What Is Temporary Car Insurance?
Temporary car insurance refers to short-term coverage for your vehicle. This could be through canceling a policy before its term has finished, getting insurance through a car rental agency, or through permissive use. Permissive use is the temporary coverage afforded to you should you infrequently borrow an insured individual's car. Below, you'll get a more in-depth look at what temporary insurance is, what you can use it for, when you should use it, and at what points you should adjust your coverage.
Is it Possible to Get Temporary Car Insurance?
The short answer is, sort of. While it's true that most major carriers don't offer anything called temporary car insurance, there are still options you can choose from should you only need insurance for a limited time. You can and should be added to someone else's policy if you borrow a car frequently.
You can get your own policy and cancel before renewal (usually with a penalty). Keep in mind that a lapse in coverage, a period when you are not insured, does flag you as a risk when you buy car insurance later. It will likely cause your rates to skyrocket, sometimes going as high as 30%.
Buying temporary car rental insurance from a car rental company is another possibility if you don't have insurance or a credit card that covers rentals.
Storage insurance is another option for those who have cars they're not driving. It basically protects the vehicle from the elements and from other people while it's not in use (comprehensive coverage only). You can update your policy with more robust coverage when you're ready to take your car on the road.
If you own a car, but need time while you get traditional coverage remember that in most states, you're required to have liability coverage before you get behind the wheel.
How Can You Get Car Insurance for a Temporary Situation?
You can always get a traditional policy and cancel it when you're finished driving. This does give you temporary access to whatever car insurance you need but will likely cause you a termination fee. Just remember that lapses with coverage do come with risks, namely sending your rates through the roof.
You can also ask to be added to someone else's policy for a short time if you're borrowing their vehicle on a regular basis. All they have to do is take you off once you have your own car.
Are There Short-term Scenarios That I Should Adjust My Car Insurance For?
There are various situations when adjusting your car insurance may be necessary.
Temporary Coverage for a Student Driver
A certain level of coverage is wise for a student driver. They're typically under the age of 20. This is important due to the higher risk of traffic accidents among those who are teenagers. You would simply need to add the student to your policy until such time as they own their own car. Once they have purchased a new car in their name, it is on them to have car insurance of their own. Keep in mind insurance companies will not usually cover an individual if they don't own the vehicle in question. This means you wouldn't be able to put the student and their vehicle on your policy unless you owned the car. Insurance companies want you to have a vested interest in the well-being of your vehicle. They refer to this as "insurable interest."
Temporarily Adding Someone Else to Your Auto Insurance
Temporarily adding someone to your auto insurance policy could be prudent if this individual is using your vehicle on a regular basis. This helps cover your vehicle and any potential damage that is caused while the individual is using it.
For the person who may use your vehicle infrequently, your vehicle insurance would cover them with permissive use. Permissive use refers to the coverage afforded to a driver who is not necessarily listed on your policy as long they are given express permission by you to temporarily use your vehicle.
Temporary Insurance for Rental Cars
Remember, your personal auto policy will likely cover a rental, namely through collision, comprehensive, and liability insurance. Collision helps cover damages to the car caused by crashes. Comprehensive covers damage to the car caused by non-collision situations. Liability covers the vehicle and personal damage of drivers in another vehicle. Check with your carrier to see what coverage carries over to a rental.
Your credit card company is another option for rental car insurance, if you use it to rent the car. It is commonly secondary to your personal car insurance. It will usually only cover certain damage or theft to the rental vehicle. Be aware that different credit card companies offer different coverage. Check to see what your card covers before you get to the rental counter.
Rental car companies usually offer personal accident insurance which helps cover the medical expenses for you and your passengers in the event of an injury caused by a motor vehicle accident while you're driving the rental. It may also offer supplemental liability insurance which helps cover the expenses for those whom you hurt or whose property you damage while operating a rented vehicle. There is also personal effects coverage which could cover personal belongings such as clothing or personal electronics that are lost to theft or an accident.
Rental car companies will also have you sign a collision/loss damage waiver (CDW or LDW). This is not actually insurance. It simply means the rental company will not charge you for damages done to the vehicle as long as it wasn't due to your negligence.
Short-term International Car Insurance
Getting short-term car insurance for the country you're visiting may be a good idea. Your policy may cover you if you go to Canada, but it likely won't if you go to Mexico. Instead, you will need to get a separate Mexican policy. The good thing is that some carriers offer coverage in Mexico through specialized brokers south of the border. It's a lot cheaper than buying at the border.
Having a Car in Storage
Storage insurance or "parked car insurance" is a great way to protect your vehicle if you're not driving for a while. The idea is simple: You leave your vehicle in a secure area and don't drive it. Storage insurance basically strips down your coverage so you're paying for comprehensive-only protection. This means your car is protected against outside damage from the elements, animals, vandalism, and theft.
One of the great upsides to this is your rates will likely drop significantly. Less coverage means you pay less. As with any insurance, you can always add collision and liability coverage should you decide to take your car on the road again.
Temporary car insurance for driving tests - There should be little reason to have separate coverage for a person doing a driving test. Your child should already be covered by your insurance if they're using your vehicle with your permission.
Temporary car-sharing insurance - This specifically refers to insurance for those who may be renting out their car through companies such as Avail, Zipcar, or Getaround, which provide liability, collision, and comprehensive coverage.
Temporary car insurance from a dealership - Temporary car insurance from a dealership is an option when you first buy a car. Pricing can vary and it is more expensive than traditional insurance. Coverage lasts anywhere from 1 to 28 days and it can be used as a buffer so you can get proper insurance. Remember, most states require you have a mandated minimum car insurance before you drive, so this could be your best option when at the dealership.
What Should I Do if I Typically Drive a Car That Isn't Mine?
Relying on permissive use when driving a friend or loved one's car infrequently and having non-owner insurance if you do drive a vehicle often are your possible options.
Non-owner car insurance is a policy that gives you liability coverage when you drive a car you don't own. It's a good option if you frequently borrow a car from someone else, or if you don't have your own car but still need insurance to prevent a lapse in coverage. Non-owner car insurance is typically cheaper than a traditional policy because you're not insuring the car itself, just your liability. That said, it doesn't include collision or comprehensive coverage, so you're not covered if you cause the accident.
Get the Right Coverage
Temporary car insurance can you give the short-term coverage you need, be it if you're between carriers or you just don't drive that often. You can get it through dropping your current policy before it renews, opting in for car rental insurance, or through the permissive use of someone you know. Keep in mind you can always make temporary adjustments to your coverage to accommodate your needs, should it be for a student driver, a friend, or storing a vehicle. And if you need help finding the right coverage for your situation, enter your zip code below and fill out a quick questionnaire. SmartFinancial will send you free quotes for the lowest rates in your area based on your answers.
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