Temporary car insurance is a short-term way to insure a car you’re driving, whether it’s your own car, a rental, or a car you’re lending to or borrowing from someone else. We’ll explain what shorter terms are available, what coverage entails, how to get it, as well as help you determine when it’s best for you to look into a short-term car insurance policy.
What is Temporary Car Insurance?
Insurers do not sell temporary or short-term car insurance for less than six months at a time. Websites may lure you in with the promise of one-day, seven-day or 28 day auto insurance coverage, but the shortest you will get from major reputable insurance companies is a six-month policy that you have to cancel partway through. We spoke with agents from major insurers such as State Farm, GEICO, Allstate, Farmers and National General, and they all confirmed this.
While short term coverage makes sense under several circumstances, your existing auto insurance coverage and insurer might be able to accommodate you. If you don't have one, check to see if non-owners insurance makes more sense. Typical examples of needing short-term coverage include: having a different driver operate your car, placing your car into storage, or even buying a new (but used) vehicle. We’ll discuss these more below.
How Does Short-Term Car Insurance Work?
It’ll be very similar to a traditional auto insurance policy. You’ll choose the amount of coverage, which will range from your state’s minimum insurance requirements to higher limits if you have more assets to lose. Many states require liability coverage, and depending on where you live, you can opt into personal injury protection, collision and comprehensive, or other types of coverage.
Short Term Coverage: The shortest term you can buy in the U.S. will be six months. You’ll have to purchase a policy for half a year, pay on a month to month basis or prepay the amount and request a refund. Either way, set up a reminder before a week or month (however long you need it for) is up to cancel. Be sure to obtain a cancellation confirmation number, and to note the time, date, and representative you spoke with. Complaints of payments being processed despite cancellation, or refunds taking a long time can be common. Most companies, including the three largest - State Farm, GEICO and Allstate, don't charge cancellation fees and will refund any unearned premiums. If you cancel coverage during the sixth week, but only paid for four weeks, they'll send you a balance due for the two extra weeks.
How to Apply and Get Coverage: As with a traditional policy, check with three companies at least to make sure you’re getting a good auto insurance quote (if costs are a concern). Ensure you’re comparing the same coverage, limits, and duration. You’ll need to be a licensed motorist, provide the vehicle identification number of the car in question, and answer basic questions about your driving history and location to get temporary insurance. Be wary of sites that promise to offer you one-day coverage, seven days of insurance, or anything less than one month in America. Submitting your information for a quote online or calling their telephone number will usually route you to a regular licensed agent (Allstate, in our case), that could offer six months at a minimum. Lastly, don't forget to cancel.
Should I Get Temporary Car Insurance?
There are a couple of circumstances where it might make sense to get car insurance temporarily and separately from your existing policy.
Adding a New Driver Temporarily: Most coverages extend to people you give permission to temporarily, but some policies only cover members of the household who are explicitly listed. If a friend, relative or someone else will be driving your car for a short period of time, check with your insurer to see if they’re covered. Oftentimes, your son or daughter returning home from college will be covered (usually if they're driving for less than a month). If they’re not covered, weigh the cost of adding them to the policy vs getting them a separate temporary policy vs. the risk of doing nothing. This also applies to lending your car (or even borrowing someone else’s car). Since it’s separate, any accident or damage done to a car covered by a temporary policy won’t make a claim against the regular policy - saving you (or the policy owner) from higher premiums and making the driver responsible for the deductible.
Safeguarding against Claims or Different Risks: If your student driver is just starting to learn, or you need to add someone with very different driving habits, it might be a good decision to insure them with an added temporary policy that will safeguard you from a claim against your normal policy (and preserve your premiums or accident-free benefits some). Your other driver might be a conservative or safer driver than you, in which case, getting a standalone policy temporarily for them might be more affordable. As with any of these, it comes down to weighing the premium for their standalone temporary policy against the risk of rates being higher combined. If you’re the driver covered by a temporary policy, any accidents will still be on your record.
Placing a Car in Storage: Even if you have a car in storage, you should have it insured - you might be required by your state to deregister the vehicle otherwise, and you’re still at risk for theft or damage. A temporary policy can be an affordable solution to maintain minimum liability coverage and comprehensive protection to a vehicle in storage. Comprehensive takes care of any damage or theft while the vehicle is garaged or off the road. Compare it to the cost of paring down your coverage and reducing your mileage driven. You can always beef up the policy when it is time to take the vehicle on the road, or get a regular policy if it is to become your commuting car.
Driving a Temporary Rental Car: Another good use of temporary car insurance is insuring a rental when your car is in the shop or you’re on vacation. While some regular insurance policies or credit cards cover rental insurance, short-term car insurance might be more affordable than the insurance from a rental car agency and will protect you for as long or short as you desire. Most credit cards typically offer secondary insurance on collision only (they want you to claim with your car insurance first).
Temporary Car Insurance vs. Non-Owner Car Insurance
If you’re frequently driving a car you don’t own, non-owner car insurance might be a more appropriate and affordable option for you than either normal or temporary car insurance. Traditional insurance will be too much coverage for something you won’t use everyday, and you may have to monitor or extend temporary car insurance periodically.
With a non-owners policy, you’re protected regardless of which vehicle you drive. A non-owner car insurance policy provides liability coverage, which is mandatory in most states. Since liability coverage follows you, not the car, you’ll always be covered regardless of whose vehicle you’re driving, whether it’s a friend’s, a rental, or it belongs to your employer.
The downside is that non-owner car insurance doesn’t provide comprehensive coverage, meaning you’d be on the hook for damage to the car sustained from an accident or collision.