12-Month Car Insurance (2023)

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.

What is a 12-month car insurance 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.

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.

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.

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.

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.

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.