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When Should I Consider Temporary Car Insurance?

Fran
Jessica Nguyen November 4, 2020

Do you want temporary auto insurance on a car that you will only be driving for a short period of time? Temporary car insurance policies, also known as short term car insurance, are used when you simply need coverage for a short amount of time, such as less than six months, for a number of reasons.

In general, insurance providers write regular auto insurance plans that run anywhere from six months to a year. Temporary car insurance addresses this issue by supplying you with the coverage options you need for a specific amount of time.

Do All Insurers Offer Temporary Car Insurance?

The majority of major companies do not offer temporary car insurance. While several insurers have installment options that enable policyholders to pay month to month, insurance companies push for customers to purchase auto insurance in six month or 1 year installments.

What if I Need Temporary Car Insurance for Three Months?

If you want coverage for fewer than six months, the shortest package you'll find is probably a six-month policy that you'll have to cancel halfway through.

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 car insurance is not readily available in the U.S. as it is in the United Kingdom. There are instances when a temporary car insurance policy 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.

What Do I Need to Buy Temporary Car Insurance?

When buying temporary car insurance, the following information is usually required, just like it is for a regular car insurance policy:

  • Date of Birth
  • Proof of Address
  • Driving license
  • Driving history
  • Personal details such as name, age, address
  • Car details such as make and model, etc.

When Is Temporary Car Insurance a Good Idea?

A temporary car insurance policy may be required or desired for a variety of reasons. Common cases include when someone owns a new car but only plans to have it for a limited time, or when someone wants coverage right now so they can shop for a permanent insurance package later.

  • Renting a Car: If you are renting a car, you may need a temporary car insurance policy for the length of the car rental as opposed to buying the expensive rental car insurance at the dealer. 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? If so, you can say no to the additional insurance at the rental car counter.
  • Driving a rental car: If you're driving a rented car on and off for a few months and don't have your own permanent rental car insurance, you'll want to get temporary car insurance to avoid paying heavy rental provider insurance premiums. But first, consider how much insurance renting with a credit card will cost? It's usually cheaper than the car rental companies.
  • Borrowing a friend's car: If you borrow your friend's car and the owner of the car has coverage and gives you permission to drive the car, you will be covered by the owner's insurance. If you drive someone else's car for a long period of time, 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 committed a crime while driving a car such as getting a DUI.
  • You're on vacation or road trip: People who go to another country and bring their car with them for a short period of time should consider temporary car insurance. For example, if you drove to Canada and plan to stay for a few weeks, you could get temporary insurance to give you the coverage you need while you were there.

Tips

  • Another way is to talk with the driver of the car you'll be driving and ask them to check with their insurance provider to see if you can be insured when driving their car. If their insurance covers you, you do not need to pay any further coverage.
  • Check your credit card policy if you're renting a car. Some credit card companies will automatically cover your rental cars if you pay for the rental with their card.

It's always a good idea to contact your auto insurance policy, home insurance company, or a registered insurance representative to explain your situation to them before deciding to purchase temporary car insurance. They may be able to surprise you by revealing that they may offer temporary car insurance coverage, or they may be able to recommend a way to get temporary car insurance.

What Temporary Car Insurance Covers

In principle, short term auto insurance will provide the same basic liability coverage for a car that a traditional policy would. This is because the main distinction between temporary car insurance and long-term auto insurance is the length rather than the coverage. As a result, it saves you in the case of a collision resulting in injury, collateral loss, or even a totaled car.

Basic liability insurance policies coverage, on the other hand, only includes the other driver's medical expenses and maintenance costs. To be fully financially covered, car owners should consider comprehensive coverage.

Temporary Car Insurance Coverage for Students

If your child has their own vehicle, it must be insured at all times they drive it. However, if they leave their vehicle at home for the quarter or semester and have a separate insurance policy, they should cancel it and reinstate it when they return home for the holidays.

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. However, stopping and starting coverage leads to a gap in coverage, which could cause your insurance rates to increase.

If your child is on your auto insurance policy but isn't driving any of your cars because they're at school, you can let your agent know so you can get a discount. Some insurance providers expect all approved family members to be included on the policy, even though they don't drive the vehicle too much or at all.

Need Temporary Car Insurance?

How Much Does Temporary Car Insurance Cost?

Although purchasing insurance on a daily basis will often be more expensive than purchasing it regularly, there are inexpensive auto insurance plans available on a temporary basis, and we will assist you in finding them.

The expense of an insurance plan can vary depending on the type of vehicle you choose to cover, with smaller, less efficient vehicles paying considerably less than, say, the most recent luxury cars. Since there is no such thing as "temporary auto insurance" in the United States, the cost of "temporary car insurance" is the same as a regular six-month policy.

When setting a rate, insurers take into account a number of considerations, so pricing can differ based on particular circumstances. Here are just a few data points insurers will look at:

  • Car year, make and model
  • Your driving history
  • Your credit record
  • Any other drivers who will operate the vehicle

Non-Owner Car Insurance

You say you don't own a car? Non-owner liability insurance coverage is an alternative to short term car insurance and is one way to maintain car insurance coverage without owning the car that you are using regularly.

With a non-owner policy, the liability insurance 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 car coverage, though the term is likely to be for six months or a year.

Non-owner car 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 of car insurance to choose from. Be sure to shop around for the best deal.

Benefits of Buying Temporary Insurance Coverage

  • No need to adjust a policy. It can be challenging to apply a new driver to an existing policy. Depending on the type of driver you're adding, the cost of the policy can skyrocket. If the driver will not need regular access to your car for the rest of your policy term, the expense and commitment of amending an annual policy will most likely not be worth it. But with a temporary insurance policy, you won't have to make any long phone calls or make any changes to your annual insurance contract if you opt for a short-term policy. 
  • Quick purchase and certification. We understand that you will need coverage quickly or that you may be in an emergency situation where you need urgent coverage. Another advantage of provisional auto insurance is the speed at which it can be set up. Revising a standard policy and its policy price can be a long process and an updated insurance package can take a few days to be finalized.
  • Pay just for what you need. There are a variety of cases in which an annual policy is unnecessary, and opting for it will be a waste of money. Temporary car insurance is a perfect way to save money for someone who only wants to borrow someone else's car on occasion. Young drivers are one such example. Insuring a young driver is very expensive, and they sometimes only infrequently have access to a car, particularly if they share a vehicle with their parents.

Cons of Temporary Insurance

  • Down payment and Cancellation fees. 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: 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.

How Can I Get the Cheapest Coverage?

If you're looking for a short-term or partial auto policy because you don't drive as much and want to save money, usage-based insurance is a good option. People who don't travel as much, such as seasonal jobs, teachers, and casual commuters, should consider pay-as-you-go insurance.

If you go on a longer ride, the insurer will restrict your miles and not bill you for distances above that limit. 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.

What Is the Best Temporary Car Insurance?

Allstate, State Farm, Esurance, Nationwide and Liberty Mutual are just a few of 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.

Compare Car Insurance Quotes from Multiple Companies

Driving without insurance is not an option and going without insurance could cost you more in the long-run, so at least get temporary coverage get covered ASAP! There are many instances where using a full-term insurance policy will take care of a temporary coverage need for insurance.

So when an occasion for temporary insurance comes up, check with SmartFinancial to see if it'll serve you better than standard car insurance. The kind of auto insurance policy that is right for you depends on your own conditions, interests and situations, so you'll have to shop around and do some homework before deciding.

The best way to save on a policy is to compare rates. Each insurer gives a different quote so let SmartFinancial find the best insurance quotes for your needs. Begin by entering your zip code below.

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