For a one year commercial insurance policy - is the expiry date the same date as the inception, but one year later? Or is it the day before exactly one year later?
e.g. For an inception date of 5th July 2006, is the expiry date of that policy 5th July 2007 or 4th July 2007?
The policy will expire 4th July 2007.
On our business policy it has something like 00:00 05/07/2005 through to
23:59 on 04/07/2006 as an example.
This is why I am confused. I understand your definition is common practise but in my opinion running from 05/07/2005 to 05/07/2006 makes more sense. This is because at the instant in time when it becomes 05/07/2006 (i.e.
05/07/2006 00:00:000000000000000...), the previous policy expires and the new one begins (assuming the policy is renewed).If using your method, the policy expires at 23:59 on the previous day, then technically that means there is a small period (e.g. 1 minute) without cover (again assuming a renewal). I realise in practise that this will make no difference, but it's not a very exact method, is it? Even if you say it expires at 23:59:9999999999999999999999999999999999999999, there is still a tiny period of time without cover.
On top of this, it also makes mid-term adjustment calculations more complicated. For example a policy that runs from 05/07/2005 to 05/07/2006 mathematically has a difference of 365 days between the inception and expiry date. However a policy that runs until 04/07/2006 has 364 days. In order to do mid-term adjustment calculations, a day has to be added onto the days-remaining count.
There is no minute without cover. Cover is provided for whole-minute slots, of which there are 60x24x365 per year, and which are identified by their start time. Hence a policy deemed to end at 23:59 is deemed to end at the *end of* minute 59 of hour 23.
No. A policy which runs from 0000 on 5/7 to 2359 on 4/7 has 365 days in exactly the same way as one which runs from 1200 on 5/7 to 1159 on 5/7.
The only place it makes a difference is that policies which run noon to noon would, for the purpose of calculating prepayments or accruals of premiums, be split to X and a half days to one year and Y and a half days to the other (where X+Y64 if the period does not contain a leap day).
OK, that explains it. Thanks.
Only if it runs in whole-minute slots, as you described above.
In message , Dave writes
No, it is the end of 59th minute, the smallest fraction nefore the start of the next day.
No, it will be at the end of the period, not the start.
In message , Dave writes
Why are you calculating the 'difference' - that is illogical. The 'difference' is not the same as the 'period' because the 'difference' doesnt count the first day. In effect you are saying that 1 Jan 2006 ois the 365th day after 1 Jan 2005, when in fact it is the 366th day.
Thats right!
In message , Dave writes
No, the slots can be any length. i.e. a year or a micro second, it wil;l always end at the very last moment of the period chosen.
On the contrary, it is quite logical. The difference between two instants is a period. The only difficulty lies in deducing the exact instants from the wishy-washy way these things are usually specified.
Ah, but a day is itself a period, so it is illogical to take the difference between two of them. You need to specify the instants of the days in question.
which is true
Rubbish! By that reckoning the first day after 1 Jan would be 1 Jan, but that is obviously not the case because 1 Jan isn't *after* 1 Jan. The first day after 1 Jan is 2 Jan *and therefore* the 365th day after
1 Jan is 1 Jan of the following year.
Well, if you give each day a sequential number, then the period comprising any number of *whole* days which begins on day A and ends on day B will always be B-A+1 if it is to be assumed that the period begins at the beginning of the start day and ends at the end of the end day. Only if the period begins and ends at the same time of day on both days (e.g. noon) can you measure the length of the period as B-A.
In message , Ronald Raygun writes
Rats! I should have said 'after the start of 1 Jan 2005'
The policy period is one year.
Using your example: effective 12:01 am July 5, 2006 and expires 12:01am July 5, 2007.
Bill Houdek bhoudek!@swbell.net
Some go as specific as time pending on policy (ie 12:01 date 1 to 12:01 Date
2)
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