Month-to-month car insurance is not offered by any reputable insurance company. Month-to-month insurance typically refers to an auto policy that provides coverage for one month at a time, not a six or 12-month policy that is paid for in monthly installments. But because truly temporary car insurance doesn’t exist, standard policies with monthly premiums are actually a more realistic form of month-to-month insurance.
Why Insurers Do Not Offer Month-to-Month Car Insurance
Month-to-month car insurance is not available from any reputable insurer because of the potential losses that come with it. Drivers who need short-term insurance are considered to be high-risk, meaning they’re more likely to file a claim than those with standard insurance.
In addition, drivers in this demographic likely won’t become long-term customers, and insurance companies won’t be able to recoup the cost of a claim from a one-month premium.
When Month-to-Month Car Insurance Would Be Useful
- You are temporarily driving an insured car but want coverage to supplement the owner’s insurance.
- You plan to frequently drive rental cars within the next few months and don’t want to pay high fees for rental car insurance.
- You are purchasing a car for a short period of time.
- You are a seasonal employee and your work requires you to drive.
- You want to drive for a rideshare service but don’t own a car yet.
Alternatives to Month-to-Month Car Insurance
Usage-based insurance, or pay-per-mile coverage, is a great option for drivers who will only need car insurance for a few months. Insurers like Metromile charge a base rate for coverage, then determine additional costs based on how many miles you drive. Additionally, some standard insurers like National General offer usage-based discounts to policyholders who only drive a few thousand miles annually.
Non-Owner Car Insurance
A non-owner policy covers you when you’re driving any car that you don’t own, and since it does not apply to a specific vehicle, it’s an affordable alternative to standard car insurance. However, it’s important to know that you cannot purchase non-owner insurance if you own a car or live with someone who does.
Paying Your Car Insurance Monthly
If you think you’ll only need a car insurance policy for a few months, you can purchase a standard six or 12-month policy and pay monthly instead of in-full upfront. Once you no longer need the policy, you can cancel it. You should receive a refund for any unused policy time that you already paid for, but keep in mind that your insurer may charge a cancellation fee.
For drivers who choose to go this route, the monthly cost of coverage depends heavily on which state they live in.
Average Monthly Car Insurance Cost by State
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