6-Month Vs. 12-Month Auto Insurance Policy – Which is Better?

Last Updated on May 20, 2019

You have plenty of options when choosing a car insurance policy, and it can be difficult to determine what type of coverage is best for you. One of the biggest decisions you will have to make is how long you want your policy to last for. Car insurance policies are typically available in either 6 month or 12 month increments, and which one you go for depends on what makes most sense for your personal needs. Here are the pros and cons of both options to help you decide which is best for you.

Benefits of a 6-Month Auto Insurance Policy

There are many benefits to choosing a 6 month auto insurance policy. The biggest benefit is that they are much easier to find. 6 month policies are actually much more common than 12 month auto insurance policies, so you will have much more choice when it comes to what carrier you want to use. If your main goal is selection when selecting your car insurance, a 6 month policy is probably going to be the best choice for you.

Another benefit of a shorter insurance policy is that your rates will be recalculated twice as often. This is very helpful if you are taking deliberate steps to get your rate down, because you won’t have to wait as long before lower rates become available to you. For example, many insurance companies will lower your premiums as you get older and more experienced, and you will be able to access these lower rates sooner after your birthday happens when you have a shorter premium. Other factors that can help when your rates are recalculated are a lower credit score, tickets or accidents coming off your record, or having a car loan paid off. Your rates might even change if a major life event happens for you, like getting married or moving. Additionally, states often change their insurance requirements, which can affect your policy as well.

Additionally, a shorter insurance policy makes it easier to change providers if you want. Not only will a 6 month policy give you the opportunity to readjust your rate within your existing insurance company, but it will also allow you to shop around for new insurance companies if you wish. New insurance providers are popping up all the time, and you might find that there’s a new option that can offer you a better rate.

While you technically can change insurance carriers whenever you want, it’s easiest to change when your policy is up. Changing at this period of time means you won’t incur any cancellation fees. Insurance companies also are more likely to offer discounts and deals when you have the option to change policies, so you can get a better deal if you shop around during this period. 6 month premiums are generally a bit cheaper than year-long premiums as well. However, this varies widely from company to company, and it’s always worth it to shop around and make sure you are getting the best deal.

Benefits of a 12-Month Auto Insurance Policy

While 6 month insurance policies are the more common option, there are also many benefits to choosing a 12 month policy. These policies are usually offered by smaller local providers as opposed to the big national providers. The biggest advantage of a 12 month policy is that you won’t have to worry about it for an entire year after you’ve selected it. If you are happy with the rate you have now and want to avoid any sort of rate recalculation, a 12 month policy can be beneficial for you. Keep in mind that if you decide to add or remove a driver from your policy, you could still experience a rate revision with a 12 month policy.

Another potential benefit of using a 12 month policy is that you can choose to have a paid-in-full policy. This means you only have to make one payment for the entire year. While this does mean that you need to part with a large amount of money at once, it also means that you won’t have to worry about forgetting to pay for your car insurance every month. If you can afford it and value the convenience of only having to make one payment, you might want to commit to a 12 month policy.

In general, 6 month policies are much more common and provide the flexibility that drivers want with their car insurance. However, if you would prefer a 12 month policy, you can find them with local and regional insurers. If you are still feeling unsure about which type of policy is best for you, it will be worth it to call around to different insurance providers and ask about their rates and re-evaluation policies in more detail.