Updated: July 1, 2025
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Six-month policies provide flexibility in rates and options for policyholders but include the risk of rate increases once a term is over.
12-month policies can help you save in the long term but are less flexible.
Six-month policies are the standard for most insurers, while 12-month policies can be difficult to find.
Choosing between a six-month and 12-month policy affects your overall costs, when you can compare car insurance quotes and how often your insurer can adjust your premium. Understanding the pros and cons of each option helps you make smarter, cost-effective decisions.
Six-month car insurance policies work well for drivers who value flexibility and want to monitor rate changes more frequently. Here are some key considerations for shorter-term policies:
With a six-month policy, insurers review your driving record and risk profile more often, which can lead to lower premiums if your circumstances improve. For example, your next renewal could reflect a lower rate if you've recently improved your credit score.
Shorter terms make it easier to change insurance companies without waiting a full year, allowing you to compare quotes to find the cheapest car insurance for you. If you move to a new state with lower insurance rates, for instance, having a six-month policy makes it easier to switch to a local insurer sooner.
If your coverage needs change, such as adding a new driver or modifying limits, a six-month policy allows those updates to be reevaluated at the next renewal instead of waiting a full year. For instance, if your teen gets their license halfway through the policy term, you can review your coverage sooner and adjust as needed.
If your initial policy was rushed or minimal, a six-month term gives you the chance to reevaluate and upgrade coverage sooner.
With renewals happening twice a year, insurers have more opportunities to reassess your risk profile and adjust your rate. Even small changes in your driving record, location or credit can lead to higher premiums at your next renewal.
A shorter policy term means you’ll need to keep track of renewal dates more often, increasing the chance of an accidental lapse in coverage. Forgetting to renew on time can result in higher rates or even a break in your insurance history.
Some auto insurance discounts are temporary or tied to specific term conditions, meaning they may not automatically apply when your policy renews. If you’re not careful, you could lose savings between terms without realizing it.
The average cost of a six-month car insurance policy varies based on factors like your driving record, location and coverage level. Below are the costs for six-month policies with minimum coverage and full coverage.
| AAA | $400 | $937 |
| AIG | $481 | $1,264 |
| Allstate | $493 | $972 |
| American National | $160 | $396 |
| Amica | $335 | $691 |
| Chubb | $360 | $830 |
| Farmers | $484 | $921 |
| Geico | $273 | $608 |
| Kemper | $367 | $747 |
| National General | $301 | $663 |
| Nationwide | $433 | $765 |
| Progressive | $413 | $773 |
| State Farm | $307 | $725 |
| Travelers | $303 | $581 |
| UAIC | $747 | $924 |
| Utica Insurance | $345 | $611 |
| Western National Insurance | $225 | $746 |
*These rates represent the cost of car insurance for a year calculated with Quadrant Information Services divided in half.
Six-month car insurance policies can be beneficial for many drivers. Those who want to try out different insurers, for instance, can do so after every term, giving them a chance to find an insurer that suits them best.
Younger drivers getting car insurance can also benefit from short-term policies, especially if they have a birthday in the next six months. As younger or first-time drivers seeking car insurance maintain a good driving record, their premiums may decrease each term.
A six-month policy also benefits drivers who have improved their credit score, as car insurance for drivers with poor credit is often expensive. Similarly, drivers who have had infractions, such as speeding tickets, removed from their records can benefit from a rate revision at their next policy renewal.
If you’re looking for predictable premiums and less hassle with renewals, a 12-month car insurance policy might be the better fit. Below are some of the main advantages and disadvantages of choosing a longer-term plan:
Your rate stays locked in for 12 months, offering predictable costs and protection from mid-year price hikes. For example, if your insurer raises rates across the board, your premium stays the same until renewal.
Renewing only once a year reduces the risk of a lapse in coverage.
If your driving habits, location, and credit score don’t change much, there’s little reason to reprice mid-year.
With 12-month car insurance, you're locked in for longer, so switching insurers may require waiting or paying a cancellation fee. If a better rate becomes available mid-term, you might have to stick with your current provider until the year ends.
Paying for a full year can feel like a bigger financial hit compared to a shorter-term policy. If you’re trying to manage cash flow, a 12-month car insurance premium might be harder to budget for than a six-month plan.
12-month car insurance policies typically cost more. Take a look at average costs by company for 12-month car insurance below.
| AAA | $799 | $1,874 |
| AIG | $963 | $2,528 |
| Allstate | $986 | $1,945 |
| American National | $320 | $791 |
| Amica | $670 | $1,381 |
| Chubb | $720 | $1,661 |
| Farmers | $968 | $1,842 |
| Geico | $545 | $1,216 |
| Kemper | $734 | $1,494 |
| National General | $603 | $1,326 |
| Nationwide | $866 | $1,531 |
| Progressive | $825 | $1,546 |
| State Farm | $613 | $1,449 |
| Travelers | $607 | $1,162 |
| UAIC | $1,493 | $1,849 |
| Utica Insurance | $690 | $1,223 |
| Western National Insurance | $451 | $1,492 |
*These rates represent the cost of car insurance for a year calculated with Quadrant Information Services.
A 12-month term may suit some drivers better than others. This duration benefits those who maintain a good driving record and want to avoid a twice-annual premium increase. It's best for those who prefer consistency in rates over flexibility.
These policies may also benefit those who can afford to pay for an entire policy in full, as some insurers offer discounts for full payment. They're also ideal for low-income individuals looking for car insurance who can’t afford any rate increases twice a year. Locking in a single rate for the whole year can help if you get into an accident.
If you expect your credit score to drop within the year, purchasing a 12-month car insurance policy can be beneficial. This way, insurers won't factor it into your rates for at least another year, giving you time to improve it before your next renewal.
The choice between a six-month and 12-month car insurance policy comes down to your need for flexibility versus stability. A six-month policy offers more frequent chances to adjust or switch, while a 12-month policy provides rate consistency and fewer renewals. Consider your driving habits, financial goals, and how often you want to reassess your coverage before deciding.
Choosing between six-month and 12-month car insurance policies can impact your premium stability, flexibility, and how often you renew. Below, we answer frequently asked questions about these two policy terms to help you decide which fits your needs best.
Consider your driving record, financial situation, and preferences for flexibility vs. stability. Choose a six-month policy if you expect positive changes (like violations dropping off your record), want flexibility to switch insurers or prefer smaller upfront payments. Choose a 12-month policy if you have a clean record, want rate stability or prefer "set it and forget it" convenience.
Key factors include: your driving record stability, upcoming changes (like paying off a car loan or turning 25), your preference for rate predictability vs. flexibility, budget for upfront payments, and whether you tend to forget renewal dates.
No, you can't change your policy term mid-period. However, you can switch when your current policy expires. Some insurers may charge early cancellation fees if you cancel before your term ends to switch to a different company with your preferred term length.
Car insurance isn't limited to six months, but most insurers prefer six-month terms because they allow more frequent rate adjustments based on your driving record and changing market conditions.
No, while six-month policies are the most common, some insurers offer 12-month (annual) policies, and a few may provide other term lengths, like three-month policies for high-risk drivers.
Why Trust MoneyGeek?
MoneyGeek compares and ranks financial products to help you make the best financial decisions. Our research analyzed data from Quadrant Information Services and state insurance departments using various driver profiles to understand the rates for six-month vs. 12-month policies across ZIP codes in the United States.
Study Overview
MoneyGeek calculated the average cost of liability insurance in each state by gathering rates from car insurance companies and calculating the national average, as well as the state averages for liability-only coverage. We used sample profiles of drivers with clean records and drivers with accidents or tickets.
We also analyzed how liability insurance rates compare to full coverage rates to determine whether buying a higher level of protection is worth the cost.
Data Sources and Depth
MoneyGeek gathered data from Quadrant Information Services and state insurance departments. Our study analyzed 83,056 quotes from 46 companies across 473 ZIP codes, considering various driver profiles.
Driver Profile
We used the following driver profile to determine the average annual car insurance costs:
To calculate the average cost for motorists in the United States with varying coverage requirements, we adjusted this profile by region, coverage type and amount.
Coverage Levels and Deductibles Explained
This study compared the premiums between six- and 12-month policies. We reviewed coverages and deductibles for each policy type and collected quotes from various insurance companies.
A deductible is a specific amount of money you agree to pay out of your pocket before the insurance company pays for a claim. The higher the deductible, the lower your monthly premium will be.
Coverage can include liability, collision and comprehensive. Comprehensive and collision insurance, often called "full coverage" or 100/300/100 insurance, provides the most financial protection.
100/300/100 stands for:
For our sample driver, we used 100/300/100 comprehensive and collision coverage with a $1,000 deductible when calculating national averages.
50/100/50 means:
While gathering state-specific data, we selected a sample driver with 50/100/50 comprehensive and collision coverage and a $1,000 deductible.
Learn more about MoneyGeek's methodology.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
