Temporary car insurance

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Car insurance is required for drivers in almost all 50 states. Before anyone gets behind the wheel, they’ll need to be properly insured. However, there are some instances where car insurance will only be needed temporarily. 

Temporary car insurance isn’t a product someone can buy. However, there are a few ways to find auto coverage for a short period of time. 

Depending on the type of policy, temporary auto insurance can provide comprehensive, collision and liability coverage for the driver. 

When people refer to short-term car insurance, they are usually referring to a normal auto insurance policy. In the U.S., car insurance is commonly offered in six-month or one-year terms. Thus, buying temporary car insurance will require signing up for a longer policy and cancelling it early. 

When shopping around for a new auto insurance policy, it’s important to get quotes from a few providers to find the best fit for the situation. 

What is temporary car insurance?

Short-term car insurance is a product that does not exist. There are no major auto insurance companies in the U.S. that offer it. 

If car insurance is desired for a short time, it is possible to sign up for a regular auto insurance policy and cancel the policy after it is no longer needed. When people talk about temporary car insurance, this is typically what they mean.

Reputable auto insurance companies don’t write short-term policies because they want to keep clients for an extended amount of time, not a few days or weeks. 

Other sources of temporary car insurance include rental car services and credit cards. Rental car agencies usually offer car insurance for the driver, and some credit card companies include auto coverage as a perk. 

How does short-term car insurance work?

Applying for short-term car insurance will follow the same process as applying for regular car insurance. To get temporary or even month-to-month car insurance, the driver will need to sign up for a regular six-month or year-long policy and cancel the policy early. 

When signing up for a new auto insurance policy, pay close attention to the terms of cancellation to see if any fees will be required.

Before applying for the policy, the driver will need a few things:

  • Active driver’s license 
  • Vehicle Identification Number (VIN)
  • Background on driving history and location

During the application process, the driver will need to choose coverages and the term limit of the insurance. Most states only require liability insurance, so it will usually be the minimum level of insurance that is needed. The shortest amount of time a provider will offer auto insurance is usually six months. 

When applying, it’s possible to set up month-to-month payments or pre-pay the amount of time needed. Doing so might make the insurance easier to cancel when it’s no longer necessary.

Do you need temporary car insurance?

There are a few instances when someone might need car insurance for a short length of time. Here are a few circumstances that may call for temporary car insurance:

  • Adding a new driver temporarily: When another driver will be using a policyholder’s car temporarily, some insurers allow the policyholder to add the other driver to the policy.
  • Protecting yourself against claim or other risks: When driving someone else’s uninsured car, the driver might need temporary insurance to avoid liability.
  • Storing a vehicle: When storing a vehicle for a short amount of time, someone might want to keep the car insured to avoid fees associated with laps in auto insurance.
  • Driving a rental car:  Rental car agencies generally offer insurance for the person renting the car, but some people may prefer to seek out their own temporary insurance instead.
  • Student away from home: When a policyholder’s child is included in the policy but away at school, the policyholder might want to temporarily reduce coverage for the child to save money while they are away.

There are other instances where a temporary policy may not be required because the existing auto policy will cover the insurance needs of the policyholder:

  • Family members borrowing your car: People who live with the policyholder are usually covered under their auto insurance. Before anyone borrows the car, check the policy to see if the insurer must be alerted ahead of time. 
  • Driving a friend’s car: When borrowing a friend’s car, it’s usually covered under the friend’s insurance policy as a “permissive driver.” Double-check the policy to make sure that’s the case
  • Renting a car: Rental cars generally offer insurance when people sign up for the rental. 

Non-owner liability car insurance 

Many insurance providers offer non-owner insurance, often referred to as non-driver insurance. This kind of insurance provides liability coverage for people who drive but do not own a car. 

Non-owner liability car insurance will cover the driver’s liability in the event of an accident, meaning the insurance will pay for damages to the other driver and their car if the insured driver is found at-fault. Liability insurance will not cover the insured driver themselves. 

Like most auto insurance, providers offer non-owner insurance policies for six-months or more, so anyone interested in this insurance for a short time will have to sign up for a longer policy and cancel it early—just like a short-term insurance policy.

One positive feature of non-owner insurance is that it tends to cost less than regular auto insurance, so it may be the cheaper option when compared to temporary car insurance.

Usage-based auto insurance

Usage-based insurance, or UBI, can be thought of as pay-as-you-go auto insurance

According to NAIC, every US vehicle since 2008 has been built with a data recorder in it. These recorders let providers offer mileage-based discounts. 

UBI is a helpful option because drivers will only be charged for the miles they drive. However, UBI is based on new technology, which can raise privacy concerns, as many drivers may be uncomfortable with having their driving habits monitored by others.

UBI may be a better alternative to short-term insurance policies in some cases due to price. If the temporary insurance is only needed for a short time, it might be more expensive to sign up and cancel a policy. In this case, UBI would be the better option. 

How to cancel your car insurance before your policy ends

When signing up for car insurance with the intention of cancelling the policy before the term ends, there are a few things that are helpful to keep in mind:

  • Set up a reminder to cancel the policy before the coverage extends past when it will be used.
  • When cancelling the policy, get a cancellation confirmation number to keep for your records.
  • Note the date and time of the cancellation, as well as the representative who handled it.

There are also a few common obstacles that may come into play when cancelling a policy:

  • It’s illegal to drive without insurance, so prepare for other alternatives.
  • Insurers sometimes continue to process payments despite cancellation. Check your bank statements to make sure your policy and payments are cancelled. 
  • Refunding an insurance policy can take a long time.

The takeaway

  • U.S. providers generally sell policies with terms of six months or more.
  • Temporary insurance will mean buying a regular policy and cancelling early.
  • Before signing up, check the fine print for cancellation fees. 

Short-term car insurance isn’t a product generally offered by major auto insurers in the U.S. People interested in car insurance for a short time can sign up for a basic policy, then cancel after the insurance is no longer needed. 

Rental car agencies and some credit cards also offer short-term car insurance. Before signing up for a new policy temporarily, check with the provider of the current policy to see if it will cover the driver’s needs. Non-owner insurance and usage-based auto insurance offer alternatives to limited auto insurance and could eliminate the need for a short-term policy. 

Julian Dossett

Julian is a freelance writer for Coverage.com, where he writes about auto and home insurance with an eye toward consumer advocacy. His work has appeared at The Simple Dollar, Bankrate, Reviews.com, Blockchain Beach and MSN.com. He’s currently based in New Mexico.

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