How long does my car insurance last?

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Here's what you need to know...
  • A Personal Auto Policy (PAP) is a contract that lasts for either a six-month or a 12-month term
  • During the term, the insurance company must honor the rates that were quoted after the application was fully underwritten even if there’s an accident or a violation
  • As long as you don’t violate the terms of your contract and you make all of your payments, you’ll have coverage up until your term ends


When you get an auto insurance quote for the first time, you’re so focused on hearing a monthly payment figure that you don’t really consider how long the rate will last.

Typically, the number that you’ll hear represents how much the coverage that you selected will cost for the entire term.

After you review that number, you can ask for a breakdown that calculates what that number would equate to if you were to pay monthly, quarterly or semi-annually.

Not all insurance companies offer the same term lengths. Consumers can generally find both six-month and 12-month terms while shopping the market, with six-month products being the most popular.

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What’s the difference between a six-month and 12-month term?

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When you select a car insurance policy, the term is simply the way to say how long the policy will last.

If you’re looking at a quote or a policy declaration’s page, you can find out how long the term is by reviewing the effective date and expiration date of the policy.

Some policies might even have a section that defines whether you’re being quoted for a six-month or 12-month product.

The primary difference between six-month and 12-month terms is how often the policies are underwritten.

When a policyholder applies for coverage with a carrier, the carrier will review all of the information provided to ensure that the person painted an accurate picture of their driving habits and history.

After rates are made and the policy has been issued, the rate per unit of insurance that the policyholder carries will remain the same for the entire term.

The carrier cannot change the base rate that’s being charged during that term until the renewal comes.

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Why do most insurance companies offer six-month terms?

A majority of insurers will sell policies in six-month increments. This is because a six-month term benefits an insurer more than it benefits the policyholder.

While the insurer does have to process paperwork and review policies twice as often, there’s more potential for profits.

Here are some of the advantages of six-month policies:

  • Insurers can run your driving record every six months to look for violations
  • Insurers can charge for at-fault claims sooner after a loss
  • Insurers can set up a non-renewal sooner when they no longer want to take on a risk
  • Insurers can re-run credit-based insurance scores
  • Insurers are more likely to collect full payments so they can reduce administrative operation expenses

What are some of the advantages of a 12-month policy?

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Consumers can still find stockholder-run policies that last for a duration of 12 months.

While they are few and far between, it’s worth looking for the annual option if you’re looking for long-term affordability.

In a world where it feels like rates are going up regularly, having a 12-month policy ensures that you can lock in your rates for a year.

It’s also beneficial to know that you’ll have at least a year to save up for increased rates after you’ve had an accident or you’ve been convicted of a moving violation.

Since you have more time paying the fixed rates you’ve been quoted, you’ll even have extra time to shop around to see if you’re able to find a more competitive rate when your renewal comes.

Exceptions to Standard Rules

If you don’t need auto insurance coverage for an entire term, it’s possible that you can find a short-term policy that doesn’t last six or 12 months.

These specialty policies are called short-term or temporary products.

They can be purchased through a specialty provider and can range in premium based on your risk class.

In most cases, short-term policies provide only liability coverage and last for up to 30 days.

Will your policy automatically end at the end of your term?

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If you have a standard term, the coverage won’t just end on the expiration date. Instead, about 45 days before your policy is set to expire, the company will reassess the risk by running accident reports, credit reports, and driving records.

After the risk has been assessed again, the company can decide if they would like to keep you as a client.

They can also decide to raise your rates or lower them if you fall into a new risk class.

This can be beneficial if it has been 3 years and an accident or ticket surcharge has fallen off of your record.

What happens if your record is too risky?

If you aren’t eligible for coverage because of your driving record or new drivers in the home, the company will send you a non-renewal notice.

In most states, you’re required to get this at least 30 days before your coverage will expire.

This gives you ample time to find a provider that is willing to insure you.

Will the policy automatically renew?

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Every company has their own automatic renewal procedures. If you have an automatic payment set up, be sure to review your new rates so that you can cancel your coverage before the payment draft.

If you don’t have this EFT payment set up, you have to physically pay the payment for the policy to continue.

When a policy isn’t paid on the renewal date, the policy will cancel and no coverage will be afforded.

It’s very important to review your renewal as it approaches. See if there are errors on your policy and correct them if need be.

If you’re still not happy with the rate that you’re being quoted, it’s best to shop around to see how much other carriers will charge you for the same coverage.

To save time, you can use an online brokerage-style tool to compare rates with several companies all at once.

By entering your information in this free tool, you can compare instant car quotes and decide which carrier deserves your business the most.

Enter your zip code in our FREE tool below to compare car insurance rates now!

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