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Are you considering a longer auto insurance policy for your vehicle? A 12-month policy can lock in your rate for a year. Finding out what auto insurance companies offer 12 month policies, and at what rates, is the first step toward finding the right policy for you.
Insurance Companies That Offer 12-Month Policies
Auto insurance typically comes in either six- or 12-month policies. Twelve-month policies are less common, so if you want one, you may need to specifically request it from the provider. The biggest advantage of a 12-month policy is the opportunity to lock in a lower rate. With a locked rate, your premium will not increase during the year. Here are several companies that offer 12-month insurance policies. According to The Zebra, they also offer the following average annual rates:
- Liberty Mutual: $1,538.
- USAA: $916.
- Erie: $2,312.
- MetLife: $1,798.
- The General: $3,739.
- Kemper Specialty: $3,395.
- Infinity: $3,918.
- Safeco: $2,542.
- Unique: $2,256.
When you opt for 12-month insurance, your rates are secured for a year. Depending on your driving record, this could be an advantage or a disadvantage. For example, if you’re in an accident, most insurance providers will increase your rates for up to three to five years. Even if this increase expires in the middle of the policy, you’ll be charged the higher rate until you renew your insurance policy. If you’re locked into a 12-month rate, then you’ll have to wait longer. However, some people prefer a 12-month policy because it avoids any unexpected increases.
For this same reason, most insurance companies encourage a six-month policy. This gives them the opportunity to re-evaluate and adjust prices every six months. Your insurance rate can increase with a six-month policy, even if you didn’t have any car accidents or receive any traffic violations during that time. Instead, premium increases can be due to other drivers. Each year, insurance companies evaluate their claims-to-revenue amount, and if they had a higher number of claims and paid out more, then they may increase rates across all drivers.
Factors That Affect Car Insurance Rates
Most drivers opt for a six-month policy because the rates tend to be similar compared to a 12-month policy. The cost of a 12-month policy is usually the same as a six-month policy multiplied by two. Other factors, however, do affect insurance rates, including:
- Credit history
- Driving record
- Number of miles driven
- Coverage level
- Marital status
Your specific insurance rates will vary depending on each of these factors. This means that while a 12-month policy may be ideal for one driver, it may be costlier to another. As always, it’s important to gather a few insurance quotes based on your information to choose the best one.
Disadvantages of a 12-Month Policy
When choosing any type of insurance policy, it’s always important to consider your insurance needs to choose the best one for you. While a 12-month policy may be ideal for some drivers, it’s important to be aware of the disadvantages:
- Difficult to find: Not all insurance providers offer 12-month policies. You may have to search to find one. You may have to be in a legacy program to qualify.
- Doesn’t always mean lower rates: 12-month policies do not automatically qualify you for lower rates. The insurance company will still factor in other factors, such as your age and driving record.
- Less flexible: If a car accident falls off your driving record early in the 12-month period, you might have to wait longer for a decreased rate.
- Less recalculation of rates: Six-month policies mean that your rates are re-calculated more frequently. Other factors that could change your rates include a milestone birthday, a credit score change, a paid-off vehicle, or a traffic violation falling off your record. With a 12-month policy, you’ll have to wait longer to take advantage of these factors that could decrease your insurance rate.
Additionally, if you’re unhappy with your insurance provider, you’ll have to wait longer to change providers than if you had a six-month policy. Otherwise, you could be subject to cancellation fines. Typically, according to Cheap Car Insurance Quotes, everything is the same between a six- and 12-month policy. In most cases, a 12-month policy will require full payment up front. This may not be a viable option for some people.
Also, some people may not be eligible for a 12-month auto insurance policy, such as a driver who is seeking a policy with a company they haven’t done business with before. Such a company may want to restrict a new customer to a six-month policy. Additionally, a 12-month policy may not be available in your state.
How to Get the Most Affordable 12-Month Policy
Fortunately, there are ways you can cut your car insurance rates. Keeping a clean driving record is one of the best ways to keep insurance costs low. Know your local and state traffic laws and avoid drinking and driving, as a DUI can be very costly. Practice safe driving so you can avoid the price increase in auto insurance that comes with a car accident.
Comparing price quotes among providers will also help you better evaluate your options. Keep in mind that, regardless of which length of insurance, or which insurance company you choose, you need to choose a coverage that meets your state’s minimums. Taking advantage of discounts is another good way to cut your costs. Check whether your insurance provider offers discounts, such as multi-vehicle and safe driver discounts, or the ability to bundle multiple discounts. Some insurance companies may also offer discounts the longer that you have been with them. When your policy is set to expire, you have the option to shop around and find a new policy.
A 12-month insurance policy enables you to lock in your rates for a year. While this may not be ideal for every driver, some drivers do prefer it. You may need to shop around to find a provider that offers it, while also ensuring that you meet the minimum policy requirements.
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