What if you need short-term car insurance?

woman with luggage getting into a rental car

Though uncommon, there are times in your life when a long-term car insurance policy doesn’t make sense. In fact, in the UK, our sister company Veygo offers temporary policies for monthly, daily, or even hourly periods of time. But in the US, car insurance is sold on a long-term basis. Nearly all insurance carriers provide auto policies for a six-month or yearly timeframe to make sure you’re always covered and don’t have to constantly renew your policy. So, what should you do in case you need short-term car insurance when it’s not offered by standard carriers? Read on.

Can you get short-term car insurance?

As we mentioned above, insurance companies don’t typically offer auto policies that cover shorter than a six-month period. Though you may see online advertisements in the US for carriers offering as little as seven-day coverage, these websites are typically making false promises and will direct you to an agent who can only sell a minimum of a six-month policy. Of course, this doesn’t negate the fact that you might need short-term car insurance. There are options out there, but first, let’s go over why you might need this in the first place.

Why would you need short-term car insurance?

There are very specific reasons why you might need short-term car insurance as opposed to a typical full-term policy, including:

  • You’re a student driver on summer or winter break.
  • You need to rent a car.
  • You’re visiting someone and want to use their car.
  • You want to put a car in storage that you don’t usually drive.

Do you need additional coverage, or are you already covered?

The first step to making sure your car is properly insured for the short period you need is to see if you’re already covered by your regular car insurance. You also need to know when your insurance doesn’t cover you.

When you’re already covered

  • The permissive driver clause. Most insurance policies have a provision that allows car insurance to be extended to anyone — a family member or friend — that has received permission from the owner to drive their car, typically for infrequent use.
  • Test driving a vehicle at a dealership. If you’re test driving a car, you’re covered under the dealership’s insurance and are not required to have insurance on your own.
  • Renting a car on vacation. Typically, if you have car insurance, it will extend coverage to a rental car, though rental companies may still offer supplemental insurance. If you’re vacationing out of the country, you’ll need to inquire with your carrier to check if you’re still covered or use the rental company’s insurance.
  • Driving a company car for company business. If you’re allotted a company car by your employer and engaged in use that’s for the business of the company, you are already covered for insurance.

When you’re NOT covered

  • Permissive driver use doesn’t include high-risk drivers. The permissive driver clause does not cover everyone, so if you’re considered a high-risk driver because of a DUI or suspended license, you probably aren’t covered.
  • Using a company car for personal reasons. If you’re using a company car for personal reasons, that’s not in accordance with its intended use and you won’t be covered in the event of an accident, theft, or in any other scenario.
  • Driving a newly purchased vehicle from the dealership without insurance. If you don’t have insurance already when you’ve purchased a vehicle and leave the lot to drive it home, you’re not covered.
  • During certain times when providing rideshare services. For many insurance companies, it’s a violation of a driver’s personal policy if they are engaged in rideshare services like that of Uber or Lyft. There are specific policies for these services offered either by the rideshare companies, which may come with limitations, or through other carriers.

In the examples we listed earlier for why you might think you need short-term insurance, let’s revisit each bullet point and problem solve for them.

You’re a student driver on summer or winter break.

Student drivers on a break should stay on their parents’ insurance with an adjusted or reduced coverage plan for that vehicle. You should also inquire about away-from-school discounts to reflect this seasonal vehicle use.

You need to rent a car.

Renting a car domestically is already covered by your policy but can also be secured through the rental company in the case of international travel or the desire for supplemental coverage.

You’re visiting someone and want to use their car.

If you’re visiting a friend and want to use their car, this falls under the permissive driver clause. If you’ll be regularly driving their car for a set amount of time, they can add you to their policy for that amount of time. It will increase their rates temporarily, but you can rest assured that you’re covered.

You want to put a car in storage that you don’t usually drive.

Lastly, for a car that you don’t plan on driving for a period of time, there is car storage insurance (more on that later).

If you need truly need temporary or limited coverage, what are your options?

Pay-per-Mile Insurance

Pay-per-mile insurance, also known as usage-based auto insurance or pay-as-you-go, is coverage that’s based on your actual usage as opposed to how you will drive statistically. This type of insurance may be a good fit for you if you drive infrequently and want to save money. Carriers typically use an app to track your usage. Usage-based discounts are also available by some companies instead of specific policy offerings based on usage.

Car Storage Insurance

Car storage insurance, or comprehensive-only coverage, is insurance for your vehicle if it’s not being driven or if it’s in storage. This coverage will protect your car from natural disasters, falling objects, theft, and vandalism. Some insurance companies may require your vehicle to be stored for at least 30 days to get this coverage, so you will need to contact your insurance representative to get specifics on requirements.

Non-Owner Car Insurance

A non-owner car insurance policy is insurance for people who frequently borrow cars of others or rent cars but have no car of their own. It typically only includes liability insurance — coverage for the other driver if you are at fault in an accident — and for the most part, is available in six-month or year limits.

Can you buy a six-month policy and cancel early?

While you can technically purchase a six-month policy and cancel early, it’s not something that’s recommended. Canceling early is typically best for circumstances when you are selling a car or switching to a new insurance policy. Canceling your policy early outside of those situations may be a risk in terms of state requirements for car insurance and can cause an increase in rates on your next insurance policy, because at that point, there will be a lapse in coverage. Car insurance companies typically refund any remaining premium to you if you cancel before the end of the term, and cancellation fees may or may not be a factor as it depends on the insurance carrier.

Short-term solutions

Got it? If not, don’t fret! Here are a few more examples of scenarios where a person would need insurance for a short term and the best solutions for each.

Scenario Insurance Solution
College student enrolled at university away from home, leaves vehicle at home with parents Possibly reduce or adjust coverage, inquire about student-away-from-home discounts
Uninsured relative comes to stay with family for summer, will use car frequently for personal use and errands Add relative on to insured family member’s policy for the summer
Couple puts their vehicle in storage while they head south to Florida for the winter Car storage policy/Comprehensive only
A few friends vacationing in New Orleans, will need rental car to get around Personal auto policy, possibly additional rental car company coverage

There are certain situations in life where you may need a short-term solution to meet an auto insurance need. Whether it’s a non-owner policy, comprehensive-only coverage, student discounts, or other insurance options, we’ve got you covered. Get a quote with Elephant today.

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