What is temporary car insurance and do I need it?

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What is temporary car insurance?

Term auto insurance is auto insurance designed for short-term use cases. Although these policies do exist, they are quite rare and it is not possible to obtain a car insurance quote for short term coverage from major insurers. But drivers who only need car insurance coverage for a short time still have options.

Can I take out daily, weekly or monthly car insurance?

It is generally not possible to take out a car insurance policy for a period of less than six months. There are a few companies that offer monthly auto insurance policies, but these are often smaller, lesser-known insurers. Their coverage and customer service aren’t always as good as the big companies, so it’s important to read the fine print and research the insurance company before purchasing one of these policies.

There are alternatives to temporary auto insurance. Usually, it is possible to find a better solution than buying a monthly policy from an unknown provider. Some of these solutions are described below.

When do you need temporary car insurance?

Here is an overview of some common situations in which a driver may want to apply for temporary coverage:

College students who only drive during school vacations

It doesn’t always make sense for college students to pay for a year-round car insurance policy when they only drive a few months a year. Some choose to cancel their policies during the months they are away from school, while others reduce their coverage during this time to save money. Some companies also offer car insurance discounts for students attending school elsewhere.

Vacationers driving a rental car

Drivers usually have the option of purchasing rental car coverage through the rental agency. But it’s important to read the fine print first to understand what’s covered and what isn’t. Drivers may also want to check with their credit card providers, particularly if they have travel rewards credit cards, to see if any of them already include rental car insurance.

People borrow their friends’ cars

Generally, a driver does not need to purchase their own insurance to borrow a friend’s car unless they do so frequently or are considered a high-risk driver. Owner’s insurance should cover the driver as long as the owner has given the driver permission to use his vehicle.

Members who do not drive while deployed

Like students, some service members choose to cancel their auto insurance while deployed to save money. Others may seek out insurance companies that offer discounts to military members who are actively deployed.

Individuals using a car-sharing service

Car-sharing services often provide basic car insurance, such as rental car coverage. This includes minimum liability coverage and protection against physical damage to the vehicle. But this basic coverage may not be enough in all situations.

Best Options for Term Auto Insurance

Drivers interested in types of car insurance for short-term use should consider one of the following options:

Permissive use

A permissive use clause is one of the basics of car insurance and is standard on most policies. This covers non-household members who rarely borrow a vehicle. This means that as long as a driver has permission from the vehicle owner, they can borrow that vehicle and drive it legally without any insurance coverage of their own.

There are, however, a few exceptions to this. Those who borrow the vehicle frequently may need to be added to the policy as another named insured. Some companies require all household members of legal driving age to appear on the policy.

Additionally, some permissive use clauses do not cover high-risk drivers. Those with DUIs or other offenses on their record may need to explore other options. It’s always a good idea to check the owner’s car insurance policy before borrowing a car to avoid surprises.

Car Rental Policy

When renting a car or using a car-sharing service, a driver can take advantage of the insurance provided by the rental company. But it’s still important to read the fine print before signing up. Not all policies offer the same coverage. Although a basic policy may be more affordable, it could leave a driver facing a huge bill if they end up in an accident.

Look at the coverage limits and deductibles as well as the premium cost and compare them to what’s available with some of the other options on this list.

Coverage based on usage

Some insurance companies offer usage-based policies that charge drivers based on the number of miles they drive. These policies are usually only available in six-month increments. But they might end up being more affordable for those who rarely drive.

These policies are more readily available from major insurers than monthly car insurance policies, with many major insurers offering some sort of program to reward infrequent drivers.

car storage cover

When a car is not being driven, some insurers allow customers to reduce their coverage levels to full coverage only. This protects the vehicle against weather damage, theft and vandalism. But it does not include any liability coverage or coverage for collisions with other vehicles.

A car storage policy can save the insured a lot of money compared to a standard car insurance policy. But the driver should remember to restore full coverage before taking the car back on the road.

Non-owner car insurance

A non-owner auto insurance policy is a standard auto insurance policy available to those who do not own a vehicle. It only provides liability cover and does not include any cover for damage to the vehicle the policyholder is driving.

This could be a good addition to a rental car policy or when driving a friend’s vehicle, but it may not provide adequate cover for those who own their own vehicle.

Disadvantages of short-term car insurance coverage

Term auto insurance is not without drawbacks. Here are a few to know:

Genuine temporary car insurance policies are rare

It is difficult to find temporary car insurance in the United States. Drivers should generally use one or more of the above workarounds. Those who purchase a monthly auto insurance policy should read the policy terms carefully to understand what is covered and what is not.

Coverage may be limited

Some policies, such as non-owner auto insurance policies, only provide liability coverage and offer no protection for the vehicle itself. Similarly, car rental policies may only provide minimal coverage. It’s up to the driver how much car insurance they need, but these policies may not always be enough.

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