Q

Do I need 6 or 12-month car insurance?

A

A 12-month car insurance policy tends to offer more security, while a six month car insurance policy offers flexibility, allowing you to compare rates more frequently.

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By 

Rachael Brennan

Rachael Brennan

Senior Editor & Licensed Auto Insurance Expert

Rachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and AutoInsurance.com.

Published February 23, 2022 | 3 min read

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Choosing between a six-month car insurance policy and a 12-month car insurance policy can be confusing. Is it better to choose a shorter policy or a longer one — and do they cost the same?

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The length of policy that’s right for you depends on your needs. Drivers with a clean driving history and excellent credit would likely benefit from a 12-month policy that locks-in their rates for longer, while people who have points on their license would probably be better off with a six-month policy.

Key takeaways

  • Car insurance companies usually offer either a six-month policy or a 12-month policy, but some insurance companies offer both and let you choose.

  • While there may be a small difference in price between a six-month and a 12-month policy, it likely isn’t enough of a difference to determine which type of policy is right for you.

  • A six month policy allows you to compare rates more frequently because you’ll have to renew twice a year. 

  • But a 12-month policy lets you lock-in your rate and not worry about it for another year.

6-month vs. 12-month car insurance policies

Insurance companies usually offer either a six-month policy or a 12-month policy, but some insurance companies offer both options. For example, GEICO offers 12 month policies to customers who have at least three years of a clean driving history.

Six-month policies are more common than annual policies, but there are benefits to both policy lengths.

Benefits of 6 month policiesBenefits of 12 month policies
Allows customers to compare rates more frequentlyUnless you make changes to your policy, your rate will stay the same for a full year
Your rate is reviewed twice a year, so improvements in your driving record or credit history will be reflected in your rate more quicklyYour rate is only reviewed once a year, so a car accident or moving violation won't be added to your rate as quickly as it would with a six month policy
It is much cheaper to pay for a six month policy in a single lump sum, allowing you to avoid the additional fees that are sometimes associated with paying your premium monthlyAn annual insurance policy lets you lock in the best rate and not worry about it again for another year

Is annual car insurance cheaper than a six-month insurance policy?

While there may be a small difference in price between a six-month and a 12-month policy, it likely isn’t enough to determine which type of policy is right for you. The length of your policy has less to do with how much you pay for insurance than other factors, like your age, your gender, your ZIP code, and the type of car you drive. 

When it comes to the length of your policy, both options have benefits and drawbacks. For example, a driver who gets into a car accident in the middle of their policy term is better off with an annual policy because their rate won’t be adjusted to reflect the new blemish on their driving record until their policy renews, which could still be months away. 

However, when that accident eventually falls off their driving record a few years later, that same driver will continue to pay a higher rate until their policy renews, so they would be better off with a six-month policy at that point.

No matter which type of policy you choose, the best way to make sure you are paying the lowest possible rate is to compare quotes from multiple policies at every renewal.

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How much does car insurance cost per year?

How much you pay for car insurance can vary significantly from one company to the next, which means the same driver may get two wildly different quotes from two separate companies. The chart below shows the average annual cost of car insurance at 20 of the top insurance companies in the country:

CompanyAverage annual premium
Allstate$1,974
American Family$1,227
Amica$1,687
Auto-Owners Insurance$1,070
COUNTRY Financial$1,543
CSAA$2,318
Erie$1,139
Farmers$1,934
GEICO$1,187
MAPFRE$1,040
Mercury Insurance$2,554
MetLife$2,431
National General$1,819
Nationwide$1,463
NJ Manufacturers$1,481
Progressive$1,758
State Farm$1,383
The Hartford$1,939
Travelers$1,580
USAA$1,048

Are there fees for paying your policy every six months?

How you pay your car insurance payments can impact your overall insurance costs. For example, if you have a 12-month policy, you may be charged a small fee for making a payment every month or every six months instead of paying your balance in full at the start of your policy term. 

If you have a six-month insurance policy, there are no fees for paying your insurance every six months. In fact, paying your insurance premium in one single payment at the beginning of your policy can help you save money by avoiding the additional fees that often come with paying your insurance quarterly or monthly.

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Frequently asked questions

Can you get month-to-month car insurance?

No major insurance companies currently offer a month-to-month insurance option. Drivers who are buying, borrowing, or renting a car for a short period can purchase an insurance policy and then cancel it upon returning the car, getting a refund for any remaining balance.

Can I insure a car for only six months?

Insurance is sold in both six-month and 12-month increments, so you can absolutely insure your car for six months. However, if you still own the car at that point you may face consequences for canceling your insurance, including having your license or registration suspended.

Does my insurance policy impact my credit score?

No, getting a quote for car insurance or purchasing an insurance policy won’t impact your credit score. Insurance quotes are considered soft pulls on your credit, which means you can get quotes from multiple companies without having a negative impact on your credit score.

Methodology

Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states, plus Washington, D.C. 

For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by the state or insurer.

Rates for overall average rate, rates by ZIP code, and cheapest companies determined using averages for single drivers age 30, 35, and 45. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles per year.

Rates for driving violations and “poor” credit were determined using average rates for a single male 30-year-old driver with a credit score under 578.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of insurance costs. Your actual quotes may differ.