6-Month vs. 12-Month Auto Insurance: Which Should You Choose?

As you compare auto insurance quotes, you may notice that some insurers offer six-month or 12-month durations. Each policy length may offer certain advantages and disadvantages.

For example, six-month policies can give you more flexibility and discounts, but their premiums may increase more often. 12-month policies let you lock your car insurance rates for longer, but they aren't as easy to find and offer less flexibility if you want to update your policy.

So, which one should you choose? Let's explore the main similarities and differences to help you decide.

Six-month vs. 12-month car insurance policies

Six- and 12-month policies have many things in common while allowing customers to choose payment terms that work best for them. Although there is no wrong answer to the policy term you pick, we recommend being strategic and weighing the pros and cons carefully to make the most out of your insurance dollars.

	Six-month car insurance	12-month car insurance
Flexibility	Allows you to review or change your policy twice a year	Lets you review or change your policy once a year
Premium revisions	The car insurance provider can review and change your rates up or down twice a year	The car insurance provider can consider and adjust your premium up or down once a year
Insurer availability	Offered by most car insurance companies	Offered by a few auto insurance companies and might not be available to you based on driving history or credit score
Discounts	Allows you to add in new discounts you qualify for in six months or less	Allows you to add in new discounts you qualify for in 12 months or less

What is a six-month car insurance policy?

A six-month car insurance policy provides coverage for six months as long as you pay your premium. You can choose to renew or find other coverage without penalty six months after starting the policy.

Having a six-month policy means that if you need to change your coverage, end your policy, or switch insurers to search for a better rate, you can do so twice a year. This gives you two opportunities to avoid a change or cancellation fee for any coverage you need to add or remove.

What happens when a six-month policy ends?

Each time your auto insurance policy expires and renews, the insurance company reviews your policy premium and adjusts the amount you pay. It will also implement any new discounts you qualify for or any coverage changes you request. This can be a double-edged sword:

• You may get a lower rate sooner: Qualifying for new discounts, significantly improving your credit score, or having a ticket or accident fall off your driving record often leads to lower auto insurance rates.
• You may get higher rates sooner: Receiving a driving violation, getting into an accident, and economic factors like inflation may push your rate higher.

What is a 12-month car insurance policy?

Twelve-month auto insurance policies provide coverage that lasts 12 months. These policies allow you to make penalty-free changes once a year, which may be an advantage or a disadvantage:

• You may keep your rates low for longer. Because auto policies tend to get more expensive over time, an annual policy means you won't have to worry about increases more than once a year. Your premium price will stay the same for an entire year unless you add a driver or vehicle or change coverage before the policy period ends.
• You may have to wait to make changes. Guaranteeing your rate for an entire year means that if you're unhappy with your policy, need to make changes, or want to cancel, you'll have to wait until the term is up. Otherwise, you may face fees.

Twelve-month car insurance policies are less commonly available than six-month policies, so you may have trouble finding a company that offers one. We recommend USAA and Liberty Mutual for these.

What both car insurance policies share

Six-month and 12-month insurance policies share several similarities. For example:

• Coverage: Both policy terms often offer the same coverage options, so you're simply choosing whether you want to reevaluate in six months or a year.
• Premium: Both policy premiums can be somewhat similar. However, if you have an accident or a speeding ticket, and your rate changes twice annually, you will see the rate increase sooner than you would with a 12-month policy.
• Relevant factors: Various factors affect car insurance rates, such as your driving record, age, location, and even your credit history and score. These affect both six-month and 12-month policy terms similarly.

As you search for the best car insurance, remember that the policy term is less important than ensuring you get the coverage you need at a reasonable price.

Reasons to choose a 6-month car insurance policy

More policy flexibility

Six-month car insurance policies offer more flexibility than 12-month policies.

You may have more flexibility because you'll have the opportunity to review your insurance needs twice a year. A 12-month policy allows you to make changes once a year. If you like to regularly search for the best deals and ensure you're getting the best price possible, you may prefer a six-month policy.

Easier to find

Six-month insurance policies are the industry standard and are more readily available than 12-month policies. You may have to hunt for a 12-month policy, and your preferred insurance provider may not offer it or may reserve it for certain criteria, such as good credit or a clean driving record.

More potential discounts

Six-month policies allow you to benefit from new discounts you qualify for sooner than 12-month policies. Positive changes to your credit score, driving record, or other factors may qualify for more discounts, and you can implement them sooner with a six-month policy. Having a 12-month policy means you need to hold until your policy renews.

Lower rates

With six-month car insurance, reducing your coverage or switching insurance companies to get a better rate is quicker. If you want to exclude coverage after paying off your car loan or increase deductibles for an aging car, you can do that sooner with a six-month auto insurance policy. The same logic applies to switching your auto insurance to a different provider offering a lower rate.

Reasons to choose a 12-month car insurance policy

Avoiding premium revisions

12-month auto insurance coverage allows you to maintain a lower premium for longer. Your insurance agency reviews your premium every time you renew your policy. Factors such as new violations or accidents on your record or overall higher costs for all consumers may push your premium up with each revision.

A six-month policy allows the insurer to review your premium once every six months. If you have a 12-month policy, you'll lock in the same rate for a year, regardless of changes in the market that may push insurance costs higher. Just be prepared for an increase when your policy expires.

Easier to budget for

Knowing what to expect to pay for auto insurance each year makes it much simpler to plan for this expense. With a 12-month policy, your costs should conveniently fit into your spending plan whether you make monthly installments or pay annually.

Although there's a chance you can cut costs if you split your policy into two six-month plans, we'd recommend a 12-month policy if you're on a very strict budget and can't afford surprises.

Which car insurance policy should you choose?

Knowing how you like to approach your finances can be the most significant factor in deciding between a six-month and a 12-month policy.

• If you need to make frequent changes to your policy, you may prefer a six-month policy.
• If you like having a rate you can count on, we'd suggest a 12-month policy.

With a six-month policy, you'll be able to take advantage of your new discounts sooner. If something isn't working for you with a 12-month policy, you may have to wait double the time before getting your new discount or lower rate.

On the other hand, people who like knowing what they need to pay each month, and who have a clean driving record and a strong credit score, may benefit more from a 12-month policy. This set-it-and-forget-it 12-month term lets you take your mind off your auto insurance policy for a year.

Bottom line

Although you're required to carry minimum amounts of coverage in most states, the type, amount, and length of coverage come down to what you need and what you're comfortable with. Choosing between six-month and 12-month car insurance comes down to the available options and how you like to manage your money.

Six-month policies are more readily available and offer more flexibility and a better ability to take advantage of new discounts. Twelve-month policies allow you to lock in your insurance rate for a year, which may delay potential premium increases.

Before committing to a policy, be sure to compare rates and get multiple car insurance quotes to get the best deal. Learn how to switch car insurance if you're thinking about working with a new policy provider. You can also get tips on how to save money on car insurance.