What do effective dates signify in an insurance policy?

Effective dates in an insurance policy are crucial as they indicate the specific time frame during which the policy provides coverage. This encompasses both the start date (when coverage begins) and the end date (when coverage ceases). Understanding effective dates helps policyholders know the period during which they can make claims and which risks are covered.

Knowing the start and end dates is essential for both the insurer and the insured to manage expectations about coverage and obligations. For example, a policyholder must ensure they have coverage before an incident occurs; if the incident happens outside the effective dates, the insurer is not liable for any claims. Therefore, the answer accurately captures the significance of effective dates in the context of an insurance policy.