What is six-month car insurance?

Whether you’re buying car insurance for the first time or simply renewing your coverage for another term, there’s one question everyone has to answer: six months or 12?

Six-month car insurance gives you coverage for half a year, and offers some advantages over a 12-month policy. The shorter term means you won’t be stuck with an insurer for a whole year if you find its coverage or customer service to be lacking, or if the rate you’re paying is too expensive.

If you’re someone who only needs car insurance for part of the year, a six-month policy could be the short-term option you need. Likewise, if you’re the kind of person who prefers to pay their policy in full, rather than monthly, the bill for a six-month policy will be cheaper than for a 12-month policy.

Key highlights

• A six-month policy gives you the flexibility to shop around and switch providers, adjust coverages and apply discounts more often than if you had a 12-month term.
• Nationwide has the cheapest six-month car insurance policy, with a sample rate of $774, or $1,548 annually.
• Allstate has the most expensive sample rate for a six-month policy, $1,254, or $2,509 for 12 months.

What is six-month car insurance?

Six months is a common term – or duration of coverage – for personal auto insurance. A six-month insurance policy simply means that, for half a year, your premium price is locked in based on the rating details for your household as of the effective date of the policy.

“The benefit of this lock-in is that, even if your insurance company files for a rate increase during your six-month timeframe, it won’t impact you until after the six months expires,” says Hanna Ogle, executive vice president of personal lines for Watkins Insurance Group in Austin, Texas.

As with a 12-month policy, you can purchase whatever kind of coverage you require with six-month car insurance, ranging from state-minimum liability insurance to full coverage.

How does a six-month car insurance policy work?

Six-month car insurance works the same way a 12-month policy does. In exchange for paying a premium to your carrier, the insurer agrees to indemnify, or protect, you from financial loss following an auto accident. How much protection your policy provides will depend on the type of car insurance you buy.

There are three primary components to six-month auto insurance:

Liability insurance

In an at-fault accident, this applies to property damage or bodily injury you cause to others. It is typically broken down into three components, expressed as a series of numbers such as 50/100/50.

• The first digit refers to the amount of coverage for bodily injury per person, in the tens of thousands of dollars, such as $50,000.
• The second refers to the amount of bodily injury coverage per accident; in this case, $100,000.
• The final number represents the amount of money for property damage, in the tens of thousands of dollars, per accident. Here, it’s $50,000.

Every state except New Hampshire requires drivers to carry a minimum amount of liability insurance. These levels vary from state to state but are typically too low to cover a major accident, leaving you with potentially thousands in financial liabilities. Experts recommend carrying at least 50/100/50 in liability coverage.

Collision insurance

This covers physical damage caused to your vehicle in the event of a collision with another vehicle or stationary object, such as a guard rail or building. Unlike liability insurance, which comes with a fixed amount of coverage, collision insurance will not reimburse you for more than what your vehicle’s actual cash value (ACV) is.

Collision insurance also comes with a deductible, which is a set amount of money that you must pay before your coverage will kick in. Deductible amounts can range from as little as zero dollars to $1,000 or more. In general, the greater your deductible, the lower your premium will be.

Comprehensive insurance

This applies to damage your vehicle sustains in non-collision events, including:

• Severe weather like hail or tornadoes
• Natural disasters like wildfires and floods
• Theft, rioting and vandalism
• Striking an animal like a deer

As with collision insurance, comprehensive coverage is limited to your vehicle’s ACV, and you’ll need to pay your deductible before your insurer will step in to handle expenses like repair or replacement of your car.

Premium payments

Most carriers allow for payment flexibility. While you can divide the premium into smaller payments, such as every three months, two months, or monthly, this convenience often involves extra fees. Generally, paying the full premium upfront in a lump sum is the most economical option if feasible for you.

“Paying premiums every six months tends to be cheaper than monthly payments because insurers often provide a discount for lump-sum payments, reducing the overall costs,” says Geoff Cudd, founder of FindTheBestCarPrice.com, an auto-buying rating and review site. “But generally, a 12-month policy may offer more stable rates and avoid mid-year rate increases.”

How much does a six-month policy cost?

The cost of a six-month car insurance policy can vary widely, based on factors like your age, location, vehicle make and model, and driving history. The cheapest sample rate we found is with Nationwide, just $774 for a half-year policy. The most expensive insurer is Allstate, with an average premium of $1,254.

To give you a better idea of what a full-coverage car insurance policy may cost every six months versus every 12 months, check out the chart below, based on data from CarInsurance.com.

These rates are based on single, a 40-year-old driver of a 2023 Honda Accord with $100,000 bodily injury per person, $300,000 bodily injury per accident and $100,000 property damage per accident, plus comprehensive and collision coverage with a $500 deductible.

Six-month car insurance policy: pros and cons

There are benefits and drawbacks to opting for a six-month car insurance policy. To help you make a more informed decision, weigh the following pluses and minuses carefully:

Who should purchase a six-month car insurance policy?

A six-month auto insurance policy is a good choice for drivers who need financial flexibility, Cudd says.

“Good candidates for six-month policies include individuals with changing driving records, young drivers who expect their rates to decrease as they gain more experience, or anyone who prefers the flexibility of adjusting their coverage more frequently,” Cudd also says.

To help you decide which frequency is right for you, request and compare quotes for both a six-month and 12-month policy from at least three different carriers. If you don’t want to do the work yourself, speak with an independent insurance agent, who can compare quotes from multiple insurers.

Why do car insurance companies prefer six-month policies?

Six-month car insurance policies can work to the carrier’s advantage, and possibly to your disadvantage.

“A six-month rate lets an insurer re-evaluate your risk level more often, which means they can raise your rates more often,” says Sean Tucker, lead editor with Kelley Blue Book, an automotive research, rating and review organization..

This can benefit drivers who have improved their driving habits or qualify for discounts, as changes can be reflected in their policy sooner than having to wait 12 months.

But if you’ve had an accident or moving violation while your six-month insurance policy is in effect, you can expect to see a rate increase when it comes time for renewal.

Frequently asked questions

Is it better to pay my insurance premium monthly or every six months?

You can save money by paying your six-month policy premium upfront. Many auto insurance companies offer a discount, usually around 9%, for paying in full. If this isn't convenient, most insurers also have monthly billing options with an installment payment service fee of $3 to $5 per payment.

Can I cancel my six-month auto insurance policy early?

Most carriers will permit you to cancel a six-month auto policy early and issue you a refund for the unused portion of your policy period.

However, some insurance policies may be designated as “fully earned,” which means the carrier has fully earned your premium on the first day of coverage, and even if you cancel it early there would be no refund.

Check the fine print on your policy carefully or ask your insurance agent. Also, note that some policies charge a cancellation fee for ending the policy early.

Methodology

Editors collected rate information from auto insurance comparison site CarInsurance.com for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

In addition, we also calculated rates for these hypothetical drivers, but with one or more of the following on their record: speeding ticket, at-fault accident, DUI/DWI, poor credit history, or a lapse in coverage.

We analyzed more than 53 million quotes, over 34,000 ZIP codes, and 170 insurance companies nationwide.

Note: 100/300/100 means up to $100,000 for the medical bills of those you injure, up to $300,000 per accident for bodily injury liability for all persons injured in one accident, and $100,000 to repair other drivers’ cars and property you damage.