6-Month vs. 12-Month Car Insurance Policies (2024)

Insurance companies typically offer six-month or 12-month policies, and some offer both. Insurers offer six-month policies more frequently because the shorter duration allows them to change prices more often and stay competitive in the market.

But is a six-month policy right for you? Some drivers prefer the flexibility of a six-month policy because it allows them to compare car insurance rates more often and take advantage of an improved driving record. Others enjoy the stability of a 12-month policy because it provides predictable payment amounts for an entire year. Both options have their benefits and drawbacks to consider when you’re shopping for car insurance.

The basics of six-month and 12-month car insurance policies

Insurance companies may offer six-month or 12-month policies, but seldom offer both. A six-month car insurance policy fixes your rates at a set cost. Then, at the end of the policy period, you can choose to renew at a new rate, update your coverage, or discontinue your policy and move to another insurer.

The end of this six-month period also allows your insurance company to reevaluate your risk level based on your claim history, driving record, and other factors. Your insurer can then adjust your car insurance premium accordingly.

A 12-month car insurance policy works the same as a six-month policy, only for a longer duration. Monthly rates are locked in for a year, and you can choose to renew your policy at an updated rate, change your coverage, or switch insurance companies at the end of those 12 months.

On the differences between the two policy lengths, Ben Guttman, a broker at North Central Insurance Agency in Parkland, Maryland, says, “Usually it is carrier-specific more than a hard rule. However, often carriers that take higher-risk drivers do six-month policies so they can reevaluate the rate faster.”

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Features of six-month and 12-month car insurance policies

Six- and 12-month car insurance policies share several common features.

Coverage amount

The amount of insurance coverage you need depends on your unique needs, what’s required in your state, and whether you want additional coverage.

Most states require you to carry at least bodily injury and property damage liability coverage. Other common coverage types offered include:

• Collision

• Comprehensive

• Personal injury protection (PIP)

• Uninsured/underinsured motorist

Premium

Whether you choose a six-month or 12-month policy, you’ll have to pay a premium. An insurance premium is the cost you pay for insurance coverage for your vehicle. You can often choose to pay the premium amount in full or through monthly installments. Some insurance companies offer you a discount for paying in full. If you do choose to pay in full, the amount will be due when your policy starts.

Deductible

If you have full coverage car insurance, your policy also comes with a deductible. This is an out-of-pocket cost that you pay before your insurance policy covers any damages or losses. Your deductible affects your monthly premium cost.^[1] Choosing a higher deductible can reduce your monthly premium, while choosing a lower one can cause your monthly costs to increase. Liability coverage is never subject to a deductible.

Discounts

Raising your deductible isn’t the only way to lower your car insurance payment. Insurance companies often provide several other ways for you to save money on your car insurance through discounts. The available discounts vary depending on the insurance company.

Some common auto insurance discounts you may qualify for include:

• Automatic payment discount

• Away-at-school discount

• Bundling discount

• Early bird discount

• Good student discount

• Homeowner discount

• Loyalty discount

• Online quote discount

• Paperless statement discount

• Paid-in-full discount

• Smart driver discount

• Usage-based discount

• Defensive driving course discount

Pros and cons of six-month car insurance policies

Six-month car insurance policies have some advantages over longer policies but also carry potential drawbacks.

Pros and cons of 12-month auto insurance policies

A 12-month insurance policy also offers benefits and disadvantages, depending on your situation. Consider these factors in your decision when choosing a car insurance policy.

How much do six-month and 12-month car insurance policies cost?

Depending on your insurance company, coverage type, and other factors, your costs may vary between six-month and 12-month policies.

For liability-only coverage, there’s little difference between six-month and 12-month car insurance policies. On average, consumers pay $104 monthly for liability-only coverage and $204 per month for full coverage, according to Insurify data. Some insurers, however, may offer slightly lower rates for 12-month policies.

Here's a look at average monthly quotes from top insurers.

Other factors that affect car insurance costs

The term of your policy is just one of several factors that can affect how much you’ll pay for car insurance. Other factors include your:

• Age: Insurance companies typically charge higher rates to younger, less experienced drivers.

• Coverage type: You must carry at least the minimum liability coverage in your state. Your insurance costs will go up if you choose to add any additional coverage, like comprehensive or collision coverage.

• Driving record: Accidents and moving violations can cause your insurance premiums to increase.

• Gender: With all other rating factors being equal, women generally pay less for car insurance than men due to a lower risk of accidents.

• Location: Living in certain areas, like those with high vehicle theft and accident rates, can lead to increased costs.

• Vehicle: Insurance companies consider the value of your vehicle, potential repair costs, and theft risk when determining rates.

Which policy is right for you?

Finding the right car insurance policy for you may take some work. Research which options are available and whether an insurance company offers six-month or 12-month policies or both. Assess your finances, driving record, state requirements, and your situation to determine the best insurance policy for your needs.

Who should buy six-month car insurance?

A six-month car insurance policy is best suited for drivers who:

• Only need temporary coverage

• Have a limited budget

• Prefer to shop around more often

• Have traffic violations falling off their driving record within the next six months

Who should buy 12-month car insurance?

A 12-month car insurance policy is best suited for drivers who:

• Want to lock in insurance rates for a year

• Plan to keep their vehicle long term

• Enjoy predictable payments

• Want to avoid the hassle of renewing twice a year

Six-month vs. 12-month car insurance FAQs