Temporary Car Insurance: Do I Need It?

The auto insurance industry, like many other service industries, is skilled at meeting the specific needs of drivers. So it is with temporary vehicle insurance, which offers exactly what it says: temporary auto insurance for an hour or two up to a few weeks.

"Temporary car insurance refers to short-term car insurance that covers you for driving someone else's car for one hour to 28-to-30 days, though some policies may extend up to 90 days," explained Nick Schrader, an insurance agent with Texas General Insurance.

"Temporary auto insurance is designed for uninsured drivers who are renting or borrowing a car for a short period of time." It is generally intended for personal use by policyholders rather than commercial use."

Most major insurance companies do not provide temporary auto insurance because traditional policies typically last six months to a year. In general, major auto insurers do not provide temporary car insurance because the policy underwriting risk over a four-week period, for example, cancels any benefits from selling short-term auto insurance policies.

As a result, consumers should always thoroughly vet any company that provides temporary auto insurance. While many insurers are honest, short-term auto insurance customers may come across some that are not so trustworthy, charging high fees and providing poor customer service.

Why Would I Need Temporary Car Insurance?

Why would a driver require short-term auto insurance? Actually, short-term vehicle coverage is useful for a variety of reasons. "For example, if you're renting a car for a short period of time, you might not want to buy an annual policy that covers the entire rental period," said Linda Chavez, founder of Seniors Life Insurance Finder in California. "Alternatively, if you borrow a car from a friend, you may only require coverage for the time you are driving the vehicle."

Another reason why temporary auto insurance may be required is when you go on a trip or vacation that requires some driving. "In this case, you probably only need coverage for the days you'll be driving," Chavez explained. "Finally, if you require classic car insurance or other valuable vehicle policies, you may only drive it on occasion and may not wish to pay for an annual policy that covers the entire year."

How Much Does Short Term Auto Insurance Cost?

Aside from convenience, temporary car insurance has a few other advantages. "First and foremost, it can be much less expensive than an annual auto policy, at around $100-$200 or so for a policy," Chavez explained. "Because you're only paying for the time you need coverage, rather than for the entire year."

Another advantage is that temporary insurance is typically easier to obtain than annual auto insurance coverage. "Most insurers will not require a credit check or other lengthy application process with temporary car insurance," Chavez said. "In addition, you can often get temporary car insurance online with just a few clicks of a button."

Temporary car insurance may also provide what most car insurance customers want: peace of mind. "If you are in an accident, you will not have to pay for another driver's repairs or medical bills out of your own pocket," Chavez added. "You will also not have to pay for a replacement vehicle if your car is stolen or vandalized."

Making Temporary Auto Insurance Work for You

Short-term auto insurance is a streamlined version of car insurance coverage. While temporary insurance provides basic liability coverage, which pays for damage to other vehicles or property caused by your vehicle, it does not cover any injuries sustained by the policy holder or damage to the policy holder's own vehicle.

"If you cause an accident, temporary car insurance covers the other party's injuries and property damage costs," said Aliza Vigderman, director of content at AutoInsurance.com. "Liability coverage is made up of these coverages, bodily injury and property damage coverage."

"However, temporary car insurance excludes collision and comprehensive coverage, which cover the damages to your vehicle, as well as uninsured motorist coverage and medical payments coverage, which cover the injuries to you and your passengers," Vigderman explained.

The good news is that temporary car insurance can be used as a "on-demand" car insurance model. "With temporary auto insurance, you can get a policy quickly and answer fewer questions," Schrader explained. "Coverage can begin immediately or when needed." Furthermore, the relatively short duration of coverage makes temporary car insurance less expensive than any other policy."

Short-Term Auto Insurance: Tips for Drivers

There are several options for obtaining the best temporary auto insurance policy. "Compare shopping is the best way to determine which provider offers the best policies," Schrader says. "Simply select the amount of coverage you require and then identify your requirements." Some insurance companies charge a cancellation fee, while others cancel immediately."

Also, before signing on the dotted line, carefully read the terms and conditions of each policy. "This way, you'll know exactly what's covered and what isn't," Chavez explained. "Finally, before you buy the policy, ask your insurer any questions you have about it." By doing so, you can ensure that you are getting the coverage you require at an affordable price."

Drivers looking for short-term coverage may want to consider auto rental insurance, which is a better option offered by many reputable companies. "If your current car insurance policy covers your rental car, that's a better option than getting a separate, temporary policy," Vigderman says. "Other preferable options include permissive use on another policy, non-owner insurance, or pay-per-mile insurance."

What is your best option for temporary auto insurance? Get multiple quotes for temporary insurance coverage from a local and trusted insurance agent. Working with someone who can provide you with the precise short-term auto coverage you require can provide you with the best of both worlds: a good temporary auto insurance policy at a reasonable price, as well as the peace of mind that comes with solid auto insurance coverage.