What Is Short-Term Car Insurance? All You Need To Know About It

what is short-term car insurance temporary vehicle coverage policy

Auto insurance is an essential part of driving any car. With millions of car accidents every year in the US, auto insurance policies are absolutely necessary to ensure that you can afford and get medical treatment and fix your car. 

But since the car insurance market is so vast, there is a lot of confusion regarding many aspects of auto insurance policies. One of the most common things people want to know about is “short-term” car insurance. Does something like this actually exist? 

People need to be very careful while researching short-term auto insurance policies or buying one. You might get lured into false advertisement or worse, into a scam resulting in you losing a lot of money. So here is everything you need to know about short-term car insurance. 

What Is Short-Term Car Insurance? 

Before we tell you anything about short-term car insurance, we must ask this; Does something like short-term car insurance exist? As the name suggests, short-term car insurance are auto insurance policies that are valid for a shorter period of time. 

How short? This depends on what the company offers. There are some that are valid for six-months, some are for three months, some for one month, and we have seen some companies offering auto insurance policies valid only for a day! Why would someone need auto insurance policies for just a day? 

Need For Short-Term Car Insurance 

There are many reasons why someone would want to have auto insurance policies for a short period of time. Car insurance policies are long term investments. People buy these policies for at least one to two years, going as high as ten years. This is because as long as people own and operate a car, they’ll need some auto insurance policies. 

But there are cases when someone might not own a car but needs to drive either rental cars or a friend's car regularly. You might have moved to a new place and plan on staying only for a month or two. This would require you to get an auto insurance policy, but only for a few months. 

Should You Get Short-Term Car Insurance? 

Now the question comes, should you get short-term car insurance policies? The answer to that is no, because even if you wanted to, you cannot get it. This is because no major car insurance company offers short-term car insurance. 

Almost all the car insurance companies offer their policy for either 1 year or 6-months period at the least. So if you are looking for anything lower than 6 months, you are out of luck. 6 months is the best you can get. 

But then what about all those different ads you might have seen of auto insurance policies being offered for just one or two months? The legitimacy of these companies and the plans they offer is dubious, and it is very likely that either these are scams or just basic insurance plans by insurance agents at a very inflated price. 

So if you get these policies, either some insurance agent would get the basic 6-month auto insurance and then sell you that at a very high price. This is not a problem in itself, but what’s the point of paying too much when you can get a better deal yourself. 

Why Auto Insurance Companies Do Not Offer Short-Term Insurance 

You might be thinking why is it that no major car insurance company offers short-term car insurance policies? There are people who want these policies for only a few months. So why aren’t there any temporary insurance policies available for them to buy? 

Car insurance companies cannot offer short-term insurance because this increases the risk factor by a big margin, while preventing them from making any money. Let’s say that someone buys car insurance for just two months and then crashes the car, claims the insurance. 

If the insurance premium the policyholder was paying was $200 per month, the insurance company got $600. But the insurance company lost $1,500 in the claim. Since your policy period is over, there is not a single penny they will get from the policyholder. 

Normal auto insurance companies make money in the long run as the policyholder must pay the premiums for at least 6 months or even one year.  But anything lower than that is high-risk and car insurance companies steer clear from that. So what is the solution to short term auto insurance policy coverage needs? 

Non-Owners Car Insurance 

If you are looking for short-term insurance policies and do not have your own car, then the best option to choose would be non-owners car insurance policy. These policies are meant for people who do not own a car and either drive a rental car or someone else’s car. 

Non-owners car insurance offers the basic coverage; since liability coverage is mandatory, most of these car insurance policies just have liability policy. But in states where personal injury protection plan and/or uninsured motorist coverage is also required, the insurance company might also include these policies in the plan. 

Since these policies just come with mandatory insurance coverages, these plans do not include other optional coverages like collision damage waiver or comprehensive insurance. So if you are driving a rental car, the rental company will require you to get collision and comprehensive coverage from them. 

If you are driving a friend’s car or even a family member’s car, then there are some important things you need to do. Since you do not have collision coverage, in case you get in an accident, the car owner’s collision coverage will cover the cost of the repairs. 

But here is the catch; if you are driving their car on a regular basis, you need to be added as a registered driver in their policy. If you are not, the insurance company can and will reject the claim. Adding a driver in someone’s policy will increase premium rates. If you are a resident of Indiana, look for the cheapest auto insurance quote in Indiana to save money on car insurance policies.

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