You might find yourself needing 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 tricky, 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 permitted to operate your vehicle (permissive drivers). In practice, this means a friend from across the street or a relative from out of town can borrow your car and be covered by your policy without needing 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 – check with your insurer to make sure which is applicable to your auto policy.
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 quite costly and must be paid 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.
- Insurers typically want a bill of sale and vehicle identification number (VIN) to start coverage on a newly purchased vehicle.
- If you fail to insure a registered vehicle you may be penalized by the state.
- If you don’t drive the car much, you can switch to collision or liability-only coverage.
- Driving a car home that you purchased out of state may require you to obtain an interstate in-transit permit in the state where you bought the car.
- A moving truck rental agreement will usually include state-required minimum liability coverages. Securing additional coverage such as a damage waiver, cargo coverage, personal accident insurance, supplemental liability coverage and towing insurance when you rent the truck is recommended.
Do you need a short-term policy if you buy a car out of state?
Don’t bother with looking for temporary insurance. Instead, call your current auto insurer before you pick up the car. You’ll likely find that you have automatic coverage for the vehicle for anywhere from seven to 30 days.
It will depend upon your state laws and your insurer’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 add 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 have it.
Insurers typically want a bill of sale and vehicle identification number (VIN) to start coverage on a newly purchased vehicle.
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If you don’t have a car insurance policy, shop around before leaving to pick up the car. You can select the policy you want and be ready to start it 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 on the road. Purchasing a six-month policy will give you 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, you can switch companies once your six-month policy ends.
Also, remember that driving a car home you purchased out of state may require obtaining an interstate in-transit permit (registration) in the state where you bought the car.
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, 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, what kind of coverage do you need?
Your commuter car needs year-round coverage, but if you have a vehicle you only drive occasionally or seasonally, you may want a shortened insurance policy. The first step is to contact your current car insurance company to see what it recommends.
Your insurer will likely allow you to place the car on your policy when needed and remove it when 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. Having one auto insurance provider for all your vehicles is more straightforward, but you must also do what makes the most sense for your needs. If you don’t drive the car much, you could switch to collision coverage or liability-only coverage.
Complications from this part-time insurance scenario are 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 remove liability coverage from a stored vehicle, it’s a smart move to keep comprehensive coverage on it. Generally, this is relatively cheap and will protect your car if it’s stolen, vandalized or damaged in some act of nature, such as a tornado.
Contact your insurer if you plan to take your car out of state for a few months
If you stay at an out-of-state home for an extended time during the summer or a college-age kid takes a household vehicle for a month internship out-of-state, you don’t need to search for short-term insurance. Instead, study your current policy and contact your insurer if you have issues or questions.
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 increase.
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 temporarily 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 registering and insuring a car 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 secure Florida insurance for your car.
Do you need a policy if you rent a U-Haul?
While your personal auto insurance policy coverages – and even credit card insurance benefits – typically 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.
Moving truck rental companies declare the truck renter fully responsible for the equipment and any and all damages. You’ll be charged for the repair costs and loss of income while the truck is out of service.
A moving truck rental agreement usually includes state-required minimum liability coverages, but that’s it. Additional coverage – such as a damage waiver, cargo coverage, personal accident insurance, supplemental liability coverage and towing insurance – is recommended.