12-Month car insurance

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Auto insurance policy is an anticipated part of vehicle ownership. With commercials, radio ads and other marketing techniques flooding you with information about why one company is better than the other, purchasing car insurance may feel like an overwhelming and tedious task. However, finding the right policy can save you time and money in the long run. There are several advantages to purchasing a 12-month car insurance policy if the option is available.

What is 12-month car insurance?

While many auto insurers offer policies that renew every six months or semi-annually, some carriers also offer a 12-month auto insurance policy, or one that renews annually. No matter how long your auto policy lasts, the coverages you purchase on the policy provide the same protections for any of your insured vehicles and insured drivers on the road. The main difference between the two policies is how often the policy renews.

Every time a car insurance policy renews, you face a potential premium change based on company-wide rate adjustments and area-wide accident statistics. If you purchase a 12-month insurance policy, your premium is locked in for a full year, so your potential rate evaluations are less frequent. In other words, your insurance rate is not at risk of changing for at least 12 months—provided you do not make any vehicle, driver or other policy modifications. Because 6-month and 12-month policies both offer the same type of coverage, choosing between the two really comes down to personal preference.

How do I find a company that offers a 12-month policy?

Locking in a rate for 12 months may sound like a cost-effective way to manage your budget but finding an auto insurer that offers a 12-month policy may be difficult. From an insurance company’s standpoint, applying rate revisions more frequently is a better way to recoup claims payouts and other costs while increasing company profit, so not all carriers will offer an annual policy.

Additionally, just because a car insurance company offers 12-month auto insurance quotes does not mean you will be eligible. An insurance carrier’s underwriting team may determine that you can only purchase a semi-annual policy due to your driving record or prior insurance history. Plus, your desired company may not offer 12-month policies in every state.

If you are interested in purchasing a 12-month car policy, begin by asking for a quote from one of the many car insurance companies that do offer annual renewals. A few major carriers that offer 12-month car policies include Erie, Liberty Mutual, Hartford, and USAA.

You could also visit a local insurance broker who works with several companies at once and may have a 12-month policy to fit your needs.

Pros and cons of a 12-month auto insurance policy

Before deciding on whether or not to buy a 12-month auto insurance policy, it is important to determine the pros and cons of your purchase. Since your auto coverages would be the same no matter how long your policy runs, your premium will probably be the greatest deciding factor. Here are a few other pros and cons to consider:

Pros of a 12-month auto insurance policy Cons of a 12-month auto insurance policy
Locked insurance premium: Your rate will be locked in for an entire year, meaning you will have a lower frequency of potential rate increases. Inflexible policy: If your company takes a rate decrease, you will have to wait longer for the rate decrease to apply since there is a longer period between renewal cycles.
Convenient: If you do not have a lot of time to shop around for the best price, a 12-month auto policy is convenient because after paying your premium, you will not have to think about your policy for a full year. Infrequent evaluations: If you prefer to be on top of your financial decision, you may not like that your policy is not evaluated more frequently.
Potential savings: Your company may offer a large discount for paying your entire annual premium in full. Uncommon policy type: If you want to purchase a policy through one of the well-known major insurers, you may have a hard time finding a company that offers 12-month policies.

Frequently asked questions

Will I save money by purchasing a 12-month auto policy?

Your cost of car insurance is determined by various factors, including, but not limited to, your age, gender, location, driving record, insurance history, vehicle type, chosen coverage and eligible discounts. Because each insurance company has unique rate calculations, you may find that one carrier is cheaper than another for the exact same coverage. This variance may also apply to your policy length. You may find that, on average, you pay less with one company every six months, but another company may offer a better rate for a 12-month policy. However, some companies may offer a significant discount on annual premiums paid in full, so if you can pay upfront, you may save more in the long run. It is best to quote around to find an affordable policy that is right for you.

Will a 12-month auto insurance policy satisfy my state’s minimum insurance requirements?

Yes, a 12-month car policy will satisfy your state’s minimum insurance requirements the same way a 6-month policy would. If you are involved in an accident, the liability, uninsured motorists, collision, comprehensive and other coverage types you purchase will act the same no matter how long your auto policy period runs. The main difference between the two policy types is the frequency of rate evaluations and has nothing to do with the quality of coverage.

Can I change auto insurance companies even if my 12-month policy is still in effect?

Although your 12-month car insurance policy will be in effect an entire year, you do not need to wait for your renewal to switch carriers. Policyholders can switch auto carriers at any time for any reason but you may be subject to a cancellation fee, so it is important to know your provider’s cancellation policy before switching. If you do switch carriers in the middle of your policy term, you will want to make sure you start a new policy and cancel your old policy on the same date, so there are no coverage gaps in your insurance history.

Written by
Jessie See
Insurance Contributor
Jessie See has a year of experience writing for Bankrate.com, Reviews.com and other insurance domains. She has covered topics ranging from auto and homeowner’s insurance to life insurance. She has been writing professionally for over a decade with experience in a variety of different topics and industries. Prior to becoming an insurance writer, she worked as a legal assistant in the field of personal injury law and as a licensed sales producer at various insurance agencies.
Edited by
Senior Insurance Editor