12-Month Car Insurance: Pros and Cons
With an annual policy, you'll see your rates stay consistent for a year at a time. However, not all insurers offer this policy length for auto insurance.
Can you buy a 12-month car insurance policy?
Yes, you can buy a 12-month car insurance policy, but it may take a bit more searching to find the right company that offers it; the typical policy length for car insurance is six months.
In theory, an annual policy secures your car insurance rates and keeps your insurer from raising your premium for an entire year. But is it the best option for you? Well, it depends on your driving record, personal details, and insurance company.
| Pros of an annual policy | Cons of an annual policy | |
|---|---|---|
| Possible paid-in-full discount | Rate changes might feel higher | |
| Rate consistency for a year | Missed savings if rating factors improve | |
| "Set it and forget it" approach | Harder to find annual policies |
How much does an annual auto insurance policy cost?
If a company does offer annual policies, you'll still need to meet eligibility requirements. Below are estimated prices for 12-month car insurance policies from well-known insurers (learn about our methodology). Remember that these rates are averages, so depending on your exact location and driving record, your premium will vary.
We've created the tables below to help you get a good idea of what year-long policies may cost from top insurance companies.
| Company | Avg. Annual Premium |
|---|---|
| Erie | $1,293 |
| USAA | $1,365 |
| Infinity | $1,771 |
| Progressive | $1,882 |
| MetLife | $2,212 |
| The Hartford | $2,407 |
| Company | Avg. Annual Premium |
|---|---|
| USAA | $434 |
| Erie | $504 |
| Infinity | $565 |
| Progressive | $692 |
| The Hartford | $735 |
| MetLife | $848 |
The Zebra’s Dynamic Insurance Rating Tool data methodology
The Zebra’s Dynamic Insurance Rating Tool for home and auto insurance rates utilizes the latest ZIP code-level rate filings from across the U.S., sourced from Quadrant Information Services and S&P Global. These filings, typically updated annually or biennially by insurers, are verified through Quadrant’s QA process and then integrated into The Zebra’s estimator.
The displayed rates are based on a dynamic home and auto profile designed to reflect the content of the page. This profile is tailored to match specific factors such as age, location, and coverage level, which are adjusted based on the page content to show how these variables can impact premiums.
For a comprehensive understanding, see our detailed methodology.
Which insurance companies offer 12-month policies?
Twelve-month car insurance policies aren't very common. We suggest you specifically ask for an annual policy duration during your quoting process, otherwise, most companies will default to a policy period of six months.
Below are some car insurance companies that offer 12-month policies.
There are some instances in which you might not be eligible for a 12-month policy from these insurance companies: if your state does not offer the program, or if you’re not eligible for coverage from the company — USAA only accepts military members and their families, while The Hartford only offers coverage for drivers over the age of 55.
Benefits of 12-month auto insurance
The primary benefit of an annual car insurance policy is that your rate is locked for an entire year, which is reassuring to some drivers. On a standard six-month policy, rates are revised every six months. Even if you didn’t have an accident or add or change vehicles or drivers, your rate can still increase due to a rate revision.
Every year, an insurance company reviews its claims-to-revenue ratio to determine its premiums going forward. If your insurance company paid out more in claims than it earned in revenue during the previous period, it could charge higher premiums to offset this deficit.
Q: But what is a rate revision?
A: A rate revision is when your insurer adjusts your premium at the end of a policy period. Insurers compare the previous year's claim payouts to their revenue and adjust prices accordingly. If the previous period resulted in a deficit, rates may be increased for the next policy period. You may see a lower rate issued, but this is fairly rare.
If you have a six-month insurance policy, you can see a revision twice per year (when you renew your policy). If you've opted for a 12-month policy, you can avoid a rate revision (other than changes you've made personally) until the following year.
What are the cons of an annual car insurance policy?
The decision is ultimately up to you, but we're here to help you evaluate both the advantages as well as the disadvantages. Let's take a look at the potential downsides of locking in your insurance pricing for 12 months so you can make the most educated decision possible.
Many major insurance companies don't offer annual auto policies. Six-month policies are the standard in the insurance world since they allow insurance companies to recalculate rates more often. Some popular companies might offer yearly term lengths via their legacy policies, but you'll want to confirm this with your insurance company (or others you're considering) directly.
Whether this is truly a benefit depends on your situation. For example, accidents will usually cause drivers to be charged higher rates for three to five years afterward. Even if your violation penalty period expires in the middle of your policy, your insurance company won't remove this violation from your premium until your term is over.
In this scenario, you'd end up paying more for insurance coverage because of your lengthy policy. You could contact your insurance company and ask them to “re-pull” your rate for the violation to no longer be counted on your current policy, but that might not always work.
Although your rates are locked in for a full year, that doesn’t automatically equate to a lower insurance premium. Your best bet for finding an affordable premium is to compare as many auto insurance companies as possible, finding quotes for six-month and 12-month policies.
Real experience
One of The Zebra's employees, Meredith, spoke about her experience opting for 12-month policies. She currently has a 12-month policy through Progressive but has also gotten annual policies with Amica in the past.
"I like to lock in the price since it always seems to go up. Plus, choosing the 12-month policy means I only have to check car insurance off my list once per year, especially since I choose to take advantage of the pay-in-full discount."
Meredith Gulledge — Real-life 12-month policyholder
What type of driver could benefit from a 12-month policy?
Not everyone wants a year-long auto insurance policy, and many folks are fine with renewing their insurance every six months. But a 12-month car insurance policy might be right for you if:
- You don't want to deal with renewing or shopping around more than once per year
- Your rating factors generally remain consistent and you don't expect big changes
- You prefer to avoid monthly payments
- You budget for large expenses in advance
- You like to pay a year's premium at once and potentially qualify for a discount
What other factors affect my car insurance rate?
According to our data, about 39% of drivers say they're paying too much for auto insurance in 2024. As you've read above, changing the duration of your policy period will only affect what you pay for a temporary period — until a rate revision occurs. If you want to reduce what you pay in car insurance, it's important to understand other factors in the rate calculation. Some of these include:
- Age
- Gender
- Location
- Credit score
- Driving history
- Claims history
- Marital status
- Annual mileage
If you're looking to save money in the long term, we suggest focusing on some of the factors you can control, such as improving your credit score and driving safely.
Find affordable car insurance today!
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.