Haris Ashley
While most car insurance policies last for six months, some companies offer 12-month policies. A 12-month policy can be beneficial as it locks in your car insurance rates and prevents your insurer from raising your premium for a year. However, it can also be a disadvantage if your circumstances change and you find a better deal, as you may have to pay a cancellation fee.
Some of the companies that offer 12-month policies include:
- Nationwide
- Liberty Mutual
- The General
- Kemper Specialty
- The Hartford
- USAA
- MetLife
- Infinity
- Erie
- Allstate
| Characteristics | Values |
|---|---|
| Companies offering 12-month policies | Liberty Mutual, USAA, Nationwide, Travelers, The General, Kemper Specialty, The Hartford, MetLife, Infinity, Erie, Allstate, Aviva, and Geico |
| Pros | Rate stability, fewer rate changes, less frequent renewals, fewer interruptions to coverage, fewer rate increases |
| Cons | Lack of flexibility, high up-front costs, not always cheaper, rate doesn't go down, difficult to find |
What You'll Learn
Pros and cons of 12-month policies
Pros of 12-Month Auto Insurance Policies
A 12-month auto insurance policy offers rate stability and fewer changes to your rates. With a 12-month policy, you can expect to pay the same rate until the policy's renewal date, avoiding unexpected increases. This makes budgeting easier as you don't have to worry about frequent policy renewals. Additionally, you are protected from potential price increases during the policy period.
Cons of 12-Month Auto Insurance Policies
The main disadvantage of a 12-month policy is the lack of flexibility. If you find a lower rate from a different insurer or if your circumstances change (e.g., improving your credit score or a speeding ticket expiring), you may be stuck with your current insurer and rate until the end of the policy term. 12-month policies can also be difficult to find, as most major insurance companies offer six-month policies as the standard. Additionally, a 12-month policy is not always cheaper than a six-month policy and may even have a slightly higher premium.
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Companies that offer 12-month policies
While six-month policies are the industry standard, some auto insurance companies do offer 12-month policies. These policies are less common and may need to be specifically requested.
Liberty Mutual
Liberty Mutual offers 12-month policies with an average annual rate of $1,538.
The General
The General offers 12-month policies with an average annual rate of $3,739.
Kemper Specialty
Kemper Specialty offers 12-month policies with an average annual rate of $3,395.
The Hartford
The Hartford offers 12-month policies but only for drivers over the age of 55.
USAA
USAA provides 12-month policies exclusively for military members and their families.
Nationwide and Travelers
Nationwide and Travelers are two prominent insurers that offer 12-month policies.
The Zebra
The Zebra is another company that partners with various insurers to offer 12-month policies.
MetLife, Infinity, Erie, and Allstate
These companies also offer 12-month auto policies.
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How to get the most affordable 12-month policy
Twelve-month auto insurance policies are less common than six-month policies, so you may need to specifically request them from providers. They are also difficult to find, as not all insurance providers offer them.
Keep a clean driving record
One of the best ways to keep insurance costs low is to maintain a clean driving record. Know your local and state traffic laws and avoid drinking and driving, as a DUI can be very costly. Safe driving practices will help you avoid the price increase that typically follows a car accident.
Compare price quotes among providers
Comparing price quotes from different providers will help you better evaluate your options and choose the most affordable policy.
Choose a coverage that meets your state's minimum requirements
Regardless of the length of the insurance policy or the insurance company, you need to choose a coverage plan that meets your state's minimum requirements.
Take advantage of discounts
Check whether your insurance provider offers discounts such as multi-vehicle and safe driver discounts, or the ability to bundle multiple discounts. Some insurance companies may also offer discounts for long-term customers.
Shop around when your policy is set to expire
When your policy is about to expire, you have the option to shop around and find a new, more affordable policy.
Pay your premium annually
If you can afford to pay your premium annually, many insurers will offer you a discount. Opting to pay monthly may result in slightly higher premiums.
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How to buy annual auto insurance
Most car insurance policies last for six months, but some companies offer 12-month policies. Annual auto insurance policies are not very common and may need to be specifically requested. A 12-month policy can be beneficial as it secures your car insurance rates and prevents your insurer from raising your premium for an entire year. However, it can also be a disadvantage if your rates decrease during that time due to changes in your driving record or other factors.
When considering an annual auto insurance policy, it is important to shop around and compare rates from different insurers. Factors such as your age, driving record, location, and the type of car you drive will impact your rates. It is also essential to consider your insurance needs and choose a policy that meets your state's minimum coverage requirements. Additionally, take advantage of discounts offered by insurance companies, such as multi-vehicle, safe driver, and bundling discounts.
- Determine your insurance needs: Consider the type of coverage you need, such as liability, collision, and comprehensive insurance. Also, ensure you meet the minimum policy requirements set by your state.
- Shop around: Compare rates from multiple insurance companies. Get quotes from at least three different insurers to find the best rate and coverage for your needs.
- Consider your driving record: Your driving history will significantly impact your insurance rates. If you have a clean driving record, you may qualify for lower rates. However, if you have any accidents, traffic violations, or DUIs on your record, your rates may be higher.
- Evaluate other factors: In addition to your driving record, insurance companies consider various other factors when setting rates, such as your age, gender, credit score, vehicle type, and location. Be sure to provide accurate information to get an accurate quote.
- Look for discounts: Many insurance companies offer discounts that can help lower your rates. Common discounts include multi-vehicle, safe driver, bundling (home and auto insurance), and good student discounts. Ask about any discounts you may be eligible for.
- Choose a reputable insurer: Select an insurance company with a good reputation and excellent customer service. Read reviews and compare customer satisfaction ratings to find an insurer that offers a positive experience.
- Review the policy details: Carefully review the coverage, exclusions, and limitations of the policy before purchasing. Ensure you understand what is covered and what is not. Pay attention to the deductible, which is the amount you will need to pay out of pocket before your insurance coverage kicks in.
- Purchase the policy: Once you have found the right insurer and policy for your needs, purchase the annual auto insurance policy. You may need to pay the full premium upfront or opt for monthly payments, depending on your financial situation and the insurer's requirements.
By following these steps, you can purchase an annual auto insurance policy that meets your needs and provides you with the necessary coverage. Remember to review and compare policies from different insurers to find the best value for your money.
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Pros and cons of six-month policies
Six-month auto insurance policies are the industry standard, but some companies offer 12-month policies. While 12-month policies can be harder to find, they do have their advantages. Here are the pros and cons of six-month policies.
Pros of six-month policies
- More flexibility: Six-month policies allow for more flexibility than 12-month policies. If you're unhappy with your insurance provider or find a better option, you won't have to wait as long to switch.
- Driving activity is re-evaluated more frequently: High-risk drivers, for example, might prefer six-month policies. Tickets or accidents typically drop off your driving record after three to five years, and each time your policy renews, your insurance company may remove any surcharges that no longer apply.
- Paying in full may be more accessible: Some insurance carriers offer discounts for customers who pay their policy in full upfront instead of paying monthly instalments. While this option is available for both six and 12-month policies, paying for a full year upfront may not be possible for some. In this case, a six-month policy could make paying in full more accessible and may allow you to qualify for the discount.
Cons of six-month policies
- More frequent premium recalculations: With a six-month policy, your premium could fluctuate more frequently. Your premium usually stays steady for the year with a 12-month policy unless you make changes like adding or removing a vehicle or driver.
- Potential to forget renewal dates: Six-month policies renew twice a year, so you might be more likely to forget your renewal dates and potentially miss a payment, causing a lapse in insurance coverage.
- Possible missed discounts: For example, a discount for new policyholders could provide more savings over a 12-month period. With a six-month policy, you could lose those savings sooner.
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Frequently asked questions
A 12-month auto insurance policy covers your vehicle for a full year. It locks in your insurance rate for the entire year, protecting you from potential price increases during the policy period.
The primary benefit of a 12-month auto insurance policy is rate stability. Your insurance rate remains the same for the entire year, providing protection against unexpected increases. Additionally, you experience fewer rate changes and renewals, reducing the chances of lapses in coverage.
One of the main drawbacks is the lack of flexibility. With a 12-month policy, you may have to wait longer for a rate decrease if a violation is removed from your record or if your circumstances change. It can also be challenging to find insurance companies that offer 12-month policies, as six-month policies are more common.
Several insurance companies offer 12-month auto insurance policies, including Liberty Mutual, USAA, Nationwide, The General, MetLife, Infinity, Erie, and Allstate. However, some companies may only offer 12-month policies to certain customers or in specific states.
The choice between a 6-month and a 12-month auto insurance policy depends on your personal preferences and circumstances. If you value stability and want to lock in a low rate for a longer period, a 12-month policy might be preferable. On the other hand, if you want more flexibility to take advantage of changes in your driving record or shop around for better rates, a 6-month policy could be more suitable.
