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Liberty Mutual 12-Month Rate Guarantee: Huh?

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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Liberty Mutual has a new television commercial running at the moment touting their ability to lock in your car insurance rate for 12 months “today!”

For those who have a six-month auto insurance policy, which seems to increase every six months, this might sound like the godsend you’ve been waiting for.

Imagine that; a 12-month auto insurance policy with the same payment and nothing to worry about until next year. Why hasn’t any other insurer come up with this idea yet?

Spoiler alert. This type of policy has been around forever. It’s nothing new and quite frankly, we’re a little disappointed in this type of advertising.

To be fair to Liberty Mutual, TTAI is embarrassed by most insurance advertising. It gives our industry a less than honest reputation.

This is largely because most of it has nothing to do with insurance and does little more than confuse the insurance buying public about the reality of the product…just like advertising for every industry I suppose.

Why Is the 12-Month Policy Better?

Let’s face it. If Liberty Mutual is bothering to tell us about their 12-month policy, it’s probably a better deal for consumers.

Put another way, you’ve likely never seen a commercial touting a particular insurer’s six-month auto policy term.

Check out an earlier post about car insurance policy terms to get the whole scoop on why the 12-month policy is better for you, and the six-month policy better for your auto insurance company.

[How are auto insurance rates determined?]

*The 12-month rate guarantee is not applicable to drivers in Arkansas, where policies are six months by default.

Enter your zip code below to view companies that have cheap auto insurance rates.

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Why Haven’t I Heard of the 12-Month Policy Before?

Following the link in the paragraph above will help explain why this is the case. As discussed above, the 12-month car insurance policy has been around long before Liberty Mutual “guaranteed” it.

You don’t hear about it very often because some of the top car insurers (who don’t offer the option) might not be the ones looking out for your best interests.

Why do you think they come up with all those other gimmicks, like the Safe Driving Bonus Check or Name Your Price?

Contact a local independent insurance agent and ask for a 12-month policy. They’ll likely offer you the option from 10 different insurers at a lower cost than what you’re currently paying for your six-month policy.

Read more: Liberty Mutual Better Car Replacement

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