July 28, 2010

Why 6 Month Policies Are Better Than 1 Year Policies

It may be surprising to discover while researching auto insurance quotes that many insurance companies now offer car insurance policies for both six and twelve month options. What is the benefit to choosing a six month auto insurance quote over a twelve month policy option? Understanding how insurance companies assess their own potential for risk and return, will help you to make the best decision. There are many reasons why an insurance company may choose to offer a six versus a twelve month auto insurance quote option. Understanding how insurance companies assess risk will help you to determine why choosing a shorter term, six month policy may turn out to be the best decision price wise in the long run.

Insurance companies understand that their risk factor comes into play when assessing whether they are likely to face claim payouts in the future from approving a prospective policyholder's insurance application. So if you are an excellent driver with a clean or even spotless driving record, if you are the type of driver who takes driver education because you enjoy the refresher rather than to wipe yet another ticket off your driving record, then you can benefit greatly from purchasing a shorter term insurance policy. Often you can get discounts for purchasing a six month policy in its entirety rather than paying in monthly premium installments. While a full twelve month lump sum payment may not be affordable, six months most likely can be. Especially if you ensure that the insurance company is applying all of your applicable discounts to get you the best rate.

If you are an excellent driver, and you understand that one primary motivation an insurer has for offering auto insurance quotes with a six month policy period is to be able to reevaluate the policyholder's driving record more frequently, you may even earn yourself a rate reduction for your excellent driving record during the second half of the year. This is a bonus-already you are able to save significantly by purchasing a shorter term policy and paying in full rather than monthly, but now your rate just went down further for good behavior on the road.

When it comes to choosing a six month auto insurance quote over the more traditional twelve month auto insurance quote, nothing says savings to an excellent driver like shorter term policy periods. It will be important to gather a variety of quotes from different insurers to be able to best evaluate which company's six month policy is the best one for you and your family, but one thing is clear-six months can be a winning lottery ticket for a good driver with a mind to save money.