QuotesChimp now know what an insurance contract is and what parts it is made of. But when does the insurance contract actually begin? In other words, when is the company on the hook if a loss occurs�until you've paid a premium, or as soon as you sign on the dotted line? The answer to this question can be very important if a loss covered by the policy occurs after you have requested to be covered but before the policy has been formally issued. Let's call this time period the gray area.