Do You Need to Buy Temporary Auto Insurance Coverage?
Before you ever get behind the wheel of a car, you’re required to purchase a valid auto insurance policy — at least, in 48 of the 50 states. But while it’s easy to understand the importance of this coverage when you’re driving around all day, it might be difficult to justify the expense if you’re only planning to drive for a short period of time.
Whether you’re simply borrowing a car for a week or leaving the country for an extended period of time, buying a six- or 12-month auto insurance policy might not feel justified. In that case, you may begin shopping around for temporary auto insurance.
What is Temporary Car Insurance?
In some countries, insurers offer true temporary car insurance policies. These are intended to cover drivers for a specific (short) period of time, giving them liability and even full coverage for whichever vehicle they plan to be driving.
In the U.S., though, insurance companies stay away from offering this type of policy, likely due to the risk involved. That doesn’t mean that drivers in this country cannot get temporary auto insurance, however… it’s just that this temporary coverage looks a bit different.
Types of Temporary Coverage
There are a few different routes to take if you’re only going to be driving for a temporary period of time. In some cases, you’ll want to buy insurance coverage; in others, you may find that you’re actually already protected and don’t need to purchase anything extra.
Here are a few types of temporary auto insurance coverage, and the different scenarios in which you’d need them.
Rental Car Coverage
You will be offered the opportunity to purchase coverage from the rental car company, which lasts through the rental period. This is offered at an additional cost and can protect you against accidents, vandalism, and even theft.
Rideshare insurance policies offer a type of fill-the-gap coverage if you’re a rideshare driver. This only kicks in during specific times, such as when your rideshare app is on but you don’t have a passenger in the vehicle.
A rideshare policy itself isn’t temporary, but the coverage period is.
If you’re considering temporary coverage because you want to save money, you may want to look into usage-based insurance. These policies are becoming more and more popular, and aim to reward drivers who use their vehicles less often.
If you bike to work, use public transportation, or otherwise only drive your vehicle occasionally, these usage-based policies are a great way to cut insurance costs.
Non-Owner Auto Insurance
If you plan to occasionally drive a vehicle that does not belong to you, you might want to consider purchasing a non-owner auto insurance policy. This liability coverage is secondary in nature, and would protect you (and the owner) of the vehicle if you were to get in an accident while driving their car.
Non-owner insurance isn’t meant for those who will be driving a family member’s vehicle, or a car belonging to someone else who lives in the home. Instead, it’s for those who may borrow occasionally from friends, utilize car-sharing services, or rent cars frequently.
While non-owner insurance isn’t technically temporary coverage, it is designed for those who drive infrequently. Because of that, the annual cost is significantly less than a typical auto insurance policy.
Can You Get One-Month Car Insurance?
When you only need insurance for a few weeks… can you just buy a one- or two-month policy?
Well, technically that type of policy doesn’t exist. However, if you purchase a typical six- or 12-month policy only to learn that you didn’t need it as long as you thought, you could always cancel your coverage. The insurer will prorate your premiums and refund the difference after you do so.
Just be careful going this route. When you go to purchase insurance later on, you may find that your premiums are higher due to a period of lapsed coverage… even if you weren’t driving during that time.
Determining if a Temporary Policy is Actually Necessary
In some cases, you may not need to worry about buying short-term insurance coverage, even if you’ll be driving temporarily.
For example, if you are borrowing a car from a housemate or family member, oftentimes their existing policy will already cover you when you drive the car on occasion. Just be sure that the vehicle owner checks their policy to see if any restrictions exist.
When renting a car, your credit card may automatically provide primary or secondary coverage as an added benefit. This complimentary perk saves you money while also protecting you behind the wheel of your rental.
While we don’t have true temporary auto insurance policies here in the U.S., there are a few different ways that you can ensure adequate coverage when you’re either behind the wheel of someone else’s vehicle or only driving for a little while.
These options may offer limited coverage, but they are definitely more affordable than purchasing a traditional insurance policy for six months or longer. Plus, you have the flexibility of buying only what you need, when you need it most.