Car insurance can cover you on the open road, but long-term coverage may not always be necessary. If you only need to be covered for a short amount of time, a temporary car insurance policy could be the better option. However, before purchasing this type of policy, it’s important to understand how it works and what’s covered.
- Purchasing shorter-term car insurance could make sense in certain situations, depending on your coverage needs.
- Car insurance companies typically require you to purchase regular policies in increments of six months to a year.
- Temporary car insurance may not take effect right away; there may be a waiting period.
What Is Temporary Car Insurance?
Typically, when you buy car insurance you’re buying liability coverage—and possibly collision coverage—for at least six months. Some car insurance companies will let you purchase a policy that covers you for 12 months if you'd prefer, though it’s not as common.
Temporary car insurance can cover you for a shorter amount of time if your car insurance company offers it. For example, you may need coverage for three months instead of six—or even just for one month. In that scenario you may want a shorter-term policy, so that you don’t pay for car insurance coverage you won’t need or use.
It’s important to keep in mind that most car insurance companies don’t specifically offer temporary car insurance. Instead, they offer car insurance policies with varying terms, though again, it’s typical for the minimum coverage period to last at least six months.
Companies that offer temporary car insurance may require you to pay one or several months’ worth of premiums in advance before your coverage takes effect. This money may not be refundable even if you end up canceling the policy early.
Why Buy Temporary Car Insurance?
There are a number of reasons why someone may not need car insurance for the long term, making a temporary policy the better option.
For example, you may look for a temporary car insurance policy if:
- You’re renting a car.
- You’re borrowing someone else’s car and aren’t listed on their insurance policy.
- You’re temporarily driving someone else’s car to take a trip.
- You bought a car but plan to resell it relatively quickly.
- You’re traveling to another country and plan to drive while you’re there.
- You drive for a ride-sharing service but don’t own the vehicle you drive.
- You want to supplement your existing car insurance coverage.
- You need to add coverage for a driver who’s staying in your household temporarily.
Temporary car insurance could help you get covered in those scenarios or any other situation in which you don’t have a need for a more permanent policy.
If you’re looking for temporary car insurance so you can drive in another country, be sure to check into the licensing and registration requirements to make sure you’re driving legally.
When Don’t You Need It?
There are many situations in which you may not need to go the extra mile to buy a temporary policy. For example, say that you’re renting a car with your credit card, and your card includes a rental car collision damage waiver to protect you against theft or damages while you’re driving. In that case you may not need any other supplemental coverage.
You could also potentially skip out on temporary insurance if you purchase coverage from the rental car company instead. Most rental car companies offer their own add-on insurance policies that you can include in your rental agreement. These policies cover you temporarily while you’re renting the vehicle.
If you already have a standard car insurance policy in place, that may also provide temporary coverage for rental cars. If your coverage carries over, you’d be subject to the same limits and exclusions as you would with your personal vehicle. You’d also have to pay your regular deductible if you get in an accident with a rental car or it’s stolen or vandalized.
If you’re renting a car for business use or purposes, your personal car insurance coverage may not apply.
What to Know When Buying Temporary Car Insurance
If you think you’ll need car insurance temporarily, there a few things to keep in mind before purchasing a policy. First, remember that it may be harder to find, as not all car insurance companies offer it. You can start with your current car insurance company, but you may need to do some research to find an insurer that offers short-term policies. Comparing temporary insurance options online can give you an idea of the coverage options available.
Next, consider the cost. Specifically, look at the premiums and deductibles as well as whether the insurance company requires any type of down payment or prepayment of monthly premiums. Remember, as this is temporary insurance, it may be more expensive than standard car insurance coverage.
Perhaps most important, look at what’s covered by the policy. Liability insurance protects you against lawsuits if you’re in an accident and injure someone or cause damage to someone else’s vehicle. Collision coverage helps pay for repairs to your vehicle if you’re involved in an accident. The policy may also cover things such as medical payments and towing, depending on the insurer.
In some cases you may be able to get what’s called a “nonowner liability policy.” This type of car insurance could cover you for a vehicle you plan to drive temporarily that you don’t own.
Ask the car insurance company what term options are available to see if there’s a policy that meets your needs. And if you aren’t able to find a term that’s an exact match, consider whether there are any cancellation fees involved if you need to end the policy early. Also, ask whether any prepaid premium amounts might be refundable to you if you don’t take advantage of the full policy period.
Bumps in the Road
Before signing off on a short-term policy, make sure you understand what you’re getting and what you’re paying for it. Keep in mind that your driving history and record can play a part in determining your premium amounts. If you’re deemed a high-risk driver because of frequent accidents or tickets, that could make temporary car insurance more expensive.
And if you can’t get a temporary policy, you could always purchase a regular six-month policy. You’d then have to decide whether to keep the policy in place for the full six months or cancel it when you no longer need it. Remember to check with the insurance company to find out if there’s a fee involved for canceling your policy ahead of schedule.