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Most insurance providers issue car insurance policies for six-month policy terms. But if you want, you can find coverage that locks in your auto insurance rates for an entire year. It could save you money—but only under certain circumstances. Read on to get a sense of whether 12-month car insurance makes sense for you.

Quick Facts
  • A 12-month car insurance policy can be hard to find.

  • An annual policy won’t always improve your auto insurance rates versus a six-month policy.

  • For some, the peace of mind of a year’s worth of coverage is worth it.

What is a 12-month car insurance policy?

Should I get a 12-month car insurance policy?

12-month policies aren’t the best option for everyone. You’re locked into your coverage for an entire year and companies won’t necessarily give you a better rate than a 6-month policy.

Plenty of auto insurance companies sell 12-month or annual car insurance, though it’s not standard. A 12-month policy is the same as a normal car insurance policy in terms of deductibles, coverage options, and meeting state car insurance requirements.

There’s just one big difference. Instead of reassessing your driving record, credit score, driver discounts, and other factors to revise your insurance rates after a period of six months, your rates are essentially frozen for a full year.

Just like with a six-month policy, you can pay monthly or all up front. While you may think that a longer policy period would earn you lower rates, that’s not always the case. Car insurance companies like having the chance to adjust your car insurance rates on a six-month basis and sometimes set higher insurance premiums on annual policies or don’t offer them at all.

Best Car Insurance Companies

Best Car Insurance Companies

12-Month vs. 6-Month Car Insurance

A six-month policy is the standard for car insurance policy periods. But depending on certain factors, like your credit score, driving record, age, and financial situation, an annual policy could work to your advantage.

When a 12-month policy could lower your rates

You already have a clean driving record. A 12-month car insurance policy is most effective when you already have cheap car insurance and want to lock in your premium to insulate it from potential rate increases. This is the case for safe drivers with a spotless driving history that can’t be improved upon.

You have the resources to pay your premium up front. Some policies with 12-month terms will actually require you to pay the full premium at the time of signing, but if that’s not the case, you can often save a bit of money by paying your auto insurance bill for the entire year in one go. This depends on the insurance provider.

Your finances and personal life aren’t changing. If you’re paying down credit card debt or other loans, moving to a cheaper place, or becoming a homeowner, you shouldn’t opt for a 12-month policy. This is because those changes will improve your credit score, unlock discounts, and likely lower your insurance costs. But with a 12-month policy, your rates won’t be able to lower until the policy renews in a year.

When a 12-month policy might not save you money

If, in the coming year, it’s possible that changes in your life could help you bring your auto insurance rates down, you will want a six-month policy so that you can update your premiums and save money sooner rather than later. A six-month policy will be a better option for you if:

Your driving history has violations that will be wiped from your record during the year. When car insurance companies renew your policy, they apply rate revisions as your driver profile evolves. So if you have speeding tickets or at-fault accidents that might be removed from your record within six months, you shouldn’t miss out on lower rates.

You’ll soon become eligible for driver discounts. Becoming a homeowner and/or purchasing home insurance can unlock a discount with most insurance agencies, so if this is possible for you in the coming year, you’ll want a six-month car insurance policy. This applies to other driver discounts like defensive driving courses, too.

You can’t find cheap auto insurance quotes for an annual policy. Because insurance agencies don’t love writing 12-month car insurance policies, they’re not always the cheapest. Get free quotes from as many insurance providers as you can before signing your policy.

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Other Reasons to Get 12-Month Car Insurance

Not everyone signs an annual car insurance policy for the savings alone, especially because lower car insurance rates aren’t always part of the package. Perhaps it’s worth it to you to pay your car insurance bill once and not think about it for an entire year. After all, the hassle of renewing and dealing with monthly or six-month policy terms can be time-consuming.

Additionally, car insurance companies will raise auto insurance rates on all their policyholders if the company has to recuperate costs from a difficult financial year. So if you’re up on the financial news and anticipate that this might be the case, consider shopping around for annual car insurance coverage to delay the rate increase.

And on that note, some policyholders desire a 12-month policy term for the sheer predictability. If you manage a complex budget and just want to know for sure what your insurance costs will be for the year, locking in one insurance premium can help with financial planning.

Cheap Car Insurance

Cheap Car Insurance

Car Insurance Companies That Offer 12-Month Policies

So where can you buy 12-month car insurance? One notable insurance provider that doesn’t sell annual policies is GEICO. But you can get 12-month auto insurance coverage from the following companies and many others.

Insurance CompanyAverage 12-Month Policy Premium
American Family$780
The Hartford$1,140
Liberty Mutual$2,724
The General$2,856

Keep in mind that online auto insurance quotes are usually for six months, and to purchase a 12-month car insurance policy, you might have to work directly with an insurance agent.

USAA is only available to military members and their families, while The Hartford is exclusive to AARP members 55 and older. Other insurance companies listed here, such as Erie, are not available in every state, while others only offer annual policies in certain states.

Best and Worst Sites to Compare Car Insurance

Best and Worst Sites to Compare Car Insurance

Is a 12-month car insurance policy right for me?

The answer is rarely obvious. Once you’ve gone out and found all the car insurance quotes you can, you’ll have a better idea of whether a 12-month car insurance policy makes financial sense for you. But if the peace of mind alone is enticing enough and you can take on the up-front cost, you might as well make the effort, as long as you already have cheap car insurance.

Frequently Asked Questions

  • Which car insurance companies offer annual policies?

    While GEICO only offers six-month policy terms, many prominent insurance providers have 12-month car insurance policies available in most states. Among them are Allstate, USAA, The Hartford, American Family, Erie, MetLife, Safeco, and Liberty Mutual.

  • Will a 12-month car insurance policy save me money?

    If your driving history is spotless and you already have great credit, an annual policy can protect you from rate increases. But if you’re going to become a homeowner, see a past violation leave your record, or otherwise profit from driver discounts in the near future, you’ll want a six-month policy term. And keep in mind that some companies charge more for full-year policies.

  • Should I get a 12-month policy if I have a bad driving record?

    Violations like speeding tickets and at-fault accidents leave your driving record after three to five years, but before that, they increase your rates. So make sure you’re in a position to take advantage of rate revisions as soon as these violations are likely to disappear from your record by avoiding annual car insurance.

  • Can I cancel my 12-month car insurance policy?

    Even though it’s a longer commitment and you probably already paid for it, you can always cancel your 12-month car insurance and be reimbursed for the remaining part of the policy term. So don’t panic if you sign a policy and then decide you want out.

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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.

Charlie Mitchell
Charlie MitchellInsurance Writer

Charlie Mitchell is a journalist, researcher, and writer specializing in personal finance subjects. He holds a degree from Middlebury College. His work can be found in Vox, Mother Jones, The New Republic, and other publications. Charlie uses his expertise in home, renters, and auto insurance subjects to help inform people to make better financial decisions. Connect with Charlie on LinkedIn.