Can I Get Short Term Car Insurance? (Temporary Car Insurance)

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quick highlights

The best car insurance companies don’t offer short term policies.

Buy a six month term, set up monthly payments, and cancel early if you need to.

If you have a college student in your home, shop with State Farm, All State or Mercury.

If you are borrowing a car, traveling into Mexico, or plan on selling a car that you inherited, you may be looking to buy car insurance for a short period of time.

As you probably already know, most insurance companies don’t do temporary car insurance.

These days a six-month policy is the standard. 

Of course, they allow you to spread out the premium due for those policies and pay monthly for them.

We all have varying needs for insurance, and there are ways to deal with short-term scenarios.

First, it’s beneficial to sort out what temporary car insurance is, and how it can work for you.

What is Short Term or Temporary Car Insurance?

There are a variety of short term needs that might require temporary car insurance.

Sometimes it’s for a month, a week, or even a day.

Most insurance companies will not sell you a policy that is shorter than six months.

Some companies claim they have temporary car insurance, but when you speak to an agent, they will still tell you it’s not possible for a term shorter than six months.

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Dodo Tips

If you know you are only going to need car insurance for a couple of months, just buy a six month policy and set up monthly payments by mail. When you no longer need the coverage, email your agent to cancel the policy and stop making payments. Voila! You have a short term insurance policy.

There are a very select few who will offer true short term car insurance with a month-to-month policy.

They are usually offered through agencies that are across the street from the DMV.

Most of their clientele rush in to get their proof of insurance so they can register their vehicle.

The month-to-month providers do come with some differences, so be sure to read the fine print.

They are typically not going to be the most user friendly short term car insurance companies.

So if you are looking for good customer service, don’t go with a temporary auto insurance company who is willing to give you a month to month policy term.

The difference with these month to month policies is the cancellation period.

With “normal” car insurance, the company isn’t going to cancel you immediately if you miss a payment due date.

For example, if you miss a payment on a regular 6-12 month policy, they usually give you a grace period of somewhere around 10 days to make a payment before they cancel your policy. 

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With month-to-month providers, they will cancel you the day after you miss the payment, there is no grace period.

The benefit to these month to month policies is the price. They tend to be a little less expensive than your standard policy.

The drawback is the type of car insurance company you are using to get this policy.

Going with a month to month, no cancelation grace period type insurer means you are going with a temporary car insurance company you probably haven’t heard of before.

Since your goal with buying insurance is to have a good price, with quality claims coverage, then going with a short term car insurance provider you’ve never even heard of might not be a good move for you.

Or maybe its a great move for you. Who am I to say?

I’m just your friendly insurance advisor, giving you the facts as I see them.

How Can I Get Temporary Car Insurance?

The first step is to determine what time-frame you’re looking for.

A day, a week, a month? Three months?

Start by getting quotes and comparing rates for Temporary car insurance.

Maybe you will find a month-by-month provider that you’re happy with, or maybe you’ll find that the only policies that work for you are the six month terms, and you can just cancel when you no longer need it.

Auto insurance companies don’t usually charge fees for cancelling. But some do.

If you prepaid for your policy, they’ll refund monthly premiums that aren’t going to be used.

The opposite is true, too.

If you decide to cancel after 3 months, but have paid only two, they will bill you for the remaining month.

Keep an eye on your account though, a common complaint against temporary auto insurance companies is payments coming out even after cancelling.

If you anticipate only needing the policy for a short while, just avoid automatic debit from your bank account and have them mail or email you the bill every month.

Comparison quotes are quick, easy, and free!

When Should I Use Short Term Auto Insurance?

There are many reasons someone might need temporary auto insurance.

Instead of looking for a month-to-month policy, your insurance company may already cover what you’re looking for. 

Lending Your Car to a Friend?

Some short term auto insurance companies will cover permissive users automatically.

These tend to be the big name insurance companies.

Others will only provide the state mandated minimum limits of liability to them.

I’ve heard Farmers is one of these companies. They only pay the minimum required by state law if your friend causes an accident while driving your car.

This is typically a hidden reduction in coverage, so you should ask your agent about it when shopping for quotes.

Most states have really low minimum required limits. For example, California only requires:

$15,000 per person bodily injury coverage

$30,000 per accident in bodily injury coverage

$5,000 in property damage

These limits would not go very far in anything more than a minor collision accident.

Dodo Definitions

Permissive User:

These are people you allow to drive your car. They are permitted by you to have access to it with your knowledge. Hence, the term “permissive”.

If you have a good car insurance policy and your friend borrows the car, you don’t need to add insurance for them, since they’re covered by the permissive user clause under your own insurance policy.

However, if they are going to be driving your car regularly, you can temporarily add them to your own insurance.

If your friend has a bad driving record, you could pay more by adding them to your policy.

So ask them if they’ve had any tickets or were responsible for any accidents in the past three years.

If they are clean, then you can add them.

Short Term Auto Insurance for Student Drivers?

State Farm, All State, and Mercury all provide discounts for policyholders with students away at college.

They will require your child to attend a school that is at least 80 or 100 miles from home.

This is far enough that they probably will stay at school for the semester and not be home every weekend.

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Don't Make this Dodo Mistake

Watch out for this mistake!

Don’t try to add and delete your kid from your policy as when they come home on break and then leave again at the start of the next term. You could forget to add them back on the policy. If it means that much, just find a car insurance company who gives the “away at school” discount.

Are You Renting a Car?

Personally, I use the “belt and suspenders” approach to insurance when renting a car.

That means I use a combo of my own car insurance and the insurance the rental company offers.

This will eliminate the coverage gaps.

tips for success!

Dodo Tips

If you want a “no worries” experience when renting a car. Buy the physical damage coverage for it from the rental company. This will cover 100% of the damages and also the loss of use they may try and charge you if the car requires extended repairs after an accident.

The biggest coverage gap you will find in using your own policy to cover a rental car is the “loss of use” coverage.

Think about it from the rental car company’s perspective.

They use each car as a revenue source for their business.

If one is out of commission for an extended period because you wrecked it, they will want to be compensated for that loss of income.

Try reading through their rental agreement. You will probably find a clause relating to loss of use.

The only way around this is to get their insurance for Comprehensive and Collision.

Your car insurance policy might already have good coverage for rental cars.

The biggest coverage gap you will find in using your own policy to cover a rental car is the “loss of use” coverage.

Think about it from the rental car company’s perspective.

They use each car as a revenue source for their business.

If one is out of commission for an extended period because you wrecked it, they will want to be compensated for that loss of income.

Try reading through their rental agreement. You will probably find a clause relating to loss of use.

The only way around this is to get their insurance for Comprehensive and Collision.

Your car insurance policy might already have good coverage for rental cars.

When I go into Mexico, buy a one-day policy, or day-by-day policy, which are sold at or near the border.

These policies will cost around $25 per day.

Just look for the signs on the side of the road saying something like “Mex Insure”.

Are You Storing Your Car?

Ask your insurance company if they allow comprehensive-only policies.

These would protect your car if it’s damaged while sitting in storage, but would not cover you for driving.

Some states may require you to still carry liability insurance for it, even when it’s not being driven, so it’s best to call and find out.

If you do choose a comprehensive-only policy, don’t forget to add liability and collision back on before you drive it anywhere.

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Non-Owner Car Insurance

Non-owner car insurance is a liability-only coverage that you can buy if you don’t own a car.

They’re offered in six-month or one-year terms, just like regular insurance. It’s a good choice if you rent or drive other people’s cars often.

You can also use it to keep your insurance going while you don’t own a vehicle.

This could be a more affordable option than buying a policy you don’t use often, or buying rental insurance from the car rental company.

Because it’s a liability-only policy, it covers property damage and bodily injury to the other people, if you are in an accident in someone else’s car and it’s your fault.

These policies are great for keeping your bank account safe while borrowing a car.

Non-owner insurance policies do not include comprehensive or collision coverage, meaning they won’t cover any injuries you might sustain or damage to the car in an accident you're at fault for.

These are not a good choice if you live with the person you’re borrowing the car from often.

Some insurance companies require all drivers living in the same household to be listed on a policy, and can refuse to cover you if you’re not. 


Compare Policies

Action Item:  When comparing auto insurance companies, don’t decide based on price alone.  Get two to three quotes, then call or chat online with the company and ask about their claims process.  Does it sound easy and reliable?  You can get started comparing quotes here. 


Takeaways

There are situations in which temporary car insurance is necessary.

Sometimes, short term auto insurance companies have policies already in place to cover you short term.

For other people, purchasing temporary insurance is the best way to go.

Whatever you decide, be smart and shop around so you have the full coverage you need.

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