For most drivers, car insurance is a bill that is paid relatively regularly. You might be in a position where you pay your premium every six months or make a monthly installment toward your insurance coverage. In either instance, policyholders are used to their rates slightly changing from time to time, yet they can count on the promise of coverage for 6-month periods, providing they continue to make payments on time.

But what if there was another way to purchase car insurance? Many aren’t aware that some auto insurance companies actually offer 12-month car insurance, allowing you to pay for an entire year of coverage at once. It sounds like a great idea on the surface, so you might be wondering why everyone doesn’t opt for this method.

We’re going to take a close look at how this annual premium structure works, how it differs from shorter-term policies, and how to determine which is the best choice for you. Once you’ve determined whether you’d like to enroll in a 6-month or 12-month policy, make sure to visit Insurify to find out just how cheap car insurance can be. After answering a few simple questions, you’ll be able to compare multiple online quotes with ease and secure a car insurance policy that meets your needs.

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How does 12-month car insurance work?

On the surface, it might seem like opting for 12-month insurance is no different than a 6-month policy, aside from the fact that you pay for a more extended period of coverage. In reality, there are several factors to consider if you think a 12-month policy would meet your driving and financial needs. Here are the basics to keep in mind:

  • Your driving history plays a large role in determining your car insurance rates. So if you have a few tickets or an at-fault accident on your record, you might want to wait before securing a longer-term policy. If your driving record is going to improve in the next few months, consider a 6-month policy instead.
  • Car insurance companies can change policy rates at renewal time, so if you’re interested in keeping your expenses the same for a year, a 12-month policy is the better way to go. Those who enjoy planning their finances well into the future can count on a 12-month policy to be a fixed expense.
  • Since you’re paying for your entire policy term at once with a 12-month option, insurance providers are often more willing to offer a paid-in-full discount. If you can’t afford 12 months of coverage at once, you’re better off with a 6-month policy.
  • Car insurance quotes are often partially based on your credit score as well, so if you’re going to be paying off your new car within the next few months, a 12-month policy won’t reflect a lower rate until you’re up for renewal.

A longer-term policy is great when you want to lock in your auto insurance rates. But it’s important to remember that you might be at a disadvantage if you purchase a new car, anticipate any changes to your driving habits,  or will be moving. Your ability to change certain aspects of your policy midway through the year will vary depending on what insurance company you work with.

Ultimately, it can be challenging to find an insurance carrier willing to provide policies for a full year. The inability to reevaluate a driver’s rates every six months can put insurance agents in a greater position of risk. Companies that offer 12-month auto insurance coverage tend to be financially stable and trustworthy, so you can be assured that any claims you file will likely be handled efficiently.

6-month vs. 12-month car insurance

When shopping for insurance coverage, the difference between enrolling with one insurance company over another usually comes down to cost. While drivers typically seek out comprehensive coverage, the price of one car insurance premium versus its competitors is important. How exactly does a 6-month policy compare to an annual one? It’s not as straightforward as you might think.

A 12-month car insurance policy is priced according to your current driving history, but your rates likely won’t be revised until the end of your policy term. If you were to get a speeding ticket or become involved in an accident at the beginning of your policy period, you can expect to see rate hikes later rather than sooner. As a result, it’ll take more year-long periods of clean driving to bring your rates back down. 

You can’t merely multiply what you would pay for a 6-month policy by two and expect that to be the cost of your annual premium, either. In most cases, the companies offering shorter-term policies aren’t marketing to the same customer base as the carriers that provide annual coverage, so, logically, pricing structures would differ as well.

However, it’s essential to consider the role that discounts play in both a 6-month and a 12-month policy period. Larger insurance companies like GEICO or Progressive are well known for offering 6-month options with a plethora of possible discounts, including safe driver savings, good student discounts, and more. If you pay your entire premium in full, you can often receive a percentage off your total as well.

As insurance carriers are taking on a greater level of risk with a 12-month car insurance policy, it might be more difficult to come across the same level of savings. This will vary by state and depend on the company you work with, but by and large, a 12-month policy could break down to a monthly amount that’s not much cheaper than other options paid monthly over six installments.

Who offers 12-month car insurance? 

Perhaps you’re a prime candidate for a 12-month car insurance policy: you’re an excellent driver, you don’t plan on changing your vehicle or your driving habits, and you have enough money to pay for an entire year of coverage at once. Where can you find an annual policy?

As mentioned, many major insurance carriers only offer 6-month car insurance policies. However, based on where you live, you might find that annual options are available from the following insurance companies:

Remember, just because you’ve enrolled in a 12-month policy doesn’t mean that you’re stuck with this coverage if you’re unhappy. If you experience poor customer service or simply find that the carrier you’re working with isn’t meeting your needs, you can always cancel your car insurance policy. Drivers who find they want to switch their coverage in the middle of their policy period should always secure new insurance before canceling their current policy.

FAQ: 12-Month Car Insurance 

Should I choose 6-month or 12-month car insurance?

There are several factors to consider when enrolling in new car insurance coverage, including your driving record, your credit score, and what you’re able to afford. A 12-month car insurance policy requires full payment up front and locks in your rate for an entire year, while a 6-month option provides more flexibility.

Is a 6-month policy cheaper than a 12-month policy?

Your premiums will depend on where you live, the kind of car you drive, and a host of other aspects. Some drivers might find that a 12-month car insurance policy is more than double the price of a 6-month policy, while others could save by paying for their coverage annually.

Where can I compare 12-month and 6-month car insurance quotes online? 

Before you enroll in auto coverage, take some time to explore your policy options with Insurify. By answering a few simple questions, you can access free quotes from various insurance carriers and determine which policy type best meets your needs.

Conclusion: Where to get 12-month auto insurance policies

After considering all of your options, if a 12-month auto policy sounds like the right choice for you, don’t be afraid to do a little bit of research before you enroll. Make sure that you won’t be experiencing any major driving or financial changes within the next 12 months, and consider what you can afford when it comes to paying your premium in one lump sum.

Depending on where you live, finding a company that offers annual coverage might be slightly more complicated, but it won’t be impossible. It’s important to remember to partner with a reputable insurance carrier, especially since you’ll be handing over several thousand dollars to them at once. It’s recommended that drivers gather several car insurance quotes too, as premiums can vary from company to company.

If you don’t have much time to consider your options, head over to Insurify instead. Simply input your vehicle’s information and answer a few simple questions, and you’ll be able to compare 12-month auto policy quotes from multiple companies at once. After enrolling in your policy, you can rest assured that your rate won’t change over the next year, and you can hit the road with confidence!

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Updated October 19, 2020

Courtney Elder has loved to write since age six, yet she didn’t turn it into a career until many years after that. She graduated from Sonoma State University with a degree in Communications, and when she’s not creating content for Insurify, she’s exploring Portland, OR with her kids.