What Does Date of Inception of the Insurance Policy Mean?
The date of inception of the insurance policy refers to the date at which the insurance policy goes into effect. From the inception date until the date the policy expires or is cancelled, the insured is covered by the policy.
While there are some exceptions, in most states the policy goes into effect as of 12:01 AM on the date of inception.
Insuranceopedia Explains Date of Inception of the Insurance Policy
The date of inception of the insurance policy is provided so that both the insurer and the insured are fully aware of when coverage begins. If this date was not clearly assigned, there could be confusion about whether or not the policy is in effect.
Since it delineates the insurer's obligations, providing a clear and explicit date of inception is very important. If a policyholder were to file a claim for an event that took place before this date, the insurer would deny their claim as coverage was not active and the policyholder would have to cover the costs themselves.
In errors and omissions policies that have prior acts coverage, the date of inception might be retroactive. This means that the policy is considered to have been in effect before it was purchased.