What does the policy period signify in an insurance agreement?

The policy period in an insurance agreement refers to the specific timeframe during which the coverage is in effect. This means it is defined by the inception date, when the policy starts, and the expiration date, when the policy ends. Understanding the policy period is crucial for both the insured and the insurer, as any claims made outside of this designated timeframe are not covered under the policy terms. This directly impacts risk management and financial planning for both parties involved in the insurance contract. The clear definition of coverage duration helps to set expectations for when protection is available and ensures that all parties understand the limitations of the policy.