Temporary car insurance is hard to find in the U.S. – most auto insurance companies sell policies for terms of six or 12 months. The few companies that do offer specialized short-term policies are costly, and premiums must be paid upfront for the whole term.
However, you might not need temporary insurance. Learn more about temporary car insurance and find out whether you actually need short-term car insurance.
- Temporary car insurance doesn’t exist. If you want to opt for a shorter-term policy, buy a six-month policy.
- Most car insurance policies extend coverage to any driver permitted to operate your vehicle (permissive drivers).
- The policyholder can cancel a car insurance policy at any time.
What is temporary car insurance?
Temporary car insurance doesn’t exist. If you want to buy a shorter-term policy, buy one for six months rather than a year. You can cancel an insurance policy at any time. You can also consider pay-per-mile car insurance like the policies offered by Metromile.
Short-term car insurance, also known as temporary car insurance, is a product for when you do not need the typical six-month term and often when you are insuring a car you do not own, according to James Brau, Joel C. Peterson Professor of Finance at Brigham Young University.
“You can get insurance for as little as one day – such as when you are renting a car,” he says. “You can always cancel a six-month policy if you want to engineer your own short-term insurance, although there may be additional fees.”
Temporary car insurance options
If you own a vehicle, you must meet your state’s minimum auto insurance requirements. However, you can get a non-owners insurance policy if you don’t have a car. This option is great because you’ll have continuous coverage if you rent or borrow cars frequently. And a non-owner policy is cheap – the average rate is $380 per year.
Who needs temporary car insurance?
If you bought a car that you only drive seasonally, are traveling or are a college student who only drives during the summer, you might need temporary auto insurance. But there are a few things to know.
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, they are either covered automatically or can easily be added to the policy as a driver—check with your insurer to make sure which is applicable to your auto policy.
Typically, all household members must be listed on an insurance policy – if you have a college student who lives away from home, they’ll need to be listed on your policy but you’ll get a discount if they live 100 miles away or more.
What are the risks and limitations of short-term car insurance?
The risks and limitations of whatever type of insurance policy you purchase apply as they would with a standard policy. Your car insurance policy only covers you up to your select coverage limits. And comprehensive and collision coverages come with deductibles, which you’ll have to pay if you file a claim.
What is the shortest term for car insurance?
The shortest term for a standard car insurance policy is six months. Very few insurers offer short-term policies. Instead, you must obtain a regular policy and then cancel it when you no longer need it. You might have to pay a cancellation fee when you cancel your policy.
It can be tricky, so knowing what steps to take is wise. In some cases, you may not even need temporary car insurance.
Can you get insurance only for a month?
No. Six months is the shortest car insurance term from most insurance companies.
Check out our detailed guide on whether you can buy car insurance for just one month
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, the car is more likely to 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. You might need to provide a bill of sale and vehicle identification number (VIN) to start coverage on a newly purchased vehicle.
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 you are home, you should take the time to shop for car insurance—conduct a comparison and find the best rates possible. You can switch companies if the cheapest rates are with a different insurer.
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.
ExampleIf 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 can afford your insurance and registration for the drive home.
What kind of coverage do you need if you have a seasonal-use vehicle?
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.
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. Many insurance companies offer this as an “in storage” policy.
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 with issues or questions.
Most standard car insurance policies have a broadening clause that extends coverage to other states. This means that if the state-minimum car insurance requirements in a state you are traveling to or staying in are higher than those in 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 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.
Frequently asked questions
Do you need a policy if you rent a U-Haul?
Yes. 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.
Why do most insurers not offer daily, weekly, or monthly policies?
Shorter-term insurance customers are less likely to renew, so they’re less valuable to insurance companies. The administrative costs of a very short-term policy wouldn’t be worth the premiums paid by the customer.
How can I cancel my short-term car insurance policy?
To cancel your car insurance policy, contact your insurance company by phone and speak to a representative. Cancellation fees may apply.
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