A policy year is the 12-month period between the anniversaries of a policy. Unlike a calendar year, which is January 1 to December 31, a policy year depends on its effective start date. Depending on a policy, it may last any number of policy years or just a certain period or number of months.
For example, a policy year would be January 10 of one year to January 10 of the next for a policy that began on January 10. So, this policy would mature by one policy year every January 10. In addition, some insurance companies reward policyholders if they do not file claims over extended periods of time. For example, an auto insurance company might lower rates or give benefits to drivers who go a certain amount of policy years without an accident.
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