When you’re insuring a car, it’s usually on a yearly basis. Your insurance company can finance these payments so that you’re paying monthly or quarterly instead of yearly, but the car insurance policy itself is sold in yearly increments. Sometimes, you’ll find six-month terms.

But what if you only need short term car insurance, because you aren’t going to be driving this car for a long time? That’s where temporary car insurance comes into play. There are a number of different scenarios where temporary/short term car insurance is very useful and can save you a small fortune.

Different insurance companies will offer different options in terms of shorter term car insurance, and some may not offer this at all. You may find companies that offer a three-month policy, or even car insurance that lasts for one single month. Weekly car insurance is less common these days.

Here’s When You Need Temporary Car Insurance

Here’s a quick rundown of the different situations where you could find yourslef needing temporary car insurance. This isn’t an exhaustive list, but it will give you a good understanding.

  • If you’re borrowing a car from somebody for a longer stretch of time, but not enough to justify buying a full term of car insurance.
  • If you’re renting a car for a couple of weeks, it can be quite a bit cheaper to get your own insurance instead of paying an inflated rate to the car rental company.
  • If you’ve recently sold your car and are borrowing or renting a car in the meantime before you have a new permanent car.
  • If you’re driving a car that you don’t own, for example if you drive cars from a ride-share service.
  • If you’re buying or renting a car while travelling or visiting another country for a medium-term stay that’s not long enough to buy a year of insurance for, but still long enough that you need coverage.
  • If you purchased a car that you plan on flipping (reselling in the near future), or you’re not entirely sure if you plan to keep this car for too long.
  • Anytime you’re driving someone’s car and you aren’t on their insurance policy, and they policy doesn’t cover other drivers.

Things To Keep In Mind With Short Term Car Insurance

Short term car insurance

If you’re driving a car you don’t own, you may or may not be covered by the existing car insurance so talk to the owner of the car to find out. If your friend is lending you their car for a while, you may be covered under their existing policy or you may need to get your own. If you’re covered under their policy, it’s a nice gesture to offer to pay the insurance for the time that you’re borrowing their car if they’re doing you a big favor.

In some cases, you may already have insurance without realizing it. In some cases, your home insurance may have a line that covers you if you’re driving some else’s car. Various credit cards will have surprising types of coverage that most people aren’t aware of, too. It also doesn’t hurt to reach out to your previous auto insurance provider to see if they’re able to offer you anything. It’s worth making a few calls because you could end up saving a lot of money, or learning that you’re already covered.

If you already have insurance and you’re going to be renting a car, it’s possible that you’re covered while driving a car that you don’t own. If you have this, you’re already paying for it, so you may as well use it.

If you’re driving a car that you don’t own for business purposes, it’s quite possible that your existing insurance, or regular temporary car insurance, won’t provide coverage. This can get kind of murky in today’s gig economy where people are using their personal cars to give rides or make deliveries, or borrowing cars when they aren’t technically employees of the company.

What Does Temporary Car Insurance Cover?

Like any car insurance, you can get different types of temporary coverage. This includes collision coverage, comprehension coverage, temporary liability car insurance, loss of use, towing, and more. You’ll notice this as you compare types of car insurance.

Discuss your situation with the car insurance company that you choose to use and they’ll be able to help you choose the coverage that suits you best.

How Much Does Short Term Car Insurance Cost?

As with any car insurance, the price depends on a number of factors including your driving record, the type of car you’re insuring, where you live, and a lot more. Here are some tips for saving money on car insurance, but with temp insurance that’s less of a concern. You’ll pay a premium for buying a shorter term of insurance compared to what you’d pay for that same time period on a yearly term, but it’s still a much lower cost than trying to get away with driving uninsured for any stretch of time.

Some insurance companies will have a cool-down period where it takes x amount of time before your coverage kicks in, so it’s important to plan ahead. This is likely to prevent people from being in an accident, and then trying to quickly buy short-term car insurance in hopes of having their previous accident covered, or simply a way for the insurance companies to earn a little more on less-costly plans. In either case, this may or may not be an issue, so make sure you check ahead.