Couple driving down an open road in a convertible sports car.No, not usually.

Month-to-month agreements are standard for many things today: gym memberships, cable or satellite contracts, mobile phones and even rent. Having a month-to-month option gives us a feeling of less commitment, less obligation, and, thus, more flexibility. But there are some things a one-month agreement just doesn’t work for, and car insurance is one of those things.

There are several reasons why most U.S. insurance companies do not offer month-to-month car insurance, a type of temporary car insurance. We’ll talk about why, but we’ll also cover your options for alternatives to one-month car insurance.

What is month-to-month insurance?

Month-to-month insurance is a type of temporary insurance. If month-to-month car insurance were available in the U.S., it would essentially provide auto coverage for one month at a time. That means you could have the same insurance coverage you have on an annual policy, except your policy would expire monthly instead of yearly.

Month-to-month insurance should not be confused with insurance you pay for monthly.

Although many insurers allow monthly payments, there is still a six-month to one-year policy in place. In other words, you may be paying for your car insurance monthly, but your policy does not expire monthly.

Most insurance companies offer insurance terms of only six or 12 months --but the good news is that you don't have to pay for the policy in full at inception.

Several situations may have you looking for an option for temporary car insurance.

Who needs one-month auto insurance?

Here are a few situations that could cause you to seek a short-term car insurance solution:

  • You’re renting a car and aren’t happy with the coverage offered by the rental company.
  • You’ve purchased a car you plan to resell soon but need some temporary coverage until it sells.
  • You need coverage for a vehicle you drive only occasionally or seasonally, like a collectible.
  • You need coverage for a student driver that only drives when home on college breaks.
  • You have a car in another state, like a vacation home, that you drive certain times each year.

Alternatives to one month car insurance

We know that situations may warrant a short-term solution for car insurance, but we also know that month-to-month car insurance doesn’t exist in the US. So, we’ve come up with some alternatives for you.

Usage-based insurance

Usage-based car insurance is a type of insurance that monitors mileage, driving habits, or both and then allows you to pay for insurance based on those factors. Progressive’s Snapshot, State Farm’s Drive Safe & Save and MetroMile’s Pay-Per-Mile are examples of usage-based insurance options.

A common usage-based insurance is called pay-per-mile (or pay-as-you-drive) insurance that allows you to do exactly that. This type of policy may be an excellent option for someone who drives infrequently. At whatever point you no longer have the vehicle you can cancel your pay-per-mile policy.

Limited-use policy

A limited-use policy gives year-round coverage but only up to a specific mileage cap. Two thousand to 4,000 per year is the most common. Limited-use policies offer relatively cheap rates, which make it possible to keep the insurance year-round even if you are not frequently driving the insured vehicle.

Add a driver to an existing policy

This alternative may be most fitting for parents of college-aged kids who live in the home at certain times of the year and share a vehicle during those times. Most insurers want anyone who lives with you or has access to your car to be listed as a driver on your policy.

There may be no need to look into a one-month policy if they can be added as a driver on an existing policy.

If your college student drives a different vehicle, you may be able to add the vehicle to your existing policy and then remove it when they go back to school if they’re no longer driving. Be sure to add the vehicle back onto your policy if it is being driven at all.

Rental car insurance

If you don’t own a vehicle but regularly rent one, you’ve probably been offered rental insurance from the rental car company. This is temporary car insurance that is only active during your rental agreement. You may be offered a loss-damage or collision damage waiver for any damage or theft done to the rental car, supplemental liability protection and personal accident insurance.

Rental car insurance can seem pricey, but it is an affordable way to protect your financial well-being, especially if you are not already paying for car insurance.

If you own an insured vehicle but also sometimes rent a car, check with your current auto insurance provider to learn how your existing coverage may extend to your rental car. That will help you to identify any coverage gaps and decide if you need any rental car insurance as a supplement.

Another great tip is to check with your credit card company if you purchase rental cars on a credit card. Many major credit card companies offer rental car coverage perks.

Early cancellation

Here’s a secret: most car insurance companies do not charge cancellation fees.

This means you could sign a six-month insurance policy (or even a one-year), and whether you choose to pay monthly or prepay the entire premium, you can still cancel the policy at any time. If you’ve prepaid the premium, the insurance company will send you a prorated refund for the months you have not used.

If you need insurance for just one month, you can purchase insurance for the shortest term offered and request that it be canceled after one month.

Comparing one month car insurance quotes online

Remember, you can compare monthly costs for a six-month or one-year policy, but month-to-month car insurance policies are pretty much non-existent in the U.S.

When comparing quotes, it is essential to understand that insurance providers will use various factors to determine your rate. Factors like the state you live in, your driving record, your credit score, your vehicle type, and the type of coverage you need are just a few of the things providers will assess to determine your rate.

That means costs will undoubtedly vary, which makes it all the more important to get quotes from several different providers. Some providers are notoriously cheaper than others for certain driver types.

Don’t forget to ask potential providers about what discounts they offer that you might qualify for. Discounts can result in significant savings.

Month to month car insurance FAQ’s

Can I get a one day car insurance policy?

No. One-day car insurance policies do not exist in the U.S. outside of rental car insurance if your rental agreement is for one day.

Why do car insurance companies have longer terms?

There are a few reasons insurance companies do not offer short-term car insurance:

  • People seeking short-term insurance can be seen as a more significant risk for claims.
  • Insurers need to collect more money in premiums than they pay out in claims.  Collecting premiums for only a month or so could create an imbalance between their costs to write the policy and what they make from it, especially if a claim is filed during that time.
  • Short-term insurance has historically been abused. Michigan’s former 7-day policy is a great example of that. The policies were banned after it became apparent that drivers were using the 7-day policy to show proof of insurance for car registration, then not renewing and driving uninsured.

Does Geico provide a one month car insurance policy?

No. Geico does not offer a one-month car insurance policy. They offer standard terms of six to 12 months, but they do offer usage-based insurance called DriveEasy that tracks driving habits to reduce rates.

The bottom line on month to month car insurance

Month-to-month car insurance does not exist in the U.S. currently. That may be bad news if you’re looking for a temporary car insurance solution, but the good news is that other options are safe, affordable and help you maintain the right coverage for your needs.