The benefit of any auto insurance is the amount an insurer will pay out in the event of any given claim. This sum varies depending on the specific claim made and the terms and conditions of your policy. The benefit period is very simply the period of specific coverage under your policy, during which a benefit may be paid.
Why is the benefit period important?
The benefit period is important because you will need to know when you are covered, and when you are not.
If you are not currently inside the benefit period of a specific policy, in the event of an accident your insurer will not pay any benefits. This means that you will be personally liable for all expenses and damages resulting from that accident.
How do I check my benefit period?
You need to examine your insurance contract to determine when your benefit period is. It’s a good idea for current policies for you to have the expiry date in your diary so you can arrange additional insurance for when it expires.
In many cases your insurance benefit period will automatically renew once the old period has expired, conditional on sufficient funds being available in your bank account or on your credit card when the insurer tries to take payment. It’s important for you to check that this payment has been made – it is possible that even if the funds are available, that clerical or banking errors have interrupted the payment process. It is not your insurers responsibility for you to have current insurance and while the insurer will normally try and make contact with you if your payment has been declined, you should not rely on this.
In the majority of instances the benefit period will commence on the day that an insurance policy contract is accepted and payment has been made of either the first installment or the whole outstanding balance cost of the policy. However in some instances the commencement of the benefit period can be delayed, either at the request of the customer or at the insistence of the insurer. You should be aware that if your benefit period has not yet started, you are effectively uninsured by your policy and if you are driving and have an accident you will be liable for any repairs, compensation, etc. as your insurer will not pay benefits for this incident.