When you buy car insurance, you have two term options: six months or twelve months. A six-month policy is excellent for those who like shorter commitments, while a 12-month auto policy is great for rate consistency for the full year.
Regardless of the policy term, you should compare car insurance quotes before your current term ends. This way, you can shop around and get the best car insurance coverage that suits you.
6-Month vs 12-Month Car Insurance Policies
The main difference between a six-month and 12-month car insurance policy is the length of coverage. A six-month policy is re-evaluated twice yearly so your rates can be adjusted more often, while a policy with a 12-month term is re-evaluated only once a year. During these reviews, your claims history, driving record, and other factors are assessed, which can affect your auto insurance premiums.
Policy term length can also affect upfront costs if you fully pay your premium. Major insurers often give a paid-in-full discount for full payment of the premium for a six-month policy or a 12-month policy. However, if you pay monthly, the difference between a six-month and 12-month policy is minimal.
What is a 6-month Car Insurance Policy?
When shopping for car insurance, you may have the option to choose between a six-month or 12-month policy; not all insurers offer both terms. A 6 month car insurance policy covers you for six months and is up for renewal. Understanding the benefits of each option can be helpful when deciding which term is best for you.
Pros of a 6-Month Auto Insurance Policy
- Policy Flexibility: Although you can cancel your car insurance anytime, some providers may charge a cancellation fee for ending a policy before the term ends. With a six-month auto insurance policy, you have a shorter wait until the renewal period, so there is more flexibility if you want to switch providers due to dissatisfaction or to find competitive rates.
- Frequent Driving Record Checks: A six-month car insurance policy may be a good option for high-risk drivers, as it allows for more frequent checks on your driving history. For example, suppose traffic violations or accidents fall off your record (usually after 3-5 years). In that case, your insurer may lower your rates at the next renewal.
- Full Payment Easier: Many insurers offer a discount for paying the entire premium upfront rather than monthly installments. This option is available for both six-month and 12-month policies. Paying for a six-month auto policy upfront may be more manageable for your budget, and you can get a paid-in-full discount.
Cons of a 6-Month Auto Insurance Policy
- More Premium Changes: With a 12-month policy, your premium is usually stable for the whole year unless you make changes to it. A six-month policy is recalculated twice a year, which could mean an increase in rates, especially during times of inflation.
- Risk of Forgetting Renewal Dates: A 12-month policy has one renewal a year, so you’re less likely to forget to renew or make a payment. A six-month policy has two renewals a year, so you’re more likely to miss a due date and risk a lapse in coverage.
- Discounts Lost: Discounts tied to a single policy term (e.g., new policyholder discount) may end sooner on a six-month policy than on a 12-month policy. You may miss out on an annual car insurance policy’s long-term savings.
A six-month car insurance policy offers flexibility and savings, but be mindful of the downsides, such as frequent rate increases and shorter initial discount periods.
Should You Get a 6-month or 12-month Car Insurance Policy?
Car insurance policies come in two durations: six-months which is more common and 12-months. The choice between these should be based on your driving history, financial situation, and personal preference.
Choosing between a six-month or 12-month auto insurance policy may seem like a small decision. Still, it can impact your coverage and insurance rates. Knowing which one suits you is important. A 6 month policy needs to be renewed or you need to search for a new policy after six-month. In contrast, an annual policy gives you auto coverage for a full year and locks in your rate for the policy period.
6-Month or 12-Month Car Insurance Policy – Which is Cheaper?
The term of your policy doesn’t affect your overall car insurance cost. However, it may affect how often your insurer reviews your policy for rate changes due to company-wide increases or decreases. Also, surcharges for accidents or traffic violations can only be removed at renewal dates, so the amount of activity on your driving record currently may be a factor to consider when choosing your term.
The average rate for Full-coverage auto insurance is $194 per month, and state minimum liability car insurance is $53 per month. Car insurance rates will vary based on your personal rating factors such as driving history, insurance history, vehicle, and other individual details.
How Can I Keep My Car Insurance Rates Low?
Your car insurance rates are personalized to your driving profile, and the length of your policy may cause some variations due to discounts or more frequent rate changes. Nearly 40% of drivers think they pay too much for car insurance. Knowing what affects your premium can help you save. Insurance carriers look at vehicle type, age, clean driving record, ZIP code, credit history, years of experience, gender, claims history, marital status, annual mileage, and coverage options.
You can save on your car insurance by controlling what you can. Improve your credit score, keep continuous coverage to avoid gaps, and drive safely.
If Your Premium Is the Same, Which Policy Should You Choose?
If the premiums are the same, it’s a personal choice. A 6 month car insurance policy term gives you more rate reviews, which is good if you think your driving record or circumstances will change. A 12-month policy offers you more stability and fewer renewals, which is good if you like consistency. Choose the 12-month policy if you want long-term stability or the six-month policy if you want flexibility and quicker changes.
How Do I Choose Which Policy Term is Right for Me?
Both six-month and 12-month car insurance policies have their pros and cons. Your choice will depend on your preferences, driving history, and the effort you want to put into managing your auto insurance coverage. Need help or more information for choosing the right policy? Insurance Navy can help you explore your options and get you covered. Contact us today!
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Frequently Asked Questions
Is Paying Monthly or every 6-Months Cheaper?
Whether monthly or paying every six-months is cheaper depends on your financial situation and payment preferences. Most auto insurance companies offer flexible payment plans but paying six-months in full often gets a discount. This may help you get the lowest possible rate on 6-month policies.
Can I Get Month-to-Month Auto Insurance?
Auto Insurance policies are usually six-months minimum. Some insurance providers may offer shorter policy terms, but this is rare. You can buy a six or 12-month policy and cancel midterm if needed, but cancellation fees may apply. If affordability is a concern, most major insurers allow monthly payments for six and 12-month policies, but this often incurs a small surcharge on top of the entire policy premium.
What is Short-Term Car Insurance?
Short-term auto insurance or temporary car insurance is 30 days and usually for uninsured drivers borrowing or renting a car. Major auto insurers do not offer these policies, providing basic liability coverage. Alternatives for temporary car insurance policies are non-owner insurance, coverage from rental car companies, and using credit cards, including rental car insurance. If borrowing a car, you may not need extra coverage if the vehicle owner’s policy has permissive use.
Do All Car Insurance Companies Offer 6 and 12-month Policies?
Six-month car insurance policies are the norm because insurers can adjust rates more often, usually twice a year. Some insurers also offer 12-month policies, depending on state regulations and company policies. These longer-term policies may be more stable but are less common than 6-month policies.
