Why do some car insurance companies only write six-month policies?

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Dec 16, 2016

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Here's what you need to know...
  • Insurance companies must determine the level of risk of potential customers
  • Six-month policies can be beneficial to both drivers and insurance companies
  • Find the best six-month policy for your needs by comparing several quotes

When you are searching for car insurance, you may wonder why some car insurance companies only offer six-month policies while others offer a 12-month auto insurance policy.

Since the concept of auto insurance is unfamiliar to many people, the Internet is abuzz with searches from users looking for clarification on complex topics.

One question that comes up again and again relates to the duration of the term of coverage at certain auto insurance companies.

Read on to learn why some auto insurers only offer a six-month auto insurance policy, and then be sure to enter your zip code for your free car insurance comparison!

The Bottom Line on Six-Month Auto Insurance Policies


Auto insurance companies are looking to make a profit. Some companies cater to drivers with good driving records to keep the level of risk low and the profits high.

Other companies cover drivers with more questionable records or habits at higher premiums.

The latter may employ different methods to keep their level of risk as low as possible given the circumstances.

A shorter policy term can serve these companies well by providing them with more opportunities to assess the level of risk posed by each driver and to adjust rates accordingly.

Why Six-Month Policies Work for the Auto Insurance Company

Factors written on a chalkboard

If the driver, or anyone listed on his policy, has had an accident in the last six months, the premiums are likely to rise. The same holds true if someone gets a traffic ticket.

If you filed a claim during the previous six months, that could negatively affect your premiums as well.

With a six-month policy, all the factors that go into the risk analysis can be computed two times per year instead of just once.

The extra analysis could potentially save the auto insurance company a lot of money by keeping a more accurate assessment of risk.

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Why Six-Month Policies Can Work for Drivers

A six-month policy can work for the driver as well.

If a driver maintains a good or excellent driving record, his premiums could be lower in the second half of the year than they were in the first.

Those six-month policies also cut the year’s payments in two, thus making each chunk more manageable.

If money is tight, it can be advantageous to pay two smaller payments instead of a single large one annually. Of course, many insurers offer monthly payment plans too.

Getting Quotes from Many Different Auto Insurance Companies


Auto insurance companies differ widely when it comes to the policy details and premiums they assign to their drivers.

Online quote comparison tools make it easy for a prospective policyholder to evaluate these different policies against each other to see which one is best for that driver’s unique circumstances.

By inputting personal information, a driver will see clear, comprehensive results that give all the information needed to make an educated decision about auto insurance coverage.

The online quote comparison process is quick and easy, yielding results that will save drivers money on coverage that is personalized to their needs and circumstances.

Don’t wait any longer. Start saving money now on a policy that works best for you. Compare quotes today with just your ZIP code!

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