Written by Q: Is there a 12 month policy term available for car insurance or only 6 months?
AIS Answer: The industry standard term for personal automobile insurance policies is 6 months. In the instance of commercial auto insurance (business insurance) policies can be for 12 month terms, same for motorcycle insurance.
With personal auto insurance policies the 6 month term was likely put into effect to accurately re-evaluate the customers driving record and make necessary revisions to the policy and/or premium.
Depending on your situation, a 6 month policy can be a very good thing. If you’ve had a speeding ticket or other driving infraction due to drop off your motor vehicle history report after 3 years that fell directly in the middle of your 6 month cycle, on the next renewal when your insurance company runs your Motor Vehicle Report they would see your ticket/infraction had passed the 3 year mark and your rates could go lower. If you had a 12 month policy you would be locked into that set rate for 12 months.
However. The opposite also applies. If you’ve recently received a ticket/violation during your 6 month policy (or before your policy if it was still pending) that will be enforced during the policy term, the next review of your driving history would show the ticket/infraction and your rates may go up. If you had a 12 month auto insurance policy it’s likely you would have a locked in rate for the entire 12 months with no changes.
6 month policies make much more sense. Who would want to get locked in to a rate that’s high? When you’re younger you can’t wait until the next renewal so your rates go lower. Imagine waiting 12 months…no thanks.
I would have loved to lock in rates last year before my speeding tickets – that sucked.
I think Massachusetts has a 12 month policy term…not sure though.