policy period

Insurance covers you for a window of time, not forever. The policy period is that window — the stretch from when coverage starts to when it ends, after which the promise lapses unless you renew. Most P&C policies run for exactly one year, which is why so much in the industry is measured 'per year'. Think of it as the validity dates on a parking permit: drive in during the dates and you are fine; a minute after expiry and you are on your own.

Concretely, a policy might run from 1 March 2026 to 28 February 2027. A covered loss on 15 June 2026 is inside the period and paid; a loss on 5 March 2027 is not, even by the same insurer, unless a new policy is in force. The policy period anchors the two clocks an actuary cares about: how premium is earned across the window (you 'earn' the premium day by day as you provide coverage), and how exposure accumulates over the same window. Policies that start or end mid-calendar-year cause most of the bookkeeping complexity in P&C, because the period straddles two financial years.

Why it matters: the policy period is the unit that lets actuaries line up premium, exposure, and losses for the same span of time. It also interacts with how a claim is triggered — an 'occurrence' policy responds to events during the period, while a 'claims-made' policy responds to claims reported during the period (a crucial distinction covered separately). Getting the period right is the difference between matching revenue to risk and badly mis-stating both.