What You Need to Know About Auto Insurance Companies and 12-Month Policies

Many auto insurance companies offer 12-month policies, including Liberty Mutual and USAA. The cost of a 12-month auto insurance policy vs. paying monthly isn't much different, but rates will be locked in longer.

UPDATED: Apr 19, 2022Fact Checked

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: Apr 19, 2022

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A Concise Overview

  • Not all auto insurance companies offer a 12-month auto insurance policy term
  • Two of the biggest companies that do offer 12-month auto insurance policies are Liberty Mutual and USAA
  • A 12-month policy locks in your rate for a full year so that you won’t have a rate increase until that year is up

Most auto insurance companies offer 12-month policies, including Liberty Mutual and USAA. The cost of annual auto insurance coverages vs. monthly isn’t much different, but rates will be locked in longer.

How much auto insurance is a month depends on many factors, but the average auto insurance rate is $325/month.

You can save hundreds on auto insurance per year through policy discounts and factors that determine auto insurance. If you’ve been shopping for auto insurance, you’ve probably noticed that some auto insurance policies only last six months.

Which is better, annual car insurance vs. monthly? It can be hard to say, but with a six month car insurance policy, your rate may change as soon as your policy is over.

Continue reading through this guide to learn what insurance companies offer 12-month policies, what 12-month auto insurance rates look like, and how to buy auto insurance that’s right for you. You may find that a six month policy for car insurance is too short a time frame, and that a 12-month policy may be much better.

Do you need a 12-month auto insurance policy right now? Not a problem. Enter your ZIP above for 12-month auto insurance quotes from top companies today.

What auto insurance companies offer 12-month policies?

Most insurance companies offer six-month auto insurance policies. This allows them to reevaluate your policy often and make adjustments to your rate as needed.

Although it can be more difficult to find a 12-month auto insurance company, it’s not impossible. It’s becoming quite common for drivers to want a policy that lasts a full year rather than deal with having car insurance for only six months.  Here is a list of companies that offer 12-month auto insurance policies.

  • Liberty Mutual
  • USAA
  • Erie
  • The Hartford
  • MetLife
  • The General
  • Infinity
  • Kemper Specialty
  • Unique

Most auto insurance companies usually give you an option on how long you want to keep your auto insurance policy. There is no difference in the coverage, just how long you are locked in. However, keep in mind that month-to-month auto insurance is hardly offered, with companies preferring a mid-range amount of time. This is why six months is ideal.

Some companies, like Aviva, only offer 12-month policies to certain customers. In order to get a year-long policy, you have to have a clean driving record for three years. Otherwise, the company will only offer you a six-month policy.

GEICO has recently adopted six-month auto insurance policies, allowing customers to renew after the six-month period is over.

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How can you get cheap auto insurance rates on 12-month policies?

The keys to cheap auto insurance are policy discounts and factors that determine auto insurance. Without policy discounts, your auto insurance rates could be more expensive than anticipated.

How much is auto insurance a month? Why is auto insurance expensive? Auto insurance is calculated by several factors, such as:

  • Age
  • Auto Insurance Company
  • Gender (outlawed in some states)
  • Marital Status
  • Credit History
  • Driving Record
  • Commute Mileage (number of miles you’re estimated to drive within the policy)
  • Coverage Level
  • Vehicle Insurance Quote
  • ZIP Code

Depending on these factors, your auto insurance can be cheaper than average or more expensive. Let’s take a look at the average six-month rates vs. 12-month car insurance policies of the top 10 auto insurance companies.

How much does 12-month auto insurance cost?

The table below compares six-month vs. 12-month auto insurance policies.

Average Auto Insurance Rates of the Top 10 Auto Insurance Companies
CompaniesAverage Annual RatesAverage Six-Month RatesAverage Monthly Rates
American Family$3,443$1,722$287
Liberty Mutual$6,096$3,048$508
State Farm$3,268$1,634$272
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We’ve narrowed down the auto insurance rates to monthly rates. This shows how much your budget can be affected by auto insurance. USAA auto insurance is the cheapest auto insurance.

However, USAA is military and veterans auto insurance, only available to members of the U.S. Armed Forces and their immediate families.

GEICO auto insurance quotes are the second cheapest, but Progressive auto insurance is $800 more expensive.

So, which policy duration is cheaper?

The six-month car insurance rates are annual rates cut in half. There is usually no price difference on rates between a six-month policy and a 12-month policy.

Some auto insurance companies will offer a discount when you renew your auto insurance. Affordable 12-month auto insurance is available, as is cheap six-month auto insurance, but 12-month rates are locked in longer.

What are the pros and cons of 12-month auto insurance?

As with any big financial decision, it’s important to look at both sides of the issue.

Keep reading as we break down reasons to buy 12-month auto insurance and why it might not be the best option for you.

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What are the benefits of a 12-month auto insurance policy?

The main benefit of a 12-month auto insurance policy is that your rate is locked in for the entire year. There aren’t any surprises that may pop up during your policy.

Some auto insurance companies may offer an extra discount for locking in a longer policy, but you would need to be a great driver and have had coverage with that company for a long time. Not every company offers this possibility.

What are the benefits of a six month auto insurance policy?

A six-month policy offers more flexibility for both sides.

For example, if you have an accident or ticket on your record, your rates will go down once those are off your driving record after three to five years.

If the infraction falls off six months into your 12-month policy, you have to pay that higher rate for six extra months. With a six-month policy, you would get a lower rate immediately.

The same is true for the auto insurance company. If you receive a ticket, it will raise your rates much faster.

Another benefit to a six-month policy is that you can compare quotes more often to look for a lower auto insurance rate.

Should you buy 12-month auto insurance?

That is completely up to you.

There is usually no rate difference between a 12-month policy and a six-month policy, and a longer policy can be harder to find.

However, if your primary goal is locking in a low rate for as long as possible, it might be worth the trouble to find a 12-month policy.

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What is the market share of the top 10 auto insurance companies?

Market share is the percentage of all of the available customers a specific company has in a specific industry. Auto insurance companies are ranked based on market share. Market share can reflect the number of direct premiums and loss ratios.

Here are the top 10 auto insurance companies by market share.

Top 10 U.S. Auto Insurance Companies by Market Share
RankCompaniesDirect Premiums WrittenLoss RatiosMarket Shares
1State Farm$41,963,578,0006317.01
6Liberty Mutual$11,776,654,000624.77
10American Family$4,687,909,000691.9
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GEICO is ranked second despite having one of the cheapest auto insurance rates. Although cheap auto insurance rates are popular among some customers, financial performance and company size make a difference in a company’s rank.

Why are auto insurance company ratings important?

The thread and rubber of a good auto insurance company are auto insurance ratings. People search for the best deals, but people also search for good reviews.

Bad reviews can turn a customer away. According to the Insurance Information Institute, they’re judged by customer response and financial strength. One of the top financial strength agencies is A.M. Best.

Each year, auto insurance companies participate in A.M. Best ratings to keep their financial performance ratings up to date. Another method to review an auto insurance company’s performance is through the National Association of Insurance Commissioners (NAIC) complaint index.

The NAIC Complaint Index measures the rate of complaints within a year.

Let’s break down the ratings of the top 10 auto insurance companies.

A.M. Best and NAIC Complaint Index for Top Auto Insurance Companies
CompaniesA.M. Best RatingNAIC Complaint Index
American FamilyA1.36
Liberty MutualA3.85
State FarmA++1.14
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According to the A.M. Best rating guide, the best financial strength ratings are from “A” to “A++”. The “A” ratings are assigned to companies who show excellent or superior ability to meet obligations.

The NAIC Complaint Index shows the rate at which the companies received complaints from their customers. Anything above one is above average. Allstate, Progressive, and Travelers are the only auto insurance companies with an NAIC Complaint Index under one.

How can you save money on 12-month auto insurance?

There are many different ways to save on your auto insurance.

Earlier we talked about the factors that affect your auto insurance rates. Keeping a clean driving record and a good credit score can go a long way in lowering your rates.

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What auto insurance discounts are offered on 12-month auto policies?

Most auto insurance discounts apply regardless of the policy term length so finding as many discounts as possible equals long-term savings.

Auto insurance discounts can save you hundreds per year. However, some auto insurance policies won’t carry the same auto insurance discounts. How do auto insurance discounts work? The best way to show you how it works is through this list of auto insurance savings.

Auto Insurance Discounts Offered by the Top 10 Auto Insurance Companies
CompaniesAverage Annual RatesAnti-Theft Discount (up to 25% off)Defensive Driving Discount (up to 10% off)Further Education Discounts (up to 15% off)Annual Rates with Discount(s) Applied
American Family$3,443$861$344$516$1,722
Liberty Mutual$6,096$1,524$610$914$3,048
State Farm$3,268$817$327$490$1,634
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Each column shows how much you can save on auto insurance through each discount. You can slash auto insurance rates up to half. Some defensive driver discounts will be listed as safe driver auto insurance discounts.

You can start comparing auto insurance quotes online to find the company that best suits your needs. While you can call each individual company to find 12-month auto insurance, filling out one form online is the easiest and most efficient way to go.

Comparing auto insurance quotes will also help you find the cheapest rates. Each company will charge differently and offer different discounts. Make sure you shop around to get the best deal out there.

If you need to see what auto insurance companies offer 12-month policies right away, enter your ZIP in the free comparison tool below.

Frequently Asked Questions: Auto Insurance Companies Offering 12-Month Policies

We’ll answer commonly asked questions in the final section of the guide regarding what insurance companies offer 12-month policies. Also, we’ll recap some of the content you’ve learned. Visit our main page to learn more about auto insurance.

#1 – Does Progressive have 12-month policies?

Yes. Progressive customers can choose if they want a six-month policy or a 12-month policy. Just how many policies does Progressive have? There are a few coverage options available. Speak with an insurance agent to find the one that fits your needs.

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#2 – What is the cheapest auto insurance for full coverage?

USAA is the cheapest insurance company for full coverage. The second cheapest is GEICO. For non-standard coverage, consider The General auto insurance.

#3 – Does auto insurance go down after six months?

Yes. Six-month policies can receive a discount if the customer renews their auto insurance policy.

The longer you are with an insurance company, the more likely you are to see a drop in rates. That may not be as soon as six months, but it never hurts to check with your agent and see if any savings are available.

Keep in mind that traffic violations, accidents, and other factors may keep your six-month or annual auto insurance rates from going down.

#4 – What are the 10 best auto insurance companies?

The top 10 auto insurance companies are Allstate, American Family, Farmers, GEICO, Liberty Mutual, Nationwide, Progressive, State Farm, Travelers, and USAA.

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#5 – Does GEICO only do six-month policies?

Like Progressive, GEICO allows customers to choose which auto insurance policy is best for them.

#6 – What are the worst auto insurance companies?

The worst auto insurance companies are judged by the customers. Each experience is different, so you’ll get different responses on whether a company is the worst or the best.

#7 – What does “annual rate” mean for auto insurance?

The rate is what you pay the insurance company for your auto insurance coverage. Most insurance companies offer the option of paying the rate annually or every six months.

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