Cash News
Most major car insurance companies only issue policies for six-month and one-year terms. So if you need temporary car insurance, you might run into trouble finding reputable insurance companies offering short-term coverage.
While there are some temporary car insurance companies out there offering daily or weekly rates on car insurance, these smaller carriers can offer insufficient coverage or be operating insurance scams.
The good news is there are plenty of temporary insurance options for both vehicle owners and non-owners utilizing different approaches to standard car insurance. Let’s take a deeper dive into your choices for temporary car insurance and how you can leverage most car insurance policies to gain affordable temporary coverage.
What is temporary auto insurance?
Temporary auto insurance is a policy that provides temporary insurance coverage for a short period. It’s sometimes referred to as short-term car insurance or monthly car insurance.
Most auto insurance companies don’t offer anything shorter than a six-month policy, so you’ll have to seek out lesser-known insurers to find temporary coverage. Because major insurers don’t offer products like one-day car insurance, if you find an agent selling daily or month-to-month coverage, make sure they’re a licensed auto insurance agent.
You can find a registry of licensed insurance agents on your state’s insurance department website or through the National Insurance Producer Registry.
What are some reasons you might need short-term car insurance?
Circumstances could arise when you need monthly or weekly car insurance. Here are a few scenarios in which a standard car insurance policy might not be a good fit for you financially.
-
You’re a college student. A lot of college students don’t have cars on campus and only end up driving a car regularly on holiday or summer breaks.
-
You’re just visiting. Maybe you’re just in town for a bit for some sightseeing or a family gathering and need to borrow a friend’s car or rent a car to get around.
-
You’re borrowing someone else’s car. For whatever reason, you need a vehicle and a family member or friend has one to spare.
-
You bought a car you’re selling soon. Whether you’re flipping the car or getting ready to go carless, you might not be planning on keeping your vehicle long-term.
-
You only drive seasonally. You don’t drive your own car frequently or your vehicle is in storage a majority of the year.
It’s tempting in these situations to take the risk and drive without insurance, but in most states that’s illegal and will open you up to hefty fines, a suspended license, and even jail time. And even if your car is in storage or sitting in the driveway for long periods, it can still be a target of theft, vandalism, or damage from a natural disaster, storm, or falling object.
So it’s important to either have your own auto insurance policy or make sure the car owner’s policy has you covered.
6 temporary auto insurance options for car owners and non-owners
If you find yourself in a situation where you need car insurance temporarily, the best car insurance companies offer several out–of-the-box coverage solutions to keep car insurance costs reasonable.
1. Cancel coverage
Best for vehicle owners
This is the most expensive option in terms of temporary car insurance policies, but if you need coverage for a few months you can take out a six-month standard auto insurance policy and then drop the insurance when you no longer need it. This option does open you up to a cancellation fee, which can be $50 or more, and there’s no guarantee you’ll get a refund.
Cancellation fees aside, you’ll also want to take care not to miss any pending payments as it could go down on your driving record as a lapse in coverage and result in higher car insurance rates.
Read more: How to switch car insurance companies
2. Non-owner car insurance
Best for borrowing a car
If you regularly drive a car you don’t own or frequently rent cars, a non-owner policy may be the cheapest option for temporary coverage under your own insurance policy.
Be warned that the assumption is the vehicle you’re driving is covered by comprehensive and collision coverage so non-owner car insurance usually just offers liability coverage.
3. Rental car insurance
Best for rental cars
If you’re using a rental car for a shorter period of time, it may make sense to buy insurance from the rental car company. But keep in mind the waivers the rental car companies sell usually just offer collision coverage to pay for damage to the rental car.
Before you buy rental car insurance from the rental company, double-check to see if your credit card offers primary or secondary rental car coverage either as a free benefit or for a monthly fee.
4. Pay-per-mile insurance
Best for occasional drivers
College students, retirees, and other drivers who only hop into their vehicles sporadically may save quite a bit leaning into usage-based insurance. Pay-per-mile coverage allows infrequent drivers to maintain full coverage while lowering future insurance premiums.
In order to qualify for mileage-based insurance rates, you may have to live in certain states and be required to install telematics on your vehicle.
5. Permissive use coverage
Best for unplanned car use with family members
A permissive user or driver is defined as a licensed driver who has the car owner’s permission to use the car, although many insurance companies stipulate limits to this coverage. The policyholder can also specifically identify excluded drivers who aren’t allowed to use their vehicles.
Once consent is given to use the borrowed car, you’re covered under the car owner’s insurance or friend’s policy for whatever kind of coverage they have on the policy.
6. Add a driver to an existing policy
Best for sharing a car with family or friends
Unlike the previous option, if you’re planning on sharing a car frequently or for longer periods of time with friends or family, it’s best to be added officially to the policy as a named driver even if it slightly raises premiums.
Confused about the terminology? A named insured driver is the person listed as the primary driver of the vehicle on the policy. A named driver would be an additional driver added to the policy.
7. Parked car insurance
Best for cars in storage
While you don’t legally need insurance for a vehicle that’s in storage or isn’t driven on public roads, you might want parked car insurance if you’re worried about damage occurring either in your driveway, garage, or in storage.
Storage coverage is typically cheaper because it provides comprehensive coverage for theft, glass damage, fire or flood but doesn’t require liability insurance.
8. Car-sharing services
Best alternative to renting a car
If you live in a metro area, it’s worthwhile to explore car-sharing services as a temporary solution. Insurance is usually included in the cost quoted for car-sharing or peer-to-peer rental services.
It’s worth noting that if you’re considering driving for a ride-share service, insurance companies typically won’t cover the vehicle under permissive use. You need special coverage as a rideshare driver or delivery driver.
How to shop for temporary or short-term car insurance coverage
Here are a few tips for drivers looking for a short-term car insurance policy that steer clear of scams and ensure affordable car insurance rates.
Contact a licensed insurance agent.
The best way to shop for temporary or short-term car insurance is to connect with a licensed insurance agent who can help you explore coverage options and shop for multiple insurance quotes. Be transparent about your situation and how often you’ll use the vehicle.
Don’t let your coverage lapse.
Trying to save money by finding a temporary insurance solution can cost you more in the long run if you let your coverage lapse. If the vehicle is registered in your name and you don’t have insurance, be aware that the insurance companies communicate directly to your state’s Department of Motor Vehicles.
Consider other options.
Remember that borrowing or renting a vehicle isn’t your only option when you need a set of wheels. Ridesharing services, which obviously don’t require you to pay for insurance or gas, may be cheaper in the long run if you don’t drive frequently and live in a metro or suburban area.