payment due date. If you pay in full, your policy 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, suppose you begin your policy on June 20th. In that case, 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; that will also be on the 20th of the month. All payments will be based on the date the policy began.

What Happens When Your Policy Period Ends

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

Note

It's always a good idea to know your policy period dates so you'll 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 period.

In some rare cases, a policy may be non-renewed, which means your insurance company is canceling your coverage after your current policy ends. You'll need to look for a new 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 bad track record, most 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 year-long car insurance policies; some may also offer month-to-month policies.
  • Policy periods are also important in determining your payment due date.

Article Sources

  1. South Carolina Department of Insurance. "Understanding Your Insurance Policy." Accessed Nov. 26, 2021.

  2. California Department of Insurance. "Auto Insurance Costs." Accessed Nov. 26, 2021.