Temporary car insurance: What it is and how to get it

Woman driving a carImage: Woman driving a car

In a Nutshell

Car insurance policies are typically sold in six-month and one-year increments. Temporary car insurance describes coverage that lasts less than six months and may be an ideal fit in certain circumstances.
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If you need to drive a vehicle for a short period, you may be thinking about getting temporary car insurance.

Major insurers typically don’t package temporary car insurance as a separate policy type. But options are available if you’re looking for car insurance coverage spanning less than six months.

This type of coverage may be valuable in certain situations. For example, maybe you don’t typically drive when you’re at home but are planning to drive on a visit somewhere else. Read on to learn about temporary car insurance.

What is temporary car insurance?

If you find auto insurance companies offering shorter-term policies — such as daily or weekly coverage — be sure to do your research. This offer could be a scam or might not provide sufficient coverage for your needs.

Even though major insurers don’t typically offer policies with terms less than six months, you can still get short-term coverage from these providers. The solution is to purchase six-month coverage and then cancel the policy when you no longer need it. According to the online resource autoinsurance.org, once you cancel the policy, you may be eligible for a refund if you’ve paid for unused coverage. But you may have to pay a cancellation fee.

Other temporary car insurance options

Buying a standard policy and canceling it early isn’t your only option if you’re looking for temporary car insurance. Here are a few additional avenues to consider.

Non-owner car insurance

In certain circumstances, you may need to drive a car you don’t own for a short time. Non-owner car insurance could be an ideal fit in these situations.

Non-owner auto insurance is like standard insurance coverage, but it covers you when driving someone else’s car. So, for example, you can use it for coverage when renting a car or driving a friend’s vehicle.

A non-owner car insurance policy can include …

  • A policy that covers a borrowed vehicle
  • Insurance that pays for some portion of the damage to a vehicle used in car-sharing services
  • An SR-22 certificate of insurance to prove state-mandated minimum coverage if your driver’s license was suspended for something like a DUI

As a bonus, non-owners car insurance can be less expensive than a standard auto insurance policy.

Rental car insurance

Does your driving routine involve a rental car? If so, rental car insurance is an option to consider. Consumers can generally choose from the following coverages when renting from traditional rental car companies:

  • Personal accident insurance — Covers the driver and passengers for medical and ambulance costs if involved in a car accident.
  • Personal effects coverage — This option will foot the bill for the theft of personal items from a rental car.
  • Liability — People who don’t own cars who frequently use rental cars for transportation may need this coverage to drive legally.
  • Loss damage waiver — Not technically an insurance product, this coverage is also known as a collision damage waiver and relieves the driver of financial responsibility if the rental car is stolen or damaged.

It’s crucial to understand that if your personal car is already insured with state-minimum coverage mandated by law, those same coverage limits are valid for your rental car in many cases. Check the details on your credit card, too. Though credit card insurance benefits are usually secondary (or accessed after your primary insurance through a personal or rental car policy), it can provide some coverage when you pay with the card at checkout.

Pay-per-mile car insurance

Pay-per-mile insurance, also known as pay as you go, may be a suitable option if you need coverage to protect you during occasional driving. It allows you to maintain consistent coverage while limiting premium costs.

Pay-per-mile car insurance caters to low-mileage drivers and is a usage-based insurance model that can calculate your monthly premium based on how much you drive each month.

Insurers can define pay-per-mile insurance in different ways. Some use a telematics device you’ll install in your vehicle so they can monitor driving behavior. Others require you to connect your smartphone, while some companies simply factor in the number of miles you drive.

Nationwide’s SmartMiles program, for example, calculates monthly premiums by combining a flat monthly rate with a rate based on the number of miles you drive.

  1. A flat base rate that you pay every month regardless of mileage
  2. A per-mile rate, where the total amount paid will depend on your mileage during a given month

Pay-per-mile coverage differs from other types of temporary car insurance because it’s mileage-based and set up like a traditional auto insurance policy. This type of insurance may not be the best fit if you plan to log a lot of miles during your coverage period.

Permissive use

There’s a specific option to consider if you’re sporadically driving a car owned and insured by someone else. Perhaps you’re caring for someone with health issues or volunteering your time.

According to autoinsurance.org, a permissive user can be authorized to drive a car by the insured user, even if they are unrelated and live in separate households. That permission comes with insurance coverage. But not all car insurance companies allow permissive user status, and if they do, coverage may be limited.

Keep in mind that for permissive use to apply, you need consent from the policyholder to drive the vehicle. If you have an accident while driving the car, it may cause the insured’s insurance rate to increase.

When would you need temporary car insurance?

Here are some common scenarios in which you may need temporary car insurance.

Scenario No. 1: You own a car but do very little driving. However, you want insurance coverage for occasional driving and emergencies. 

Coverage option: Pay-per-mile insurance may be a good bet in this situation since it provides consistent protection that’s mileage-based.

Scenario No. 2: You’re on vacation for a weekend and plan to rent a car to see the sights.

Coverage option: Rental car insurance can be a good option in this situation if you don’t have personal insurance. You can typically purchase this coverage from the rental car agency.

Scenario No. 3: You often run errands for a friend and don’t have a car of your own. You plan on using your insured friend’s car to go to the grocery store or pharmacy a few times a week.

Coverage option: If you’re using an insured person’s vehicle sporadically with express consent, the driver’s policy may cover you via permissive use if you meet specific qualifications.

Things to keep in mind when searching for temporary car insurance

Here are some things to consider when looking for temporary car insurance.

  • Evaluate all coverage options. Look at all relevant coverage options when deciding which type of temporary car insurance to purchase. Some options may be more expensive than others. Weigh all pertinent factors when deciding.
  • Don’t forget about cancellation fees. If you plan to purchase non-owner car insurance or a standard policy and cancel it early, you may have to pay a cancellation fee. Find out what these fees are before selecting a course of action.
  • Be transparent. If you have concerns about whether your coverage is suitable, convey them to your insurance company before signing on the dotted line.

About the author: Warren Clarke is a writer whose work has been published by Edmunds.com and the New York Daily News. He enjoys providing readers with information that can make their lives happier and more expansive. Warren holds a Bac… Read more.