# Why is car insurance paid semi-annually? **URL:** \ **Category:** Factual Questions\ **Created:** [July 9, 2004, 1:27am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203 "2004-07-09T01:27:57Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![chique](https://avatars.discourse-cdn.com/v4/letter/c/4491bb/32.png) [@chique](https://boards.straightdope.com/u/chique)\ **Post date:** [July 9, 2004, 1:27am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/1 "2004-07-09T01:27:57Z")
My apologies if this has been done before but I didn’t see anything in my search. All of my expenses - rent, telephone, internet, electric - are billed monthly. Except for car insurance, which must be paid every six months\*. Who on earth decided that was a good idea, and why? \*To be fair, I have arrangements with my car insurance company to make monthly payments, but it’s still a six-month policy. ---
**Author:** ![Richard\_Pearse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/richard_pearse/32/13144_2.png) [@Richard\_Pearse](https://boards.straightdope.com/u/Richard_Pearse)\ **Post date:** [July 9, 2004, 1:54am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/2 "2004-07-09T01:54:35Z")
I don’t know. My insurance is annual, but then I don’t live “East of Lake Wobegone”. Also, my power is quarterly. ---
**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\ **Post date:** [July 9, 2004, 1:55am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/3 "2004-07-09T01:55:50Z")
> [@](#): > > rent, telephone, internet, electric Telephone, electric and, depending on your ISP, internet vary in cost based on usage so there’s really no convenient way to do annual or semi-annual billing. Rent/mortgage is usually such a large expense that most people would be unable to pay any more than one month of it at a time. Car insurance falls somewhere in the middle. It doesn’t vary by month and it usually isn’t so much that a person can’t afford to pay half of it at a shot. ---
**Author:** ![Mr.Blue\_Sky](https://avatars.discourse-cdn.com/v4/letter/m/d26b3c/32.png) [@Mr.Blue\_Sky](https://boards.straightdope.com/u/Mr.Blue_Sky)\ **Post date:** [July 9, 2004, 2:02am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/4 "2004-07-09T02:02:10Z")
I asked this question some time ago and was told that one year policies would be in violation of state (Georgia) law. ---
**Author:** ![missbunny](https://avatars.discourse-cdn.com/v4/letter/m/76d3ee/32.png) [@missbunny](https://boards.straightdope.com/u/missbunny)\ **Post date:** [July 9, 2004, 2:11am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/5 "2004-07-09T02:11:06Z")
I live in MA and my policy is for 1 year - July 1 to July 1. I do my boss’s insurance for his cars in three different states (FL, RI, and MA) and they are all 6-month policies - even the MA one. Different insurance company than the one I have, though. ---
**Author:** ![missbunny](https://avatars.discourse-cdn.com/v4/letter/m/76d3ee/32.png) [@missbunny](https://boards.straightdope.com/u/missbunny)\ **Post date:** [July 9, 2004, 2:16am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/6 "2004-07-09T02:16:08Z")
I live in MA and my policy is for 1 year - July 1 to July 1. I do my boss’s insurance for his cars in three different states (FL, RI, and MA) and they are all 6-month policies - even the MA one. Different insurance company than the one I have, though. ---
**Author:** ![MLS](https://avatars.discourse-cdn.com/v4/letter/m/919ad9/32.png) [@MLS](https://boards.straightdope.com/u/MLS)\ **Post date:** [July 9, 2004, 2:18am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/7 "2004-07-09T02:18:27Z")
I live in NJ. We have annual policies and have the option of paying the premium in installments over 8 months. At any time I can pay ahead or pay the whole thing. I can’t imagine why there would be any kind of law saying a particular contract has to be for 6 months. ---
**Author:** ![danceswithcats](https://avatars.discourse-cdn.com/v4/letter/d/9e8a1a/32.png) [@danceswithcats](https://boards.straightdope.com/u/danceswithcats)\ **Post date:** [July 9, 2004, 2:25am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/8 "2004-07-09T02:25:12Z")
I’m in PA, and appreciate being raped only twice per year. ---
**Author:** ![chique](https://avatars.discourse-cdn.com/v4/letter/c/4491bb/32.png) [@chique](https://boards.straightdope.com/u/chique)\ **Post date:** [July 9, 2004, 2:34am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/9 "2004-07-09T02:34:04Z")
> [@MLS](#): > > I can’t imagine why there would be any kind of law saying a particular contract has to be for 6 months. Oh, I don’t think there’s a law of any sort; just custom. Everyone I know pays car insurance semi-annually, but from the comments I see here that could just be a Minnesota thing. And I’m not talking about the length of a policy, either - just payment arrangements. Why pay for a policy, as you do, over eight months, rather than 12 monthly payments? ---
**Author:** ![MLS](https://avatars.discourse-cdn.com/v4/letter/m/919ad9/32.png) [@MLS](https://boards.straightdope.com/u/MLS)\ **Post date:** [July 9, 2004, 2:44am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/10 "2004-07-09T02:44:52Z")
> [@chique](#): > > Oh, I don’t think there’s a law of any sort; just custom. Everyone I know pays car insurance semi-annually, but from the comments I see here that could just be a Minnesota thing. > > And I’m not talking about the length of a policy, either - just payment arrangements. Why pay for a policy, as you do, over eight months, rather than 12 monthly payments? Those are just the options my company offers. Each month’s payment has a $3 service fee added. I can’t take any MORE than 8 (or maybe it’s 9) months to pay, but if I want to I can pay it all at once and have no service fee. It’s kinda nice at the end of the policy year to have some months with no payments to make. I am guessing that the company finds it more profitable to do it that way. I have no complaints if they are more profitable because at the end of the year they give back a bonus to all policyholders based on the year’s profits. So in addition to having the lowest rates in NJ, I get a Christmas present of a few hundred dollars every year. The company is NJ Manufacturer’s and you can’t get their prime insurance unless you are accident- and ticket-free for 3 years, have no teenagers in the house, and your employer is a member of a particular organization. ---
**Author:** ![SmackFu](https://avatars.discourse-cdn.com/v4/letter/s/53a042/32.png) [@SmackFu](https://boards.straightdope.com/u/SmackFu)\ **Post date:** [July 9, 2004, 2:56am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/11 "2004-07-09T02:56:16Z")
What’s interesting is that I have my car and renter’s insurance through the same carrier, and the car is semi-annual and the renter’s is annual. ---
**Author:** ![vivalostwages](https://avatars.discourse-cdn.com/v4/letter/v/d07c76/32.png) [@vivalostwages](https://boards.straightdope.com/u/vivalostwages)\ **Post date:** [July 9, 2004, 6:18am UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/12 "2004-07-09T06:18:55Z")
Hmmmm…Triple A offers me the option of paying monthly or less often, so I just pay up the whole thing for a year so I don’t have to think about it. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [July 9, 2004, 12:42pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/13 "2004-07-09T12:42:31Z")
Likewise I have AAA. You can get either a 6-month policy or a 12-month policy. I get the 12-monther, and pay it all at once. I used to get the six-monther when I didn’t know there was a 12-month policy available. But in both policy terms, you can take the option to pay for a certain number of months – I think five months and eight months, with a $3.00 for each month you choose to make a payment. ---
**Author:** ![Colophon](https://avatars.discourse-cdn.com/v4/letter/c/f05b48/32.png) [@Colophon](https://boards.straightdope.com/u/Colophon)\ **Post date:** [July 9, 2004, 1:53pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/14 "2004-07-09T13:53:50Z")
More anecdata, from the right side of the pond… car insurance is usually annual, although mine is 10 months (“bonus accelerator” they call it - you earn one year’s no-claims bonus in 10 months, plus of course they get the benefit that you are comparing their price for 10 months’ cover with rivals’ prices for a year… :rolleyes: ) Power, water and telephone bills are quarterly, generally. ---
**Author:** ![badmana](https://avatars.discourse-cdn.com/v4/letter/b/977dab/32.png) [@badmana](https://boards.straightdope.com/u/badmana)\ **Post date:** [July 9, 2004, 1:59pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/15 "2004-07-09T13:59:52Z")
I pay monthly off my CC (air miles). I don’t pay any service charge but my insurance renews every 90 days. It’s both a good and bad thing, as my insurance goes down randomly throughout the year, but will go up if I get a ticket rather quickly 😃 ---
**Author:** ![NotQuiteAYinzer](https://avatars.discourse-cdn.com/v4/letter/n/73ab20/32.png) [@NotQuiteAYinzer](https://boards.straightdope.com/u/NotQuiteAYinzer)\ **Post date:** [July 9, 2004, 2:06pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/16 "2004-07-09T14:06:14Z")
My policy renews every year, and I make payments monthly all year for it. I could pay it off sooner or all at once and it’d be cheaper, but the money thing doesn’t quite work out that way right now. Other people I know have 6-month policies; it’s just a matter of personal preference. If you maintain a clean driving record I doubt it matters much: X dollars twice a year vs. 2X dollars once a year. ---
**Author:** ![vetbridge](https://avatars.discourse-cdn.com/v4/letter/v/b5e925/32.png) [@vetbridge](https://boards.straightdope.com/u/vetbridge)\ **Post date:** [July 9, 2004, 5:55pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/17 "2004-07-09T17:55:34Z")
> [@danceswithcats](#): > > I’m in PA, and appreciate being raped only twice per year. I am also in PA. My car insurance company accepts only cash or check for payment, none of this biannual rape nonsense. ---
**Author:** ![Misnomer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/misnomer/32/14897_2.png) [@Misnomer](https://boards.straightdope.com/u/Misnomer)\ **Post date:** [July 9, 2004, 8:28pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/18 "2004-07-09T20:28:49Z")
> [@SmackFu](#): > > What’s interesting is that I have my car and renter’s insurance through the same carrier, and the car is semi-annual and the renter’s is annual. Same here. I take the ‘minimum amount due’ option with both, though (despite the stupid service fee), so I have a car insurance payment every month, but renter’s insurance payments only 6-8 months of every year. Someday I will be able to afford to pay both premiums when they are first billed. 🙂 FWIW, my water bill comes quarterly but everything else is monthly. Oh, and I live in the DC area. ---
**Author:** ![mnemosyne](https://avatars.discourse-cdn.com/v4/letter/m/c4cdca/32.png) [@mnemosyne](https://boards.straightdope.com/u/mnemosyne)\ **Post date:** [July 9, 2004, 11:44pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/19 "2004-07-09T23:44:28Z")
Ontario here - I pay car insurance monthly (well, 11 months out of the year, as the first payment is a double payment). I also pay renter’s insurance monthly, with the same insurance company. Both are direct withdrawl from my bank account, so I only have to remember to check that it’s on each bank statement I receive. Works well for me. Phone and cable internet are billed monthly as well, hydro bi-monthly, and water is included in our rent, so I don’t know when the actual bill is due, but I suppose you could say we pay for it monthly. ---
**Author:** ![ltfire](https://avatars.discourse-cdn.com/v4/letter/l/7ea924/32.png) [@ltfire](https://boards.straightdope.com/u/ltfire)\ **Post date:** [July 9, 2004, 11:56pm UTC](https://boards.straightdope.com/t/why-is-car-insurance-paid-semi-annually/254203/20 "2004-07-09T23:56:23Z")
With a six month policy, they can raise your rate twice a year instead of once a year. :smack: