At what time does insurance coverage under a fire insurance policy typically expire?

• A. 12:01 am Standard Time at the address of the property insured
• B. 12:01 pm Standard Time at the location of the property insured
• C. Twelve months after the broker binds coverage
• D. The time an underwriter reviews the details of the risk to be insured

Answer: (A)

Insurance coverage under a fire insurance policy typically expires at 12:01 am Standard Time at the address of the property insured. This timing is significant as it aligns with a standard practice in the insurance industry, where coverage is scheduled to take effect or expire at this precise moment to ensure clarity in the policy terms.

Setting the expiration at 12:01 am provides a clear, unambiguous start and end time for coverage, allowing both the insurer and the insured to have confidence regarding the protection being provided. It effectively defines the boundary of when the coverage is active, eliminating potential confusion that could arise from using other times of the day, such as noon.

In contrast, specifying coverage expiration at 12:01 pm could create situations where uncertainty arises about whether coverage is still in effect for part of that day. Similarly, referencing a time frame such as twelve months after binding coverage or the moment an underwriter reviews the risk does not conform to standard practice in defining when a policy expires. Therefore, option A correctly reflects the widely accepted industry standard for the expiration of fire insurance policies.