Buying Annual Auto Insurance: What You Need To Know in 2024
Many auto insurance companies offer 12-month policies, including Liberty Mutual and USAA. The cost of a 12-month auto insurance policy vs. paying monthly isn't much different, but rates will be locked in longer.
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Daniel Walker
Licensed Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
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UPDATED: Oct 29, 2024
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our auto insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different auto insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 29, 2024
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our auto insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different auto insurance companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Not all auto insurance companies offer a 12-month auto insurance policy term
- Two of the biggest companies that do offer 12-month auto insurance policies are Liberty Mutual and USAA
- A 12-month policy locks in your rate for a full year so that you won’t have a rate increase until that year is up
Most auto insurance companies offer 12-month policies, including Liberty Mutual and USAA. The cost of annual auto insurance coverages vs. monthly isn’t much different, but rates will be locked in longer.
How much auto insurance is a month depends on many factors, but the average auto insurance rate is $325/month.
You can save hundreds on auto insurance per year through policy discounts and factors that determine auto insurance. If you’ve been shopping for auto insurance, you’ve probably noticed that some auto insurance policies only last six months.
Which is better, annual car insurance vs. monthly? It can be hard to say, but with a six month car insurance policy, your rate may change as soon as your policy is over.
Continue reading through this guide to learn what insurance companies offer 12-month policies, what 12-month auto insurance rates look like, and how to buy auto insurance that’s right for you. You may find that a six month policy for car insurance is too short a time frame, and that a 12-month policy may be much better.
Do you need a 12-month auto insurance policy right now? Not a problem. Enter your ZIP above for 12-month auto insurance quotes from top companies today.
What auto insurance companies offer 12-month policies?
Most insurance companies offer six-month auto insurance policies. This allows them to reevaluate your policy often and make adjustments to your rate as needed.
Although it can be more difficult to find a 12-month auto insurance company, it’s not impossible. It’s becoming quite common for drivers to want a policy that lasts a full year rather than deal with having car insurance for only six months (read our “How long does an auto insurance policy last?” for more information). Here is a list of companies that offer 12-month auto insurance policies.
- Liberty Mutual
- USAA
- Erie
- The Hartford
- MetLife
- The General
- Infinity
- Kemper Specialty
- SAFECO
- Unique
Most auto insurance companies usually give you an option on how to manage your auto insurance policy in terms of duration. There is no difference in the coverage, just how long you are locked in. However, keep in mind that month-to-month auto insurance is hardly offered, with companies preferring a mid-range amount of time. This is why six months is ideal.
Some companies, like Aviva, only offer 12-month policies to certain customers. In order to get a year-long policy, you have to have a clean driving record for three years. Otherwise, the company will only offer you a six-month policy.
Geico has recently adopted six-month auto insurance policies, allowing customers to renew after the six-month period is over.
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How can you get cheap auto insurance rates on 12-month policies?
The keys to cheap auto insurance are policy discounts and factors that determine auto insurance. Without policy discounts, your auto insurance rates could be more expensive than anticipated.
How much is auto insurance a month? Why is auto insurance expensive? Auto insurance is calculated by several factors, such as:
- Age
- Auto Insurance Company
- Gender (outlawed in some states)
- Marital Status
- Credit History
- Driving Record
- Commute Mileage (number of miles you’re estimated to drive within the policy)
- Coverage Level
- Vehicle Insurance Quote
- ZIP Code
Depending on these factors, your auto insurance can be cheaper than average or more expensive. Let’s take a look at the average six-month rates vs. 12-month car insurance policies of the top 10 auto insurance companies.
How much does 12-month auto insurance cost?
The table below compares six-month vs. 12-month auto insurance policies.
Average Auto Insurance Rates of the Top 10 Auto Insurance Companies
| Companies | Average Annual Rates | Average Six-Month Rates | Average Monthly Rates |
|---|---|---|---|
| Allstate | $4,898 | $2,449 | $408 |
| American Family | $3,443 | $1,722 | $287 |
| Farmers | $4,189 | $2,094 | $349 |
| Geico | $3,216 | $1,608 | $268 |
| Liberty Mutual | $6,096 | $3,048 | $508 |
| Nationwide | $3,447 | $1,723 | $287 |
| Progressive | $4,044 | $2,022 | $337 |
| State Farm | $3,268 | $1,634 | $272 |
| Travelers | $4,445 | $2,222 | $370 |
| USAA | $2,542 | $1,271 | $212 |
Read more:
We’ve narrowed down the auto insurance rates to monthly rates. This shows how much your budget can be affected by auto insurance. USAA auto insurance is the cheapest auto insurance.
However, USAA is military and veterans auto insurance, only available to members of the U.S. Armed Forces and their immediate families.
Geico auto insurance quotes are the second cheapest, but Progressive auto insurance is $800 more expensive.
So, which policy duration is cheaper?
The six-month car insurance rates are annual rates cut in half. There is usually no price difference on rates between a six-month policy and a 12-month policy.
Some auto insurance companies will offer a discount when you renew your auto insurance. Affordable 12-month auto insurance is available, as is cheap six-month auto insurance, but 12-month rates are locked in longer.
What are the pros and cons of 12-month auto insurance?
As with any big financial decision, it’s important to look at both sides of the issue.
Keep reading as we break down reasons to buy 12-month auto insurance and why it might not be the best option for you.
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What are the benefits of a 12-month auto insurance policy?
The main benefit of a 12-month auto insurance policy is that your rate is locked in for the entire year. There aren’t any surprises that may pop up during your policy.
Some auto insurance companies may offer an extra discount for locking in a longer policy, but you would need to be a great driver and have had coverage with that company for a long time. Not every company offers this possibility.
What are the benefits of a six month auto insurance policy?
A six-month policy offers more flexibility for both sides.
For example, if you have an accident or ticket on your record, your rates will go down once those are off your driving record after three to five years.
If the infraction falls off six months into your 12-month policy, you have to pay that higher rate for six extra months. With a six-month policy, you would get a lower rate immediately.
The same is true for the auto insurance company. If you receive a ticket, it will raise your rates much faster.
Another benefit to a six-month policy is that you can compare quotes more often to look for a lower auto insurance rate.
Read more: Does auto insurance go down after the first year?
Should you buy 12-month auto insurance?
That is completely up to you.
There is usually no rate difference between a 12-month policy and a six-month policy, and a longer policy can be harder to find.
However, if your primary goal is locking in a low rate for as long as possible, it might be worth the trouble to find a 12-month policy.
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What is the market share of the top 10 auto insurance companies?
Market share is the percentage of all of the available customers a specific company has in a specific industry. Auto insurance companies are ranked based on market share. Market share can reflect the number of direct premiums and loss ratios.
Here are the top 10 auto insurance companies by market share.
Top 10 U.S. Auto Insurance Companies by Market Share
| Rank | Companies | Direct Premiums Written | Loss Ratios | Market Shares |
|---|---|---|---|---|
| 1 | State Farm | $41,963,578,000 | 63 | 17.01 |
| 2 | Geico | $33,075,434,000 | 71 | 13.41 |
| 3 | Progressive | $27,058,768,000 | 62 | 10.97 |
| 4 | Allstate | $22,663,214,000 | 56 | 9.19 |
| 5 | USAA | $14,467,936,000 | 77 | 5.87 |
| 6 | Liberty Mutual | $11,776,654,000 | 62 | 4.77 |
| 7 | Farmers | $10,496,476,000 | 61 | 4.26 |
| 8 | Nationwide | $6,726,799,000 | 58 | 2.73 |
| 9 | Travelers | $4,697,743,000 | 60 | 1.9 |
| 10 | American Family | $4,687,909,000 | 69 | 1.9 |
Geico is ranked second despite having one of the cheapest auto insurance rates. Although cheap auto insurance rates are popular among some customers, financial performance and company size make a difference in a company’s rank.
Read more: State Farm Auto Insurance Review: Should you buy?
Why are auto insurance company ratings important?
The thread and rubber of a good auto insurance company are auto insurance ratings. People search for the best deals, but people also search for good reviews.
Bad reviews can turn a customer away. According to the Insurance Information Institute, they’re judged by customer response and financial strength. One of the top financial strength agencies is A.M. Best.
Each year, auto insurance companies participate in A.M. Best ratings to keep their financial performance ratings up to date. Another method to review an auto insurance company’s performance is through the National Association of Insurance Commissioners (NAIC) complaint index.
The NAIC Complaint Index measures the rate of complaints within a year.
Let’s break down the ratings of the top 10 auto insurance companies.
A.M. Best and NAIC Complaint Index for Top Auto Insurance Companies
| Companies | A.M. Best Rating | NAIC Complaint Index |
|---|---|---|
| Allstate | A+ | 0.36 |
| American Family | A | 1.36 |
| Farmers | A | 1.25 |
| Geico | A++ | 2.29 |
| Liberty Mutual | A | 3.85 |
| Nationwide | A | 1.7 |
| Progressive | A+ | 0.84 |
| State Farm | A++ | 1.14 |
| Travelers | A++ | 0 |
| USAA | A++ | 1.86 |
Read more: How To Cancel Geico Auto Insurance
According to the A.M. Best rating guide, the best financial strength ratings are from “A” to “A++”. The “A” ratings are assigned to companies who show excellent or superior ability to meet obligations.
The NAIC Complaint Index shows the rate at which the companies received complaints from their customers. Anything above one is above average. Allstate, Progressive, and Travelers are the only auto insurance companies with an NAIC Complaint Index under one.
How can you save money on 12-month auto insurance?
There are many different ways to save on your auto insurance.
Earlier we talked about the factors that affect your auto insurance rates. Keeping a clean driving record and a good credit score can go a long way in lowering your rates.
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What auto insurance discounts are offered on 12-month auto policies?
Most auto insurance discounts apply regardless of the policy term length so finding as many discounts as possible equals long-term savings.
Auto insurance discounts can save you hundreds per year. However, some auto insurance policies won’t carry the same auto insurance discounts. How do auto insurance discounts work? The best way to show you how it works is through this list of auto insurance savings.
Auto Insurance Discounts Offered by the Top 10 Auto Insurance Companies
| Discount Name | Allstate | American Family | Farmers | Geico | Liberty Mutual | Nationwide | Progressive | State Farm | Travelers | USAA |
|---|---|---|---|---|---|---|---|---|---|---|
| Adaptive Cruise Control | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Adaptive Headlights | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Anti-lock Brakes | 10% | ✓ | ✓ | 5% | 5% | 5% | ✓ | 5% | ||
| Anti-Theft | 10% | ✓ | 23% | 20% | 25% | ✓ | 15% | |||
| Claim Free | 35% | ✓ | ✓ | 26% | ✓ | 10% | ✓ | 15% | 23% | 12% |
| Continuous Coverage | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% | ✓ | ||
| Daytime Running Lights | 2% | ✓ | 3% | 5% | 5% | ✓ | ✓ | |||
| Defensive Driver | 10% | 10% | ✓ | ✓ | 10% | 5% | 10% | 5% | 10% | 3% |
| Distant Student | 35% | ✓ | ✓ | ✓ | ✓ | 10% | ✓ | 7% | ||
| Driver's Ed | 10% | ✓ | ✓ | ✓ | 10% | ✓ | 10% | 15% | 8% | 3% |
| Driving Device/App | 20% | 40% | ✓ | ✓ | 30% | 40% | 20% | 50% | 30% | 5% |
| Early Signing | 10% | ✓ | ✓ | ✓ | ✓ | 8% | ✓ | ✓ | 10% | 12% |
| Electronic Stability Control | 2% | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | |
| Emergency Deployment | ✓ | ✓ | ✓ | 25% | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Engaged Couple | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Family Legacy | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 10% |
| Family Plan | ✓ | ✓ | ✓ | ✓ | ✓ | 25% | ✓ | ✓ | ✓ | ✓ |
| Farm Vehicle | 10% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Fast 5 | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Federal Employee | ✓ | ✓ | 12% | 10% | ✓ | ✓ | ✓ | ✓ | ||
| Forward Collision Warning | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | |
| Full Payment | 10% | ✓ | ✓ | $50 | ✓ | ✓ | ✓ | 8% | ✓ | |
| Further Education | ✓ | ✓ | 10% | 15% | ✓ | ✓ | ||||
| Garaging/Storing | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 90% | ||
| Good Credit | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
| Good Student | 20% | ✓ | 15% | 23% | 10% | ✓ | 25% | 8% | 3% | |
| Green Vehicle | 10% | ✓ | 5% | ✓ | 10% | ✓ | ✓ | ✓ | 10% | ✓ |
| Homeowner | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | 3% | 5% | ✓ | |
| Lane Departure Warning | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Life Insurance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Low Mileage | ✓ | ✓ | ✓ | 30% | ||||||
| Loyalty | ✓ | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | |
| Married | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||||
| Membership/Group | ✓ | ✓ | ✓ | 10% | 7% | ✓ | ✓ | |||
| Military | ✓ | ✓ | 15% | 4% | ✓ | ✓ | ||||
| Military Garaging | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% |
| Multiple Drivers | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Multiple Policies | 10% | 29% | ✓ | 10% | 20% | 10% | 12% | 17% | 13% | |
| Multiple Vehicles | ✓ | ✓ | 25% | 10% | 20% | 10% | 20% | 8% | ||
| New Address | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| New Customer/New Plan | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| New Graduate | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| New Vehicle | 30% | ✓ | ✓ | 15% | ✓ | 40% | 10% | 12% | ||
| Newly Licensed | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Newlyweds | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Non-Smoker/Non-Drinker | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Occasional Operator | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Occupation | ✓ | 10% | 15% | ✓ | ✓ | ✓ | ||||
| On-Time Payments | 5% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 15% | ✓ | |
| Online Shopper | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | 7% | ✓ | ✓ | ✓ |
| Paperless Documents | 10% | ✓ | ✓ | ✓ | 5% | $50 | ✓ | ✓ | ✓ | |
| Paperless/Auto Billing | 5% | ✓ | ✓ | ✓ | $30 | ✓ | $20 | 3% | 3% | |
| Passive Restraint | 30% | 30% | 40% | 20% | ✓ | 40% | ||||
| Recent Retirees | ✓ | ✓ | ✓ | ✓ | 4% | ✓ | ✓ | ✓ | ✓ | ✓ |
| Renter | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Roadside Assistance | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Safe Driver | 45% | ✓ | 15% | ✓ | 35% | 31% | 15% | 23% | 12% | |
| Seat Belt Use | ✓ | ✓ | ✓ | 15% | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Senior Driver | 10% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Stable Residence | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | |
| Students & Alumni | ✓ | ✓ | ✓ | 10% | 7% | ✓ | ✓ | ✓ | ||
| Switching Provider | ✓ | ✓ | 10% | ✓ | ✓ | ✓ | ✓ | |||
| Utility Vehicle | 15% | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ||
| Vehicle Recovery | 10% | ✓ | ✓ | 15% | 35% | 25% | ✓ | 5% | ||
| VIN Etching | ✓ | ✓ | ✓ | ✓ | 5% | ✓ | ✓ | |||
| Volunteer | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Young Driver | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | $75 |
Each column shows how much you can save on auto insurance through each discount. You can slash auto insurance rates up to half. Some defensive driver discounts will be listed as safe driver auto insurance discounts.
You can start comparing auto insurance quotes online to find the company that best suits your needs. While you can call each individual company to find 12-month auto insurance, filling out one form online is the easiest and most efficient way to go.
Comparing auto insurance quotes will also help you find the cheapest rates. Each company will charge differently and offer different discounts. Make sure you shop around to get the best deal out there.
If you need to see what auto insurance companies offer 12-month policies right away, enter your ZIP in the free comparison tool below.
Frequently Asked Questions
What is annual auto insurance?
Annual auto insurance refers to an insurance policy that provides coverage for your vehicle for a period of one year. It is a common type of insurance policy that offers continuous coverage throughout the year without the need for monthly or quarterly renewals.Why should I consider buying annual auto insurance?
Why should I consider buying Annual Auto Isurance?
There are several advantages to buying Annual Auto Insurance:
- Convenience: With an annual policy, you don’t have to worry about renewing your insurance every month or quarter. It provides continuous coverage for an entire year, saving you time and effort.
- Potential cost savings: In many cases, buying annual auto insurance can be more cost-effective compared to shorter-term policies. Insurance providers often offer discounts and incentives for customers who commit to longer-term coverage.
- Protection against rate increases: By locking in your insurance rate for a year, you can avoid any potential rate increases that may occur during that time. This can provide financial stability and predictability.
- Compliance with legal requirements: Auto insurance is typically a legal requirement in most jurisdictions. By purchasing an annual policy, you ensure continuous compliance with the law throughout the year.
How can I buy annual auto insurance?
To buy annual auto insurance, you can follow these steps:
- Determine your coverage needs: Assess the type and amount of coverage you require for your vehicle. Consider factors such as liability coverage, comprehensive coverage, collision coverage, and any additional coverage options you may need.
- Gather information: Prepare the necessary information for obtaining insurance quotes. This includes details about your vehicle, your driving history, and any other relevant personal information.
- Obtain multiple quotes: Shop around and obtain quotes from different insurance providers. This allows you to compare prices, coverage options, and discounts offered by different companies.
- Evaluate coverage and cost: Review the coverage details and costs of each insurance quote. Consider the level of coverage provided, deductibles, limits, and any additional features or benefits offered.
- Choose a reputable insurer: Select an insurance company with a good reputation for customer service and claims handling. Read reviews and research their financial stability.
- Finalize the purchase: Once you have chosen an insurance provider, contact them to finalize the purchase. Provide the necessary information, make payment arrangements, and review the policy terms and conditions before signing.
Can I cancel my Annual Auto Insurance policy?
Yes, you can typically cancel your annual auto insurance policy. However, the process and any associated fees or penalties may vary depending on the insurance provider and the specific terms of your policy. It’s important to review the cancellation policy outlined in your insurance agreement or contact your insurance provider directly to understand the process and any potential costs involved.
What happens if I need to make changes to my annual auto insurance policy?
If you need to make changes to your annual auto insurance policy, such as adding or removing a vehicle, updating your address, or adjusting your coverage limits, you should contact your insurance provider directly. They will guide you through the process and provide you with the necessary forms or documentation to make the requested changes. Keep in mind that some changes may result in adjustments to your premium.
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Daniel Walker
Licensed Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.