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.
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. 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.
