Policy Period

The policy period is the specific window of time during which your insurance policy is active and provides coverage. Most personal insurance policies run for 12 months; many personal auto policies use a 6-month period. The effective date marks when coverage begins; the expiration date marks when it ends. A loss that occurs before the effective date or after the expiration date is not covered, regardless of how long you have been a customer or how quickly you discover the damage after it occurs.

For property insurance, the timing of when the event happens determines which policy responds. If a storm damages your roof on the last day of your current policy period, the claim is covered under that policy even if you have already bound a new one for the upcoming renewal. Conversely, if a loss occurs on the first day after your policy expired because you forgot to renew, there is no coverage -- ten years of continuous prior coverage does not extend protection into the new period for even a single day.

The policy period also defines when certain time-sensitive policy obligations must be met. Most policies require that claims be reported promptly after a loss is discovered. The definition of promptly varies by policy form and state, but discovering damage from a prior storm months after the fact and then filing a claim can create disputes about whether the reporting was timely. Keep your renewal dates recorded in your calendar, respond to renewal notices early enough to review and compare options, and never allow a gap between the expiration of one policy and the effective date of the next. Even a single day of unintended lapse is a lapse.