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Six-Month Car Insurance Policies

You're probably used to renewing your policy year after year without even knowing that some companies offer six-month policies as an alternative to yearly policies. While primarily designed for high-risk drivers, insurance companies also use them to entice customers to change carriers by offering rock bottom rates for the first six months.

Six-Month Car Insurance Policies

Six-month policies help insurance companies reduce risk by giving high-risk drivers shorter-term policies. A short policy term—one with a contract period where the requirements of the policy will not —can help these companies save money and risk by giving them additional opportunities each year to look at risk level posed by the driver and to adjust the rates up or down accordingly. They can also choose to non-renew sooner, instead of being tied to a twelve-month obligation.

Benefits to Insurance Companies

Although safe drivers are unlikely to incur any expenses for the insurer in six months, high-risk drivers are much more likely to have an accident. Insurers enjoy the benefit of a second look at a high-risk driver. If that driver, or anyone else listed to drive on the policy, has an accident or gets a speeding ticket, premiums can be adjusted upward.

Helpful for High-Risk Drivers

This can also benefit high-risk drivers. Those looking to improve their insurance rates can be careful to drive safely during the six-month period and may be able to secure a better rate in the following six months. Six-month policies are also helpful for new drivers who need to establish a good driving record in the first place.

Another benefit for high-risk drivers is the ability to split the yearly premium into smaller segments. Because insurers charge monthly installment fees, policyholders may be able to afford to pay the six-month premium fee in full more easily than a 12-month policy. This saves installment fees.

Good Drivers Benefit Too

Better drivers are generally better off choosing 12-month policies because they can be sure of a stable and affordable premium for the entire policy term. Although they may get an incredible deal on a six-month policy, it's unlikely that same rate will be applied to a renewal six-month term. There are some situations, however, when the 12-month policy offered at renewal will have an excellent rate. It might still be cheaper than going elsewhere.

Retirees May Prefer Six-Month Policies

Another group of consumers that can be helped by a six-month policy includes senior citizens or retirees who live in warmer climates during the winter months. Because the premium is often vastly different from one state to another, they enjoy lower premiums for six months out of the year, rather than paying the higher premium for 12-months in the state where the primary residence is located.

Save Money with Shorter Policy Terms

Money savers will like six month policies too because it lets them check premiums twice a year, giving them an extra shot at getting the best available premium. Shopping around is a great way to save money on everything you buy, so car insurance shouldn't be any different. Six-month policies let you surf for the best rates and be confident you are always paying only what you must for the cost of your car insurance.

Negotiate a Better Rate More Often

You may even find the insurance company you are leaving offering an additional discount to get you to stay. You can negotiate a better deal more easily when you are given more opportunities to shop.

Gain More Financial Flexibility

This bargaining power can be especially helpful if you run into season financial problems. Those who find themselves laid off in the winter may choose to only insure their cars in the summer months and to go without a car in winter. They may also use the car year round, but change the deductible for half the year. Six-month policies simply give drivers more financial flexibility and options.

Car insurance companies can differ widely in the policy details and in the premiums they charge drivers. By using an on-line quote comparison tool, drivers have a more convenient method of checking prices from several insurers. Enter your zip code in the box at the top of this page and get rates from several insurers to see how much you could save by going to a six-month policy.