Car Insurance

What is short term car insurance coverage?

While typical car insurance policies last six months to one year, temporary auto insurance provides the same amount of coverage for as little as one day to a month. But who is eligible for short term auto insurance?

Committing to a car insurance policy can be quite daunting when you think about the policy length and monthly payments. However, driving without any kind of coverage is not only illegal, but can lead to immense costs down the road. So what should you do if you can’t commit to a long term policy because you’re in between providers or vehicles? Luckily insurance providers offer something a little more casual than your traditional coverage.

What is short term car insurance coverage?

While typical car insurance policies last six months to one year and are often set up for automatic renewal after these time periods, temporary auto insurance provides the same amount of coverage for as little as one day to a month. Short term coverages provide the same protection as long term coverage, including liability, collision, uninsured or underinsured motorist, and medical payment for your passengers if your state requires it.

Temporary insurance is actually more of an umbrella term. There are many forms of and names for short term coverage that can be added to existing policies or stand in for a traditional policy. These typically include non-owners, renters, or gap insurance.

What is non-owners insurance?

A non-owner’s insurance policy is for those who don’t own a car, but occasionally find themselves borrowing someone else’s car. Fast Company recently released a study that found that within the last few years, car purchases made by young drivers decreased 30%. Less car owners can certainly mean less policyholders, so what is protecting these individuals and their borrowed cars? In the event of an at-fault accident, non-owners policies will provide liability for other’s medical bills and property damages. So whether you’re driving a friend’s car, a company car, or your estranged great aunt’s car you should never drive without coverage if you still want to be considered friends and family.

What is rental car insurance?

You may be unclear on what exactly your own insurance covers and what it doesn’t when it comes to your rental car. Or you might not have your own car insurance and you’re wondering how to protect yourself if you need to rent a car. Rental companies will give drivers the option to purchase insurance or additional coverages that include liability, loss-damage waiver, personal accident insurance, and personal effects. However, you don’t need to purchase these coverages directly from the rental company. A few insurance providers offer these exact coverages for renters.

What is gap insurance?

Gap, guaranteed asset protection, protects you in the event that your car is totaled and your insurance company will only pay you the amount your vehicle is worth at the time of the accident. Because you vehicle’s value depreciates the longer it’s been off the car lot (about $5,000 each year), you could be looking at a serious loss. Carinsurance.org recommended adding gap insurance to your policy if you put down less than 20% on your car’s cost and financed it for 5 years or longer.

Different states and insurance providers may offer other kinds of short term coverage to purchase or add onto an existing policy. To make sure you aren’t missing any coverage you may need, call your current insurance agent or research online.

When to buy temporary car insurance:

Driving a vehicle without auto insurance is illegal throughout the U.S. If you’re caught by an official operating a vehicle without insurance you’ll be bombarded with expensive fines, points on your driver’s license that could lead to suspension, and higher premium rates when you do finally apply for an insurance policy due to the legal strikes against your driving record. The legal and financial complications don’t stop there. If you were to get into an accident during your lapse in coverage, you and the other driver (if you live in an at-fault state) involved could be paying for medical bills and property damage expenses out of pocket for years.

Therefore, you should never be driving while there’s a lapse in your insurance coverage. If you’re expecting a lapse lasting 30 days or more, you should invest in a short term insurance policy. Lapses could occur in all kinds of situations, consider short term coverage if:

  • You’re in between policies
  • You’re driving a rental car
  • You’re borrowing a friend or relative’s car for a short period of time while your vehicle is in the repair shop or you’re in between vehicles
  • House guests need to drive a car for the short period of time that they’ll be visiting
  • You’re going to own the vehicle for a short period of time
  • Your vehicle will be in storage and needs protection
  • Your vehicle will soon be sold
  • You’re selling your vehicle and want to cover test drivers
  • You want immediate coverage when driving a new car off the lot
  • You’re a college student returning home for break and need a car
  • If you’re using a moving van and want coverage
  • You assume you’ll be covered by your friend’s, spouse’s, or company’s policy

Who can get temporary car insurance?

You may find it difficult to find a provider to sell you short term coverage if you don’t meet the following requirements

  • You’re over 21 years of age
  • You’ve had a valid driver’s license for at least 1 year
  • You have no more than 6 penalty points in the past 3 years
  • You have no more than 1 at-fault accident in the past 3 years

How much does temporary car insurance cost?

Although your policy will be short, you shouldn’t assume that your bills will be short as well. Your provider will still take multiple factors into consideration to determine your premium price, such as your location and car make and model. Many have found that short term coverage is priced much higher than long term. Although the high cost may put you off at first, keep in mind that you’re only paying for coverage and time based on your personal needs, so you’ll be saving money in the long run compared to what you’d be spending on a long term policy.

You want to get on the road as quickly as possible and you won’t have this policy for long, but that doesn’t mean you should commit to the first policy you see. Not only could you end up spending more than necessary, you might not even be getting the coverage you need. Before you start shopping, have an idea of what kind of coverages you’ll need by researching add-ons like collision, theft, fire, vandalism, high value vehicle, and roadside assistance. Start shopping on a quote comparison site, like Insurify.com, that allows you to customize, build, and compare premium quotes from a handful of different providers. Even if you compare just five providers, you’re more likely to get a better deal.

Avatar
Micaela Allen is a Boston-based writer and editor. Over the years, she has written over 100 original pieces for Insurify, focusing on trends in the insurance industry and financial advice for young and uninsured drivers. Micaela is an alumna of Northeastern University, where she majored in English.