6 month vs 12 month car insurance

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When you purchase a car insurance policy, it remains valid for a certain amount of time. The most common policy periods are six months and 12 months. Depending on the auto insurance company, you might get to choose your policy period, but not all providers give you an option. If you do have a choice between a six-month or a 12-month policy, you may want to weigh the pros and cons of each to help decide which is right for you.

6-month vs. 12-month car insurance policies

The main difference between six-month vs. 12-month car insurance policies is the duration of the policy period. At the end of the policy period, your insurance company will review your recent claims history, driving record and other rating factors to make adjustments to your premium as necessary. Six-month policies are evaluated twice a year, while 12-month policies are only evaluated once a year.

Another difference between these two policy lengths is the price. In most cases, a six-month policy is going to be cheaper than a 12-month policy because you are paying for coverage over a shorter period of time. However, if you compare your car insurance price on a monthly basis, it may not be much different between a six-month policy and a 12-month policy.

Benefits of 6-month car insurance

Six-month car insurance policies are common, and many of the largest car insurance providers sell six-month policies. Six-month car insurance could allow you greater flexibility when cancelling your policy. Some companies charge cancellation fees if you cancel in the middle of your policy term. If this is the case with your company, a six-month policy would give you an additional renewal period each year to decide to cancel your car insurance if you want to switch providers.

Another potential benefit is that the insurance company will review your rate twice per year, rather than just once per year. If you have recently improved your credit score, taken a defensive driving course or had a violation removed from your record, you could reap the rewards of a lower rate more quickly than you would with a 12-month policy.

However, the more frequent rate revision can also be a drawback. A six-month policy gives the insurance company two chances each year to increase your premium. Depending on your driving record and other rating factors, you could see a premium increase twice per year instead of just once.

Benefits of 12-month car insurance

The biggest advantage of a 12-month car insurance policy is that your rate will only change once per year, unless you make changes. This could be ideal for people who have recently filed a claim or gotten a ticket, as it may take longer for a car insurance company to apply a surcharge. Increases due to driving incidents are typically applied at the renewal period, so having only one renewal each year can be beneficial.

However, this does not mean that your premium stays the same for your entire 12-month policy period. If you make changes to the policy like adding a driver, changing a vehicle or updating your coverage, your premium will change midterm.

How do I know which policy is right for me?

Many companies do not offer a choice between six- and 12-month policies, so you will have no need to choose. Some companies default to six-month terms while some default to 12-month terms. But if you do have a choice, the decision to purchase a six-month vs. 12-month policy will be unique to you. You may want to weigh the advantages and drawbacks of each one before you make a decision.

Choosing a six-month policy may be a good option for drivers who have a mostly clean record, with no recent claims or major violations, and do not mind the twice yearly rate review. Six-month policies may also be a good choice if you want to have the freedom to cancel your policy more frequently and avoid cancellation fees, if your company charges them.

In general, insurance agents tend to recommend 12-month policies, if you have a choice, to avoid the risk of twice annual premium increases. However, you may want to keep in mind that not everyone qualifies for a 12-month policy. Even among companies that offer both terms, some carriers use 12-month terms as a default but offer six-month terms to drivers with poor driving records or poor credit.

Frequently asked questions

What is the 6-month premium for car insurance?

The average cost of car insurance in the United States is $1,674 per year for a full coverage policy. Six-month policy premiums might be lower, simply because drivers are paying for a shorter term of coverage. However, every driver pays a different rate based on their unique situations. You could pay more or less than the national average premium based on the state you live in, your driving record and the type of car you drive.

Which car insurance company is the best?

The best car insurance company is different for every driver. The provider that is best for you depends on where you live, what type of coverage you want, which discounts you qualify for and your budget. Understanding what you are looking for in a company and getting several quotes could help you find an option that works for you.

Can you get month-to-month car insurance?

No, the shortest term available for car insurance is generally six months. Some providers may offer shorter terms, but it is not a common practice. However, you can typically purchase a six- or 12-month policy and cancel it midterm if you no longer need the coverage or if you have replaced your car insurance with another provider. You may be charged a cancellation fee though, so check with your carrier for the specifics.

Written by
Elizabeth Rivelli
Insurance Contributor
Elizabeth has two years of experience writing for insurance domains such as Bankrate.com, The Simple Dollar, Coverage.com and NextAdvisor, among others. In addition to auto insurance, Elizabeth regularly writes about home insurance, renters insurance and life insurance. She also covers industry trends and general insurance education.
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