How a six-month auto insurance policy works. With six-month car insurance policies, you pay an agreed amount to cover your car for a fixed period of six months. Once that period ends, the policy will be renewed and the insurance provider will be able to re-evaluate your car insurance rates. If you take out a policy with a total of six months, you will be covered by the limits you have chosen at the agreed rate for six months.
After that period is over, the insurer will recalculate your rate and will change your rates accordingly. Remember that you must pay your bill in advance to get coverage, but the advance depends on your preferences and the insurance company's policies. In a monthly payment plan, you pay for the next month's coverage in advance. If you don't make a payment or pay late, you'll be left without insurance.
The insurer must charge the premium for your policy to be binding and up to date. Your car insurance policy won't be immediately canceled because you don't make a payment. Auto insurance companies are required by state law to give notice before canceling their policy. Depending on the state, you'll normally have 10 to 20 days.
Your company will notify you by mail or email before canceling your coverage. That's because most car insurance policies last six or 12 months, and most car insurance companies offer a discount (up to 20%) for paying the premium in full up front. A 6-month auto insurance policy could also benefit drivers who will soon pay off a car loan, as well as those who improve their credit. Some insurance companies still offer annual policies, along with a 6-month option, such as Liberty Mutual, USAA, Erie, The Hartford, The General, Infinity, Sfeco and Unique.
Six-month car insurance might be best if you have a traffic violation or some points on your license that will expire soon. When you receive an auto insurance quote, you can choose between a six-month policy or a 12-month policy. However, if you compare the price of your car insurance on a monthly basis, there might not be much difference between a six-month policy and a 12-month one. The length of the policies is specific to each company; some companies can only offer car insurance for six months, while others only offer 12-month terms (and some may give you the option to choose either one).
Buying a 12-month car insurance policy is better than buying a 6-month car insurance policy if you're a good driver with a clean driving record and the option is available to you. Most insurers offer payment plans, which means you can choose to pay your car insurance premium in monthly or one-time installments. A six-month auto insurance policy is renewed twice a year, while customers with annual car insurance can renew their policies every 12 months. A six-month auto insurance policy simply means that your policy is effective and is priced for six months before it is renewed.
Finally, it's worth noting that most auto insurance quotes are based on a six-month policy that is paid in full at the beginning of each period.