What is a insurance policy term?

Once the policy is active, it will remain in-force for a set period, called the policy term. At the end of the term, policyholders usually have two choices:

1. Renew the policy with their current insurance provider

2. Purchase a new one from another insurance company

Many policyholders also use the second option to get cheaper rates, but that’s not the only way to save on auto insurance premiums, among other insurance types.

If they experience a covered event during the policy term, they will need to file a claim to notify the insurance company about what happened and provide documentation as proof. The insurer will then investigate to determine the validity of the claim, and if it is, the provider will pay out for the losses. We will discuss the insurance claims process more deeply in a separate article.