6-Month VS. 12-Month Auto Insurance Policies

Car insurance companies offer policies with different term lengths. The two most common are 6 months and 12 months. Both types have benefits and drawbacks. Here are the answers to the most common questions about 6-month vs. 12-month auto insurance policies.
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6-Month vs. 12-Month Auto Insurance Policies

Written by Brian Greenberg
CEO / Founder & Licensed Insurance Agent

Last updated: November 24th, 2022

Reviewed by Grant Desselle
Licensed Insurance Agent

What Are the Benefits of a 6-Month Auto Insurance Policy?

Compared to a 12-month policy, a 6-month policy is more flexible if you want to change providers or shop around for a lower rate. You’re locked in for only half the year instead of a full year. Although you can cancel a policy in the middle of a 12-month term, most companies charge a penalty for doing so.

Six-month policies are particularly attractive if your driving record has blemishes but is improving. The more time that passes, the less car insurance companies penalize you for violations and accidents. A policy where rates are recalculated every 6 months gives you twice the opportunities to lower your rate as your driving record improves.

If your car insurance company requires you to pay for your policy up front instead of monthly, a 6-month policy is much cheaper. However, you have to pay for it twice as often.

How Much Are the Premiums of a 6-Month Auto Insurance Policy?

The premiums for a 6-month auto insurance policy can vary based on a number of factors, including your age, gender, vehicle type, driving record, and zip code.

The type and levels of coverage you elect also influence your premiums. A 6-month liability-only policy at state-minimum coverage levels is cheaper than full coverage at higher levels. But it also offers less protection, potentially leaving you with thousands of dollars to pay out of pocket for damage to your own vehicle or someone else’s.

When comparing rates across major insurers, full-coverage premiums for a 6-month policy range from $700 to $1,290 for an average driver. But not every driver is average, and your rate could be anywhere within that range or above or below it. So, it’s important to do your homework and compare policies carefully before choosing one.

What Are the Benefits of a 12-Month Auto Insurance Policy?

The biggest benefit of a 12-month policy is that it locks in your rate for twice as long. This can be advantageous if, for instance, you get a ticket or file a claim a month into your policy. Your car insurance company won’t recalculate your rate, potentially resulting in an increase, for 11 more months.

How Much Are the Premiums of a 12-Month Auto Insurance Policy?

The average premiums for a 12-month auto insurance policy for a typical driver range from $1,400 to $2,580 for full coverage. Each major company’s rate for a 12-month policy is almost exactly double its rate for a 6-month policy, so in terms of total money spent per year, there are no advantages to choosing one policy over the other.

Can I Get Month-to-Month Auto Insurance?

None of the major carriers offer month-to-month auto insurance. It’s possible a smaller niche insurer in your market does, but if so, the price is likely astronomical, similar to renting a house or apartment month to month.

That said, many auto insurance companies allow you to buy a 6-month or 12-month policy but pay for it monthly instead of all at once.

Which Policy is Cheaper: 6-Month or Annual Auto Insurance?

A 6-month policy is half the price of an annual policy, but that’s only because you receive coverage for half as long. When broken down monthly, both policy terms cost almost exactly the same.

The following table shows the average yearly premium costs for drivers with specific types of violations.

What Are the Cheapest Options for 6-Month and 12-Month Auto Insurance?

Because each auto insurance company uses a different formula to calculate premium rates, the cheapest option for 6-month or 12-month auto insurance isn’t the same for every driver. Shopping around and comparing rates is critical if you want the best deal. The table below shows the average 6-month and 12-month policy rates from the major carriers.

Company 6-month policy cost 12-month policy cost
Allstate $1,270 $2,540
Farmers $1,060 $2,130
Geico $850 $1700
Liberty Mutual $1,290 $2,580
Nationwide $890 $1,790
Progressive $880 $1,760
State Farm> $700 $1,400

The Bottom Line on 6-Month VS. 12-Month Auto Insurance Policies

Both 6-month and 12-month auto insurance policies have their benefits, but the right choice for you depends on whether you want the flexibility of a shorter policy or the security of a longer one. Always do your research and compare offers closely before deciding.

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