Texas Adjuster Practice Test

What does the expiration date of an insurance policy signify?

1. The date when the policy becomes active

2. The last date that claims can be filed

3. The date on which the insurance policy expires

4. The deadline for premium payments

The correct answer is: The date on which the insurance policy expires

The expiration date of an insurance policy signifies the date on which the insurance policy expires. This date marks the end of the coverage period provided by the policy. After this date, the insurer is no longer obligated to provide coverage for any new claims that occur, and the policyholder must renew or obtain a new policy to continue insurance protection. Understanding this concept is crucial because it affects the policyholder's decision-making regarding timely renewal or seeking alternative coverage to avoid any gaps in protection. While other aspects of the policy, such as when claims can be filed or premium payments are due, are important in their own context, the expiration date specifically indicates when the coverage under that policy ceases.