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Drivers can choose to pay their insurance premiums monthly, every 3 months, every 6 months, or annually. Insurance companies seem to prefer 6-months long policies.
Some insurance companies offer only 6-months long policies. For drivers, it's in their best interest to purchase a year-long policy. 12-months long policies will help drivers lock in a cheaper car insurance premium for a longer period. The insurance rates are constantly rising, so it's better for drivers to lock on a cheaper policy for a longer period of time, than having to pay for increased rates every 6 months.
Insurance companies offer 6-months polices for two main reasons. Both of these reasons are related to money. Insurance companies set rates, and will try to sell as many policies as possible, and then will wait for a period of several years to collect financial data and see if they are profitable. If insurers charge too little on their policies, they will become unprofitable. If they charge too much, they will sell fewer policies.
For insurance companies that sell only 6 months long policies, it's easier to change the insurance rates if they realize they charge too little on their policies. They don't have to wait for a whole year to change the rates of the policyholders. They can do that every 6 months.
Also, insurers will customize the policies easier. Insurers will find out faster about the negative factors that influence the insurance premiums of a policyholder and will increase his rates immediately.
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