Can You Buy Temporary Car Insurance in the United States?

Lucy Lazarony
November 4, 2020

When it comes to car insurance in the United States, you will have to choose from a six-month or 12-month policy period. Short-term and temporary insurance is not readily available in the U.S. as it is in the United Kingdom. There are instances when temporary insurance is needed and it is possible you may already be covered by a longer term car insurance policy so you won’t have to do a thing. Let’s look at situations where a temporary car insurance policy may be needed.

Renting a Car

If you are renting a car, you could get temporary insurance for the length of the car rental. But you may not need it if your current car insurance coverage extends to the rental car. So check with your car insurance company before you rent a car. Is your current insurance more than enough and will it apply to your rental car? If so, you can say no to the additional insurance at the rental car counter. Don’t have a car insurance policy? You can take the coverage at the rental counter or check with your credit card companies. They offer insurance for rental cars too.

Adding Family Members

If you are worried about getting auto insurance coverage for family members, they may already be covered on your insurance. Your spouse and any adult children with driver’s licenses will all be covered under your auto insurance policy. So if one of them wants to borrow the car, they don’t need additional insurance to do so. Be sure to let your insurance company know the names of your family members who will be driving the car. Be aware that additional drivers, especially young and inexperienced drivers, may cause your auto insurance rates to increase. But it may be worth it knowing other family members are insured and can drive the family car if need be. And you can always shop for a new insurance company if the price increase for additional drivers is too high.

Borrowing a Car

If you borrow someone else’s car and the owner of the car has insurance and gives you permission to drive the car, you will be covered by the owner’s insurance. Before you get behind the wheel, be sure to confirm with the owner that you are covered on his or her insurance.

If you drive someone else’s car on a regular basis, the insurance company may request that you be added to the policy as a named insured.

There are instances when you might not be covered by another driver’s insurance company. For example, if you commited a crime while driving a car such as getting a DUI. This would make you a high-risk driver and you might not be covered by the insurance company for driving the borrowed car.

College Students and Temporary Car Insurance

A college student may be gone for a few months. But temporary car insurance is not the solution. Using current car insurance policies is the way to go.

If a college student leaves a car at home, you may be tempted to stop insurance coverage when they are away and the car sits in the driveway. But stopping and starting coverage leads to a gap in coverage, which could cause your insurance rates to increase. Instead, be upfront with your car insurance company that the car is only going to be used during breaks from college. You may be surprised to learn that you are eligible for a discount.

And if a college student takes one of the family cars with him or her to college, you will want to keep your auto insurance policy intact. Are they a named insured on the car? Make them one before they leave for school. Are they familiar with how auto insurance works? Give them a refresher course before giving them the keys to the car.

Non-Owner Car Insurance

Non-owner liability car insurance is one way to maintain car insurance coverage without owning the car that you are driving. Liability coverage will pay for injuries and any property damage that you may cause to others in an accident. This is a great way to get some temporary coverage, though the insurance term is likely to be for six months or a year. These policies are much better options than going without car insurance at all. All the mainstream car insurance companies offer non-owner liability policies so you will have plenty of options to choose from. Be sure to shop around for the best deal.

Losing Your Down Payment

Here is one of the risks of trying to get a temporary, short-term insurance policy out of a full-term policy.

It varies from insurance company to insurance company, but most insurance policies require a downpayment worth 30 to 45 days of the total premium when beginning a new policy. And if you cancel a few days into your policy, you may not be able to get back your down payment. And on top of that, some insurance companies charge cancellation fees. Some insurance companies charge $50 cancellation fees. Others charge a short rate fee, which is 10 percent of your remaining policy. A short rate fee could get mighty expensive if you cancel your policy early in the policy term. So it is best to stay with an insurance policy until its policy period ends, otherwise you may have to pay cancellation and other fees.

Losing Coverages

Here is another downside to leaving an insurance policy early.

Many car insurance companies limit the use of collision and comprehensive coverages within 30 days of a policy’s start date. If you only want a temporary policy of a couple of weeks, you won’t be eligible for these important coverages.

Collision insurance is coverage that helps to repair or replace your car if it is damaged in an accident with another vehicle or object such as a fence or a tree. Comprehensive auto insurance covers events that aren’t covered by collision insurance. These events include fire, theft, vandalism and damages such as a hailstorm, a windstorm, a hurricane and a tornado.

So think twice about exiting an auto insurance policy before these important policy coverages kick in.

Usage-Based Insurance Plans

If you are an infrequent, low-mileage driver, usage-based insurance plans may be right for you. They aren’t temporary but they are affordable.

Usage-based insurance plans use telematics devices to monitor a driver’s driving habits, speed, mileage and total driving time. With telematics, safe drivers get cheaper insurance. And these usage-based plans may be good for you if you don’t do a lot of driving and you are looking for some low-cost insurance. Progressive, Allstate, State Farm, Esurance, Nationwide, Liberty Mutual and Geico are among the insurance companies offering usage-based insurance plans with telematics devices. Other companies offering usage-based car insurance are Metromile and Root. These programs may be the most cost-effective solution for infrequent drivers.

Check With Insurance Companies About Coverage

As you can see there are many instances where using a full-term insurance policy will take care of a temporary need for insurance. So when an occasion for temporary insurance comes up, check with an insurance company to see what can be done. You might have all the coverage that you need from a friend’s or parent’s full-term policy or you may find an affordable six-month policy that you can get on your own will do the trick.

The best way to save on a policy is to compare rates. Let SmartFinancial do the hard work for you. Begin by entering your zip code below.

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