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Temporary car insurance: How to get short-term coverage

Penny Gusner

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CarInsurance.com

Quote formYou might find yourself in a situation where you need temporary car insurance, but the problem is that very few insurers offer short-term car insurance policies. Instead, you typically must obtain a regular car insurance policy for the short period of time you need it, and then cancel it when that time is up. It can be a tricky process, so it's wise to know what steps to take. In some cases, you may not even need temporary car insurance.

Most car insurance policies extend coverage to any driver who is given permission to operate your vehicle (permissive drivers).

That means a friend from across the street or relative from out of town can borrow your car and be covered by your policy without the need for temporary car insurance. Also, if you have a child with a learner's permit, he is either covered automatically or easily can be by being added to the policy as a driver.

A lack of demand for short-term car insurance, paired with auto insurers wanting drivers to stick around and pay premiums every six or 12 months, makes temporary car insurance hard to find in the U.S. The few companies that do offer specialized short-term policies are on the costly side and normally make you pay upfront for the whole term. 

The good news is that many situations you may think call for temporary insurance really don't. Here are some scenarios where short-term insurance appears to be needed, and what you can do instead to fulfill your needs.

If you buy a car from out of state and need to drive it home
If you have a seasonal-use vehicle that is stored for a portion of the year
If you take a car out of state for a couple of months
If you rent a U-Haul to move

If you buy a car from out of state and need to drive it home

Don’t bother with looking for temporary insurance, instead call your current auto insurer before you go to pick up the car. You’ll likely find that you have automatic coverage for the vehicle for anywhere from 7 to 30 days. It will depend upon your state laws, and your company’s guidelines. 

If you’re replacing another car already on your policy, there is a higher chance that the car will be automatically covered than if you’re adding another vehicle to your household.

If you’re not automatically covered, or will be out-of-state longer than the automatic coverage lasts, ask your insurer what it will take to add the car once you are in possession of it. Insurers typically want a bill of sale and vehicle identification number (VIN) to start coverage on a newly-bought vehicle.

If you don’t have a car insurance policy, then shop around before leaving to pick up the car. You can select the policy you want and be ready to start the policy once you have the VIN.  But if you’re already out of state when you realize you need car insurance and don’t have it, you can buy a policy just to get the car home. 

Buying a six-month policy will give you "temporary coverage" to get you home. Once home, you should take the time to shop for car insurance -- conduct a car insurance comparison and find the best rates possible.

If the cheapest rates are with a different insurer, cancel your current hastily-purchased policy and switch to the new insurer. You may have to pay a cancellation fee and show that you have new coverage in place to cancel out your first policy, but if you’re saving a decent amount it will be worth it.

Also, keep in mind that driving a car home that you purchased out of state may require you to you to obtain an interstate in-transit permit (registration) in the state where you bought the car. 

For example, if you buy a car in New York to transport back to Texas, New York requires you to obtain an interstate in-transit permit. It allows you to transport the vehicle to another state to register the car. Once in Texas, you have 30 days to pass inspection and title and register the car.

It pays to do your homework before buying a car out of state, so you don’t come up short on your insurance or registration needs for the drive home. 

If you have a seasonal-use vehicle that is stored for a portion of the year

Your commuter car needs year-round coverage on it, but if you have a car you only drive occasionally or seasonally -- like a convertible that you only drive in the summertime because of the climate where you live -- you maybe want a shortened insurance policy.

The first step is to talk to your current car insurance company to see what options it has for your situation. 

Your car insurance company likely will allow you to place the car on your policy for the times that you need it and remove it when it is stored. This means adding it and being charged for the times that you drive it and then canceling coverage when it is not in use. 

If your insurer doesn’t offer this, shop around for one that does. It’s simpler to have one auto insurance provider for all of your vehicles, but you also have to do what makes the most sense for your needs -- which sometimes is to have separate insurers.

Complications from this part-time insurance scenario is that if you take liability car insurance coverage off of your stored vehicle to save, most state laws require you to turn in your plates and registration and then re-register and tag your car when you’re ready to drive it again. If you fail to insure a registered vehicle you may be penalized by the state.

If you take liability coverage off of a stored vehicle, it’s a smart move to keep comprehensive coverage on it. Generally this is relatively cheap and will protect your vehicle if it’s stolen, vandalized or damaged in some act of nature, such as a tornado.

If you take a car out of state for a couple of months

If you stay at an out-of-state home for an extended time during the summer or one of your college-age kids takes a household vehicle for a month internship out-of-state, you don’t need to search for short-term insurance; instead you need to study your current policy.

Most standard car insurance policies will extend your coverage to other states through a broadening clause. This means if the state-minimum car insurance requirements in a state you are traveling in or staying in are higher than your home state your insurance will automatically raise up to conform to that state’s laws.

Not all policies have this perk, so if you find yours does not, see about bumping up your limits before you go, if the state you’re staying in has higher limits than what you currently have.

Your insurer doesn’t mind you temporary staying in another state, but if you decide to make it permanent or long-term (your son’s internship turns into a job), then you’ll have to change over your insurance to that state. Most states also require you register and insure a car there if you remain there long enough. For instance, if your vehicle is in Florida for 90 days out of the year, even nonconsecutive, you must place Florida insurance on it.

If you rent a U-Haul to move

While your personal auto insurance policy coverages – and even credit card insurance benefits – normally extend to rental cars (so you don’t need to buy temporary insurance for a rental car), they don’t cover commercial vehicles or rented trucks, such as a U-Haul moving truck. 

A moving truck rental agreement will usually include state-required liability coverages, the truck isn’t covered unless you buy coverage from the truck rental counter. This is temporary auto insurance, and necessary if you want to make certain the big, boxy truck you’re not used to driving is covered for damage you may cause to it.

Read Rental trucks: You aren’t covered for details on what temporary insurance coverage are available for rented moving trucks.

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