What is temporary car insurance and do I need it?


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UPDATED: 2021-04-21T18:41:27.255Z
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A woman closing the trunk of her car with temporary car insurance.

As the name implies, temporary car insurance is a short-term, temporary policy to insure a motor vehicle for a specified period, such as a day, a week, or a month. Though you may see them advertised, short-term policies like these are not standard in the car insurance industry.

Auto insurers typically only sell six-month or one-year policies at a time. Companies that issue temporary car insurance may have shorter-term options. However, those policies may not offer the same coverage as standard car insurance and may not protect you in case of an accident, theft, fire, vandalism, or other damage.

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Who Might Need Temporary Car Insurance?

Temporary car insurance is good if you need to borrow someone else’s vehicle for a short time. It's also helpful if you're thinking of lending your car to someone who needs it for a few days. If you are moving to a new house and need to rent a truck or van, you may be thinking you need temporary insurance to drive it.

You may also be wondering if you can save money buying temporary insurance for your college student who is only home and driving a vehicle during school breaks. Perhaps you don’t own a car but want to take a camping trip with the family and would like to rent an RV or trailer for a week or two.

If you are planning to only drive a vehicle you don’t own as part of a ride-sharing service, it doesn’t make sense to pay for a full coverage policy. If you bought a car that you plan to ‘flip’ and sell right away, purchasing a six-month or year policy doesn’t sound practical.

These all seem like good reasons to buy temporary car insurance coverage. After all, why would you buy something that lasts six months to a year if you only need it for a few days or weeks? If you’re asking yourself any of these questions, you should first get a better idea of what a regular insurance policy entails and what it covers.

What Standard Auto Insurance Offers

Premiums for auto insurance can seem expensive, especially for a new driver or high-risk driver due to previous claims or a driving offense.

Auto insurance policy rates vary depending on many factors and rely on statistics for drivers like yourself, among other criteria. But remember — insurance companies are businesses and have to remain competitive inside of the industry. You don’t need to worry overly mcuh about being “ripped off" (although you should, of course, still shop around.)

You should know that any car insurance company can pause or cancel your policy should your circumstances change. If you are away for a length of time and don't plan to move or drive the vehicle at all, you can insure it as “parked” for a reduced premium.

If you are away for long periods and want to put your car in storage to protect it from weather damage, theft, or vandalism, you might also ask for “comprehensive only” insurance. A minimum storage duration may apply to qualify, so be sure you can meet any required conditions.

If you loan your car to someone, or you borrow someone else’s car, the car owner’s policy normally covers both of the drivers. You wouldn’t need any extra insurance for the short time you lend the car.

But, a “high-risk” driver, such as someone with a driving offense on record, may not fit with your personal vehicle insurance. Your policy documents will spell this out if that's the case, so always make sure to read them carefully.

Your standard car insurance policy also covers additional family members that may be using the vehicle. This is even if they are only driving it occasionally. Most insurers will include anyone in your home with a valid driver’s license who may have access to the vehicle on the policy as occasional drivers.

Generally, the less coverage and options you include on your policy, the cheaper your insurance will be. That said, many policies can have “riders” attached that are inexpensive and helpful to have in certain circumstances. For instance, insurers often include rental car insurance as part of your standard policy. This is very useful for those who frequently travel and rent cars.

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Rental Vehicle Insurance

Whether or not you have rental vehicle coverage already, most rental companies can offer you extra insurance. This may be helpful to you. A rental company policy may feature a lower deductible than your regular car insurance. You will pay less should you have an accident or incur damage while driving the rental vehicle.

Rental car insurance may also allow you to purchase higher coverage limits for not a lot of extra money since it is a short-term agreement. If your personal insurance does not cover it, you can purchase collision and comprehensive coverage for the rental vehicle. That way, if there is an accident or damage to the rental, you won’t have to pay anything else.

As the famous commercial says, “what’s in your wallet?” Take stock of your credit cards, as many credit cards feature rental car coverage included if you pay for the rental with that card. Read through the terms and benefits of your card to make sure of the requirements and policies.

Temporary Car Insurance Advantages

If your situation warrants, there can be advantages to securing short-term, temporary insurance. Some organizations specialize in this kind of insurance, typically offering terms between 1-28 days, and some even by the hour.

Conditions can vary between states, so check online for help in finding one in your area to get a quote. Here are some benefits of temporary car insurance to consider:

  • Temporary car insurance policies are typically independent of any other insurance policy, so any claims made under such a policy will not impact the premium rates of the vehicle’s owner.
  • For any claim filed under a short-term auto coverage category, the vehicle remains under the owner’s control rather than the driver's.
  • Since no one will file a claim under a pre-existing, personal car insurance policy, any no-claims-discount (NCD) earned will remain unaffected and in force.

How To Shop For Temporary Car Insurance

If you decide that buying temporary car insurance best fits your needs, it is certainly available. Still, you should approach it objectively and make sure you understand the terms of the specific policy you intend to buy.

Here are some things to keep in mind when shopping for a temporary car insurance policy:

  • Get several quotes for comparison. You should always do this when shopping for any kind of service to make sure you are getting a fair market price.
  • Check the seller’s reputation online or in person. Look for favorable reviews or testimonials from past customers on their website, or even ask the seller for a customer referral you can personally speak to.
  • Check the Better Business Bureau to ensure there are no legal actions against the seller or history of fraud.
  • Read the policy carefully and understand exactly what it includes should you need to make a claim. Look for and ask about these common coverages:

  • Collision

  • Comprehensive
  • Liability limits
  • Towing charges
  • Medical/Injury Coverage and Limits

Be sure you are aware of the total costs, policy term, and when the coverage will be in effect. Do not drive the vehicle before the policy is in force.

You may need to make a deposit upfront in addition to the premium costs. If so, check the conditions of the deposit refund, and find out if any early cancellation or transaction fees may apply.

Other Options For Non-standard Car Insurance

If you are looking for other non-standard car insurance options, these options are similar to temporary car insurance policies.

Non-owner Liability Insurance Policies

If you regularly drive a car that someone else owns and they don’t have their own insurance or their coverage doesn’t extend to an additional driver, you can purchase a non-owner policy.

You can buy these from a regular insurance company, and like standard insurance, they are usually only offered in six-month or annual policy terms. So, they are not technically considered “temporary” car insurance policies.

Typically, non-owner policy coverage is for liability only, which protects you against causing bodily injury to others or damage to public property.

This may result in lower premiums, but in that case, you are not covered for damages to the vehicle, for theft, fire, vandalism, or injury to yourself or your passengers. However, if your circumstances merit it, a non-owner policy can be a prudent option and save you some money.

Usage-based Car Insurance

If you are considering temporary car insurance because you don’t drive your vehicle very often, you can also look into purchasing “pay-as-you-go” or “pay-per-mile” insurance. In this type of insurance, your personal driving habits determine premiums instead of the statistical behavior of other drivers.

Generally speaking, the less you drive, the lower your premiums as long as your driving status doesn’t change significantly or you don't become involved in an accident.

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