Policy Year
What Does Policy Year Mean?
A policy year is a 12-month period that begins on the effective start date of an insurance policy and ends on its anniversary. Unlike a calendar year, which runs from January 1 to December 31, a policy year is specific to the policy’s start date. The duration of a policy can span multiple policy years or be limited to a specific term or number of months, depending on the policy’s terms.
Insuranceopedia Explains Policy Year
For example, a policy year for a policy that started on January 10 would run from January 10 of one year to January 10 of the next. This policy would mature by one policy year every January 10. Additionally, some insurance companies offer rewards to policyholders who do not file claims over extended periods. For instance, an auto insurance company might lower rates or provide benefits to drivers who go a certain number of policy years without having an accident.
