Sometimes getting a car insurance policy for a full year just isn’t a good fit for your needs. There are a number of scenarios in which you’d be better off with a shorter (and MUCH more affordable) policy.
A temporary auto insurance policy isn’t easy to find, but there are several ways you can still get the coverage you’re looking for.
What is temporary car insurance?
There are many ways to get the results of a temporary car insurance policy, depending on your situation. Most insurers require a minimum six-month auto policy. You may often see websites that advertise short-term coverage, but these are usually lead magnets trying to get your contact information in order to sell you regular car insurance.
While there is no specific “temporary car insurance” you can directly apply for, you can instead navigate certain add-ons and features to get the coverage you need for the perfect amount of time.
Who needs temporary car insurance?
A temporary car insurance policy can help you in a variety of different scenarios. Here are some situations that may apply, plus the best type of temporary insurance for each one.
You’re driving out of the country
Your primary auto insurance may not extend beyond the U.S. border, depending on your policy. So if you plan on driving to Canada or Mexico, you may need short-term international car insurance.
Check your current policy for your exact destination country. Some insurers may let your U.S. policy cover you in Canada, but not Mexico. You can get coverage on a daily basis for short visits across the border, or an extended policy if you plan to be there for several months.
You’re home from college and driving during break
Temporary car insurance could be a way to save money if you don’t drive a car while at college, but do when you’re home on breaks.
Since young drivers can be expensive to insure on their parents’ policies, there’s the potential for a lot of savings. Your parents can temporarily suspend you from their policy while you’re away at school, then add you back when you’re home and driving again.
Your friend is borrowing your car
A temporary car insurance policy isn’t necessary when a friend borrows your car for an afternoon. But it can be useful if you have a friend or relative who uses your vehicle on a regular basis, like a babysitter who picks up your kids from daycare a few days a week.
Rather than purchasing a separate auto policy, you can simply add the individual to your existing policy. Your premium may be impacted depending on their driving history. You can always remove them once they stop using your car.
You’re renting a car for business
When getting a rental car for personal use, you can typically get covered either by your personal policy or by your credit card (you can also get covered by rental car insurance, but that’s not always the most affordable option).
Unfortunately, your personal standard car insurance or credit card resources often end when you’re renting a car for business purposes.
If you work for a company, find out what kind of coverage they offer. If there’s no coverage available or you run your own business, call your insurer to get a temporary car insurance policy for commercial use.
You’re starting a rideshare side hustle
Using your car for a ridesharing business through a company like Lyft or Uber may require additional insurance beyond your standard auto insurance policy. That’s because you’re using your vehicle for commercial purposes rather than personal use.
Depending on the insurer, you could replace your current policy with one that includes ridesharing coverage so you only have one premium to pay. Also, check your state laws to see if there are specific coverage requirements for rideshare drivers.
You’re placing your car in long-term storage
Even with a car in storage, you still need to maintain some type of insurance on it. If you won’t be driving the car at all, you could potentially remove your collision coverage and only keep your comprehensive coverage. That protects you from damage or theft.
However, if you have an auto loan on the vehicle, you may need to maintain a certain threshold of coverage regardless of whether or not your car is in storage.
You’re buying a car for a short period of time
If you buy a car for a short period of time and plan to resell it soon, you probably don’t want to purchase an annual policy. If you have another car, try temporarily adding the new car to the same insurer’s plan so you can enjoy a multi-policy discount.
Pros and cons of temporary car insurance
The benefits and drawbacks of temporary car insurance can help you decide if it’s right for you.
Pros:
- Pay for the right level of insurance. There are situations when getting a standard auto insurance policy would mean paying for more coverage than you actually need. Finding the right temporary car insurance strategy keeps you covered without overpaying.
- Work through your insurance provider. Your current insurer could offer a discount for the coverage you’re looking for, whether it’s temporarily adding another person to your policy or extending your coverage to travel in Mexico or Canada.
Cons:
- Limited options for a straightforward temporary car insurance policy. It’s hard to find typical coverage for less than six months. You’ll need to choose a strategy to meet your specific needs rather than searching for a policy that lasts a short period of time.
- Canceling early could cost you. If you end up taking out a six-month or one-year policy and then canceling it, you could lose a chunk of change. Insurers usually require at least a month’s down payment. By canceling your policy before then, you’ll forfeit that cash.
- A grace period could limit your coverage. It’s also difficult to use a new standard policy in the short-term because insurers tend to limit your ability to make claims for the first 30 days.
How to get temporary car insurance
Depending on your reason for getting temporary car insurance, search insurers for some of all of the following features.
Determine cancellation fees
The easiest way to get temporary car insurance is to get a standard policy and then cancel it when you no longer need it. To do this, find a car insurance company that doesn’t have any cancellation fees. As long as the premium payments aren’t overpriced, you could save money and enjoy a policy on your preferred timeline.
Find out the cost of adding a driver
Start off by figuring out the type of temporary car insurance you need to help narrow your search. For instance, before you add a driver for a short period of time, compare quotes to find the insurer with the most cost-effective option.
Check for flexible international coverage
If you plan to drive your car to Canada or Mexico (or transport it overseas), compare policies to find coverage for your destination country. Some standard policies may already include coverage in Canada. Also, look for a policy with flexible timelines so you’re not paying for more than you need.
Compare multi-car discounts
Look for insurers that let you add a car to an existing auto insurance policy. This way you can drop that vehicle when you need to, without changing your original policy.
Assess rideshare coverage
Many major insurers offer rideshare insurance, but availability varies drastically by state. Don’t just search for providers offering this type of coverage. Make sure you enter your location details to find the most accurate listing of rideshare policies based on where you live.
Look at the reputation of the insurer
No matter what type of temporary car insurance you’re looking for, research the company’s reputation before moving forward. First, make sure they actually offer the type of short-term insurance policy you’re looking for. Some companies have set up websites advertising temporary car insurance, then simply use your contact information to try and sell you a six-month or one-year policy.
Also, look at customer satisfaction ratings. This gives you an idea of the claims process and how quickly you’ll get reimbursed when you actually use your policy.
Use an online comparison tool
Make the process easier on yourself by using an insurance comparison tool like Gabi. Gabi is an insurance broker licensed in all 50 states and you can search online for the exact coverage you’re looking for.
Temporary car insurance alternatives
If the options above don’t help with your situation, there are additional alternatives to temporary car insurance that you may consider.
Non-owner liability
Non-owner liability insurance is designed for individuals who don’t own a vehicle but need auto liability insurance coverage for a specific reason. A common situation is if you frequently rent cars or borrow someone else’s and want to protect yourself from the financial responsibility of any damages or injuries you cause with the car.
Another reason is if you’ve been convicted of a DUI and are required to file an SR-22 form with your state. Alternatively, if you recently sold your car and don’t want a lapse in coverage (which can lead to a higher premium later on), then a non-owner liability policy can keep your insurance active until you’re ready for a full policy. Non-owner liability is typically a little less expensive than a standard auto policy.
Usage-based car insurance
Getting a usage-based car insurance policy could save you money if you own a car but don’t drive frequently. The insurance company tracks your mileage through either your car’s telematics system or a separate device installed in your car. In most cases, you’re not penalized for excessive driving. Instead, you’re given a discount when you don’t drive a lot.
In addition to mileage, usage-based insurance also analyzes your other driving habits. Speed, acceleration, and braking may also be reviewed to determine if you qualify for any discounts. Consequently, this type of policy is ideal for people who don’t have a long commute and don’t have aggressive driving habits.
Long-term coverage and payment plan
If a temporary car insurance solution doesn’t work for your needs, consider taking out a regular auto insurance policy and canceling it when you don’t need it anymore. Make monthly payments rather than annual payments so you don’t have to worry about navigating the refund process. Also, check to see if there’s a fee for early cancellation. This may be charged by the insurance company and the broker, if you used one.
When replacing an old policy with a new one, aim for overlapping them by a day or two. This keeps you covered in case of any administrative hiccups on either end.
