Temporary auto insurance can be a tricky prospect and doesn’t always work out as customers expect. It is possible to get temporary auto insurance if you are careful and understand the process. In many cases, traditional auto insurance policies might not be feasible. These situations are where one-week auto insurance is a good option. It can reduce the commitment and help you save money.
Although temporary car insurance is possible, it’s not usually offered by larger auto insurance companies. Some alternatives might work if short-term car insurance isn’t possible or makes no sense.
Temporary auto insurance explained
Temporary policies for auto insurance are usually shorter than the six-month-to-one-year options. It is rare for established and larger auto insurance companies that write policies that are less than six months. The insurance company’s profit to risk ratio will be lower the shorter the policy.
Imagine you can get a policy for your car for two months with $50,000 property damage coverage. Even though you may pay a few hundred a month, the premiums will still be less than $1,000. You cause an accident, and you do $45,000 in property damage within the last week of your policy. The insurance company has lost $45,000 and made less than $1,000.
It is easy to understand why businesses would refuse such a large financial commitment. These risks aside, there are some companies that offer short-term auto insurance. However, the premiums tend to be higher than for traditional length policies.
Why short-term car insurance is important
A temporary policy of car insurance can be beneficial in many cases. Short term car insurance is a necessity for everyone, from students returning home for summer to vacationing families. There are alternatives, however, such as rental insurance or adding to an existing policy.
Borrowing a vehicle
The owner’s insurance might cover you if you borrow a car. This is not an assurance and should not be relied on. To find out if you are covered, first check with your policy. You may be able to get temporary auto insurance if you are not covered by the owner’s policy. A non-owner policy could also be an option.
You can rent a car
A liability policy may be included with a rental vehicle. Usually, however, renters will need to have at least the minimum liability insurance for the vehicle. Although this can be done via a rental company, it may be cheaper to purchase directly from an insurer.
Students
Students from college are usually only home for a few months. They will most likely use one of their family vehicles during that time. This may not be necessary depending on the policy. However, it is possible. Your policy may not cover college students who are home during the summer. They will either need temporary car insurance or be added to it.
Storing the vehicle
Although storing a car in storage reduces the chance of it being involved in a collision, the vehicle can still be damaged by weather, vandalism and other factors. Some people choose to buy temporary comprehensive auto insurance for their cars while they’re stored.
Driving test
Students who are learning to drive often require a vehicle for just one day in order to pass their driving test. Auto insurance may be available depending on the origin of the vehicle. Auto insurance may be required for students who do not have it. Proof of insurance is a requirement for passing a driving test. Sometimes driving schools will offer short-term auto insurance to students.
Vacation
Short term car insurance is a good option, whether you are using your car temporarily while on vacation or keeping it at home. Comprehensive coverage is available for vehicles that are stored, as mentioned previously. A temporary vehicle that is used for vacation purposes will also need to be covered by the minimum auto insurance required by the state.
What temporary car insurance covers?
In theory, short term car insurance can cover almost everything that a traditional policy could. Short term car insurance can cover almost everything that conventional car insurance cannot. This is because it covers only the duration, not the coverage. These are the most popular types of temporary car insurance coverages.
- Liability: Insurance coverage can be broken down into property damage and bodily injury coverage. Bodily injury pays for the medical expenses of other people who are injured in an accident involving your vehicle. If you are found to be at fault, property damage will cover the cost of repairs and replacement of the property of others that has been damaged in an accident.
- Collision Insurance: collision insurance covers the costs of repairs or replacement of your car if you are involved in an accident. This applies only if the vehicle was in use at the time of the accident.
- Comprehensive: Comprehensive Insurance covers repairs and replacements of your car, if it is damaged or stolen while you are not driving it. It can also cover collision insurance for similar damages. The two policies do not overlap as one (collision), requires that the vehicle be in use, while the other (comprehensive), requires that it not be used during the incident.
- Uninsured motorist These policies provide coverage for your liability if you are at-fault in an accident with another driver and you are uninsured.
Most Frequently Asked Questions
Which is the best auto insurance company?
Every person is unique and will need to find the right car insurance company. Many factors, including the driver’s driving record and car type, play an important role in choosing the right policy and company. The Bankrate guide to the Best Car Insurance Companies will help you find the right arrangement for you.
What is the cost of temporary car insurance?
Price ranges can be quite varied depending on many factors. Factors such as driver age, driving record, credit scores, and other factors all play a role in pricing. Different companies may charge different rates for different coverage options. However, short-term car insurance tends to have higher premiums than traditional length policies.
How will temporary car insurance affect my future insurance rates?
In general, no. You can be charged with rate increases if you are found driving without auto insurance. However, temporary car insurance won’t affect your future premiums.
