I assumed I had bought a year of cover and then a renewal notice arrived at month five with a rate about twelve percent higher. No claims, no tickets, same car, same address. Is the six month term standard practice and is there anything to be gained by asking for a twelve month one instead?
Six month auto terms are common in the US and it is not a trick aimed at you personally — it lets the insurer re-rate twice a year, and in a period where repair and parts costs have been climbing that has mostly meant increases regardless of your own record. A twelve month term locks the price for longer, which is genuinely worth something when rates are rising, but insurers can still non-renew you at the end and not every company offers both terms in every state. Ask yours what a twelve month version would cost and compare directly.
Ask them to break down what changed on the declarations page against the previous one. Sometimes it is the market, sometimes a discount silently dropped off.
So the increase is the market rather than my file. That is oddly reassuring and also more annoying.
Careful with the assumption that shorter always means worse. A six month term also means that if your circumstances improve — a shorter commute, a teenager coming off the policy, a rating factor changing — you get repriced downward sooner. I have had renewals go down twice on six month terms for exactly that reason, so I would not chase a twelve month lock purely for stability.
True, though most people can also request a mid-term recalculation when something material changes, so you do not have to wait for the term to end.
The habit that has saved me the most is shopping every renewal rather than every few years, and getting quotes from an independent broker as well as direct. Loyalty pricing works against you at most carriers, and the quotes on identical cover have varied by a lot more than twelve percent between companies for me. Take your current declarations page to whoever quotes so they are pricing the same limits, otherwise you are comparing a cheaper policy rather than a cheaper price.
@adjunct_life · 6mo ago
I let three renewals go through untouched because the increases were small each time. Adding them up later, the premium had risen by more than half against a competitor quote for the same cover. Twenty minutes at each renewal would have been the best paid twenty minutes of my year.
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