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Shopping for auto insurance may not be the most exciting part of being a car owner, but helping you navigate the important process and understand your options is where Bankrate makes the experience easier. With your auto insurance needs changing throughout the years, it is important to know what opportunities you have to evaluate and adjust your coverage. What drivers may not realize is that some car insurance policies operate on a six-month basis, rather than an annual basis. While there are advantages and disadvantages to each policy type, six-month car insurance policies are a common option, so it could help to know how they differ.

What is 6-month car insurance?

When you get a quote for car insurance, you may have the option to choose between a six-month or a 12-month policy. While not all companies offer this option, it may be helpful to know that different policy terms exist. A six-month insurance policy simply means that your policy is effective (and priced) for a period of six months before it will be up for renewal. Every time an insurance policy renews, the insurance company is able to re-evaluate the driver’s circumstances and level of risk, and then determine if any changes to the premium are necessary.

As part of this process, insurance companies may evaluate claim statistics in your area to determine if your current rate is enough to account for potential claims payouts. If recent statistics show that claims occur at a higher frequency and payout, your insurance company may apply a company-wide rate increase. Conversely, lower claims may result in lower rates at the time of renewal or even rebates to existing policyholders. However, these rate changes can only be applied to a policy at the time of renewal, so a shorter policy term may allow rate changes to occur more frequently.

How does a 6-month car insurance policy work?

When you receive a quote for a six-month car insurance policy, you are selecting a set of insurance coverage types that will protect your finances for the policy’s duration. The insurance company’s underwriting team will determine your premium based on a variety of factors, including your age (in all states but Hawaii), gender (in most states), driving record, insurance history, location and vehicle type, as well as the level of coverage you select. Depending on what car insurance discounts you qualify for, your six-month insurance costs may be reduced.

When your policy term is coming to an end, your insurance company will evaluate your premium and send a new renewal offer which states that it will renew your policy for another six months at a specified rate. However, this rate could be lower or higher than what your original policy cost.

Pros and cons of a 6-month auto insurance policy

Although six-month auto insurance policies are common, there are a few considerations that may motivate a driver to consider opting for a 12-month policy. While you may be used to carrying a semi-annual policy, it may be worth receiving a quote for an annual policy just to compare your costs. Here are a few pros and cons to a six-month auto policy:

Pros of a 6-month auto policy

  • Policy flexibility: When you have a six-month auto policy, it tends to be more flexible due to the frequency of renewals. If your company has taken a rate decrease or you recently had a ticket fall off your driving record, you may see your savings much sooner.
  • Frequently revisit insurance needs: If you expect your insurance needs to evolve rapidly over a period of a few years, you may appreciate the opportunity and reminder to modify your policy at every six-month renewal. For example, if you have a history of claims or tickets on your driving record and are considered a high-risk driver, a six-month policy may be better suited for you. As each ticket reaches the three- to five-year mark, it may no longer surcharge on your policy. With a policy that renews more often, you might be able to see your premium drop faster.
  • Switch carriers sooner: Although you can switch auto insurance companies for any reason at any time, some carriers may apply a cancellation fee if you cancel your policy mid-term. If you are unhappy with your insurance carrier, a six-month policy means you may not have to wait as long for your renewal period to come up so you can change providers.

Cons of a 6-month auto policy

  • Premium increases: When you purchase a 12-month auto insurance policy, your premium is locked in for an entire year (unless you make changes like adding or removing a vehicle or driver), but with a semi-annual policy that renews every six months, you could be facing rate increases sooner or more often.
  • Potential to forget renewal dates: When you purchase a 12-month policy, you have the option to pay for the entire expense of your policy for a full year upfront. When you have a six-month policy, you might be more likely to forget your renewal dates, since they occur twice a year, and could potentially miss a payment, causing a lapse in insurance coverage.
  • Possible missed discounts: If you no longer qualify for a discount after your policy renews, a six-month policy could mean you lose that savings sooner. Discounts for new policyholders, for example, could net more savings over a 12-month period instead.

How do I know if a 6-month policy is right for me?

The best type of auto policy should be determined based on your unique situation. Just because your friend is getting a great rate on their annual policy does not mean you will get the same rate if you switch from a six-month policy. However, you may prefer the advantages to a longer policy term if your insurance needs are fairly set.

The cost of car insurance is based on a variety of factors that can greatly influence your decision to choose a longer or shorter policy duration. A six-month policy may be a great option if you prefer to revise your policy on a more frequent basis, or if you are switching to a new carrier and are unsure if you will be happy with your choice. Additionally, if you know you have a ticket or other traffic violation falling off your driving record soon, you may not want to lock in your higher premium for a whole year with an annual policy. Some providers may not offer both a six-month and 12-month policy, so that is another factor you will likely need to consider.

Frequently asked questions

Do 6-month auto policies offer the same discounts as 12-month auto policies?

Every company will offer unique discounts so your savings could vary greatly between two policy types. Generally, companies will offer common discounts like multi-car discounts, multi-policy discounts and good driving discounts regardless of the length of your policy. Since discounts are typically percentage based, your savings will mostly depend on what percentage each company assigns each discount.

Should I pay my 6-month policy in-full or in monthly installments?

It depends on your financial situation and how you like to handle your bills. Generally, most insurance companies will offer several payment methods to give customers the ability to make payments based on their individual financial situation. For example, if you have a tight budget and do not have a lot of extra cash to pay a policy in full, you may prefer a monthly payment plan. Some companies offer discounts when you pay in full, which could make it even easier to find cheap six-month car insurance.

Is the coverage offered on a 6-month car insurance policy better than coverage offered on a 12-month policy?

When you purchase an insurance policy, the coverage you purchase offers the same protection no matter how long your policy period lasts. In other words, if you need coverage on your truck and plan on purchasing full coverage, both a six-month policy and an annual policy would offer the same coverage types and limits based on the provider you choose. The main difference between purchasing a six-month car policy and an annual insurance policy comes down to personal preference on how much flexibility you want with the renewal frequency.

Where can I buy a 6-month car insurance policy?

Some insurance companies offer both annual and six-month policies, and some companies only offer one or the other. Additionally, you may not have a choice as to which policy type to buy; some companies reserve annual policies for standard and preferred customers, while nonstandard car insurance is sold on a six-month policy. If you are specifically looking for a six-month policy term, you may need to reach out to a few companies to confirm that this type of coverage is offered. Six-month policies are fairly common, though, so you shouldn’t have a problem finding one.

Written by
Jessie See
Insurance Contributor
Jessie See has a year of experience writing for Bankrate, 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
Insurance Editor