What Is Temporary Car Insurance?
Temporary car insurance policies do not really exist, but there are other ways to get short term coverage. The best way to get coverage for a short period is to purchase a six-month policy, a non-owner policy, or a pay-per-mile policy and then cancel it when you no longer need the coverage.
Key Things to Know About Temporary Car Insurance
- Insurance companies usually sell car insurance in 6- or 12-month increments, but you can cancel your coverage mid-policy.
- If you need temporary coverage but don’t own a vehicle, you can purchase a non-owner policy or rental car insurance.
- You don’t need your own insurance to borrow a friend’s car, as most standard policies cover permissive use of the vehicle by other drivers.
Temporary Car Insurance Alternatives
1. Standard Car Insurance
You need a standard car insurance policy if you own the car you’re driving, even if you don’t plan to drive it for the full 6- to 12-month policy period. You can cancel the policy once you no longer need coverage, though you may have to pay a cancellation fee.
Standard car insurance policies are also the best choice if you’re a college student and your car is at home. In fact, many insurers offer distant student discounts, or you may be able to lower your coverage limits for a while.
When to Consider Standard Car Insurance:
- You are purchasing a car for a short period of time.
- You are a college student and will only be driving when you’re home.
2. Non-Owner Car Insurance
Non-owner insurance covers people who do not own a vehicle if they drive rented or borrowed cars. Since you’re only covering yourself and not a specific vehicle, non-owner insurance costs less than a standard insurance policy. And since auto insurance companies generally charge less if you’ve been continuously insured, having a non-owner policy can help lower your rates in the long run.
Non-owner policies are also a good way to provide additional coverage if you use carsharing services like Zipcar. Plus, non-owner coverage is your best bet if you’re going to borrow or rent a car for an extended period, such as a long vacation.
When to Consider Non-Owner Coverage:
- 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 temporarily driving an insured car but want supplemental coverage in addition to the owner’s insurance.
- You want coverage beyond a carsharing company’s insurance.
3. Pay-Per-Mile Insurance
Pay-per-mile insurance is a great option for people who don’t drive frequently, such as retirees, people who work from home, students, and occasional commuters. Pay-per-mile insurers like Metromile charge drivers a base rate for coverage, plus a small fee per mile driven. If you take a longer trip, the company will cap your miles and won’t charge you for distances beyond that cap.
On the other hand, if a pay-per-mile policy isn’t the right choice for you, ask your current insurer if they offer low-mileage discounts.
When to Consider Pay-Per-Mile Insurance:
- You only drive once a week or on the weekends.
- Driving is not your primary mode of transportation, but you still own a car and drive it occasionally.
4. Rental Car Insurance
Most personal auto policies cover the policyholder and other named drivers when they are driving a rental car, though there may be exceptions for business use, international travel, and unusual vehicles. If you don’t have a personal policy or your existing coverage will not cover you, you can purchase rental car insurance.
Rental car companies offer insurance at the counter or when you book the car online, but you should also consider third-party rental car insurance. If you’re renting a car internationally, be sure to clarify with the insurer or the rental company whether you will be covered in that country.
When You Might Need to Buy Rental Car Insurance:
- You are renting a car for an extended period.
- You need coverage while on vacation or on a business trip.
5. Take Advantage of Permissive Use
Nearly every car insurance policy covers permissive use, or the occasional use of the insured vehicle by a licensed driver who is not named on the policy. As a result, temporary car insurance is probably unnecessary if you are briefly borrowing another person’s car. To find out whether a policy covers permissive use, the policyholder can check their policy details or contact the insurance company.
Situations When Permissive Use Applies:
- A friend needs to borrow your car for the day, or vice versa.
- You are going on a road trip and will be taking turns driving.
6. Add a Named Driver to Your Policy
If you own a vehicle, you might be able to add another driver to your policy to give them temporary coverage if they plan to use your car regularly. Most insurance companies require every licensed driver in the household to be listed on a car insurance policy, though there may be exceptions for unrelated roommates.
Similarly, most insurers will require you to add any drivers who do not live with you but who use your vehicle frequently, such as caregivers. So, if someone will be using your vehicle for an extended period of time, contact your insurance company to update the drivers listed on your policy.
When You Might Need to Add a Named Driver:
- A relative is visiting you for an extended period and will be driving your car.
- An au pair, nanny, housekeeper, or caregiver is moving in with you for a while.
Tips for Purchasing Temporary Car Insurance
Ask your insurer about cancellation fees.
Some insurers charge cancellation fees of around 10% of your premium, but it varies widely by company and even by state. So, it’s a good idea to research your insurer’s cancellation fee in advance. In some cases, it’s worth paying a small fee in order to avoid the expense of future premiums. But if you’re shopping around for a policy that you intend to cancel, fees are important to consider.
Communicate with your insurer if you have questions about a specific situation.
Your own insurance company is often the best resource if you have questions about your coverage. For example, some insurers offer special policies for temporarily putting a car in storage. Your insurance company can also tell you if your policy covers rented or borrowed vehicles.
Consider all your coverage options.
Even though temporary car insurance doesn’t really exist, there are still plenty of substitutes to choose from. When you’re deciding what kind of coverage you need, make sure to take into account how much coverage you’re getting, not just price. For instance, a non-owner policy provides more coverage than simply relying on a friend’s policy or even the insurance provided by most carsharing companies.
Don’t fall for scams.
Insurance companies that advertise temporary car insurance online are likely to be fraudulent. If you think a company might be legitimate, check with your state’s insurance regulator to determine whether they are licensed to sell insurance, including temporary policies.