Under the policy period rule, the coverage applies only to losses that occur during which timeframe?

• A. Before the policy period
• B. After the termination date
• C. During the policy period
• D. Any time during the binder term

Answer: (C)

The key idea is that coverage is triggered by when the loss actually happens. Under the policy period rule, a loss is covered only if the event that caused it occurs within the policy’s active window—between the policy’s effective date and its expiration date. Losses that occur before the policy starts or after it ends aren’t covered, even if a claim is filed later or during a binder term. The binder term is only a temporary proof of coverage and does not extend the window for loss occurrence. So, losses must occur during the policy period to be covered.