Why 6-Month Policies are Normal for Car Insurance Companies
Most car insurance companies only offer 6-month auto insurance policies although almost all are automatically renewed.Â The main reason for a 6-month term has to do with limiting liability risk to the car insurance company.
Some auto insurance companies provide 12-month policies and this should be another requirement on your checklist when performing any kind of car insurance comparison search.
Learn about why policies are often issued in six month terms below and when you’re ready enter your ZIP code above to get FREE car insurance quotes.
Why just a 6-Month term on my Car Insurance Policy?
Since car insurance premiums are based on risk a shorter term minimizes the amount of time you are insured and this can provide protection to car insurance companies from the risk score of your profile changing during the coverage period.
When a car insurance company offers you coverage they can not change the coverage during the term of the policy therefore a 6-month term has been adopted by most industry providers as an acceptable window of time for risk.
Although most car insurance policies are renewed every six months the auto insurance company retains an option to drop you should your risk levels exceed their guidelines (or offer you such high premiums you will drop them) once the policy period expires.
Think of the logic behind six month policies as a legal “out” for the provider at the end of your policy term.
Anytime a change in your driving record happens (especially something serious like a DUI charge) don’t be surprised to see your rates higher next renewal period or a notice of termination should the change be serious enough. This is why learning about car insurance is a critical tool for any driver as you never really know when you might have to switch car insurance companies.
On the upside, the option for car insurance companies to offer six month policies does play a big role in maintaining affordable auto insurance premiums.
Why do I want only a 6-Month Policy?
Think about this. Your car insurance coverage is basically locked in anytime a policy is renewed so what if your driving record improves?
How about your credit score? 6-month car insurance policies can also reward good drivers with discounts so this practice in the auto insurance industry is really win-win for most consumers.
How do I Find the Best 6-Month Car Insurance Quotes?
Since car insurance companies generally only offer 6-month policies (with the exception of a few) you probably will be comparing the same policy term without knowing it.
However its certainly a question you need to ask since if two car insurance companies offer the exact same coverage with the same premiums but company A provides a 12-month policy. It may be just worth going with company A for the added peace of mind.
Car insurance quote comparison should never be just about policy terms and premiums however.
Always consider other factors such as types of coverage, policy limits and how claims are handled.
We can help you start car insurance quote comparison online. Enter your ZIP code here to get FREE auto insurance quotes today!