Policy Breakdown: 6 vs.12-Month Car Insurance

 January 30, 2023

By  Kyrie Mattos

Did you know that you have multiple options when selecting a car insurance policy duration? Since most auto insurers only offer six-month car insurance plans, it might seem like those are the only ones that exist, but there are some major benefits to exploring your 12-month policy options.

Let’s take a look at the pros and cons of each policy length and renewal, as well as which popular insurers offer 12-month car insurance quotes and policies.

Which option is best for me, a 6 or a 12-month policy?

There are a lot of small differences between the types of car insurance policies and their durations. But when you evaluate your unique driving situation, you should be able to see if there is a policy duration that works best for you. 

Here’s a quick simplification of which policy might be better for you.

A 12-month policy may be better if you:

  • Are confident in your driving skills and rarely have accidents.
  • Have a good driving record with no or very few points on it.
  • Are looking to save money in the long run.
  • Don’t mind dealing with paperwork and renewing your policy every year.

On the other hand, a six-month policy may be better if:

  • You are new to driving or have less experience behind the wheel.
  • You aren’t confident in your ability to go 12 months without an accident.
  • Your car is prone to theft or vandalism.
  • You frequently drive out of state or country.
  • You are looking for a short-term policy to cover a specific event.

Do your research and compare quotes to find the policy best suited to you.

What goes into your insurance premium?

One of the primary factors to weigh in each plan’s premium. These are typically based on the things you can’t change. Policy discounts and factors that impact auto insurance rates are the keys to inexpensive automobile insurance. Your auto insurance premiums may be higher than you anticipate if you don’t have any policy discounts.

How much does auto insurance cost each month? What factors influence the cost of car insurance? 

Auto insurance costs vary depending on a variety of criteria, including:

  • Age
  • Auto insurance company
  • Coverage level
  • Credit history
  • Driving record
  • Estimated commute mileage
  • Gender (depending on the state)
  • Marital status
  • Vehicle insurance quote
  • ZIP code

Those are the factors you will be unable to change. You also need to consider future rate adjustments.

Why Rate Adjustments Could Help or Hurt You

There are many reasons why insurance companies might adjust your premium. The most obvious reason would be a car accident or traffic violation. What might be less obvious are the favorable adjustments.

If you were a young driver or previously had a poor credit score when you originally obtained your car insurance policy, as you age or improve your score, you’re eligible for a lower premium.

In addition, tickets, moving violations, and telematics periods have expiration dates. When these things expire or are rerun, a shorter-term policy will allow for a quicker premium readjustment. However, if you are bound to a 12-month policy, you must wait until your annual renewal before the change occurs.

On the other hand, one reason 12-month plans are less common is insurers prefer the freedom to raise their rates more frequently following a claims-to-revenue review. These typically occur annually, but they help the insurance company offset any losses or deficits.

Which car insurance companies offer 12-month policies?

There are several car insurance companies offering 12-month policies. Some of the more popular ones include Liberty Mutual, USAA, Erie, The Hartford, and MetLife.

Still, each company will only allow qualified applicants to access these plans. Though some may argue this is unfair, these businesses maintain that these measures are necessary to protect their interests. 

For example, USAA only accepts military members and their families, while other plans and providers might require a spotless driving record.

The Pros and Cons of 6-Month vs. 12-Month Car Insurance Policies

Now that we’ve looked at which insurers offer 12-month policies and what some of the benefits are let’s take a look at the pros and cons of each type of policy.

Six-Month Policy Pros and Cons

Some pros of a sixth-month policy include less paperwork and hassle to renew every year. It may also be cheaper than a 12-month policy.

Some cons of a sixth-month policy include waiting longer for your claim to be processed should you have an accident. Six-month policies may not be as comprehensive in coverage as 12-month policies, and they may also be difficult to find from your preferred insurer.

12-Month Policy Pros and Cons

Some pros of a 12-month policy include comprehensive coverage, including protection from natural disasters, theft, and vandalism. You can usually cancel these policies at any time without a penalty, and there’s no mid-year rate adjustment, 

Some cons of a 12-month policy include difficulty in qualifying for this plan depending on your driving record, being more expensive than a six-month policy, remembering to renew it every year, and only annual rate adjustments mean no rate corrections when a violation penalty period expires. Drivers must wait until the new plan year for a correction.

Compare Quotes From Multiple Insurers

Whether you decide on a six or 12-month car insurance policy, it is important to shop around and compare quotes from multiple insurers. Rates can vary drastically between providers, so it is crucial to find the best deal for your needs.

You might have a gut instinct to go with one plan duration over the other, then find out that one lender offers a huge incentive or lower premiums if you choose a specific plan. Of course, you won’t know until you actually start getting quotes.

You might also find that insurance comparison platforms are a huge win for you and all consumers. Using one will give you the ability to compare multiple plans and multiple providers, all from one convenient place, saving you time and money.

By taking the time to research your options, you can rest assured that you are getting the most bang for your buck when it comes to protecting your vehicle.


Luke Williams writes and researches for the car insurance comparison site, CheapCarInsuranceQuotes.com. His passions include best practices for insurance and educating others on its intricacies and nuances. 

Kyrie Mattos


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