Getting Temporary and Short-Term Car Insurance Coverage

Temporary and short-term car insurance. What are they? Who needs them? How do you go about getting coverage? We are going to answer those questions for you, so that you’ll know everything you need to know about this oft-neglected car insurance topic. Don’t worry, there’s nothing to be afraid of.

As you know, the average American buys a car insurance policy lasting between six and twelve months. Within a month of the policy’s expiration date, it can be renewed or allowed to lapse in favor of buying better or cheaper car insurance. However, there are times when a six or twelve-month policy is inappropriate.

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Purpose of Temporary or Short-Term Insurance

Temporary and short-term car insurance are essentially the same, so we’ll refer to both of them simply as “temporary car insurance.” This type of insurance is designed for situations in which purchasing a six or twelve-month policy is not necessary. Here are a couple of examples:

  • Loaner Car – You may find yourself without a car after an accident or major breakdown. Someone may loan you a car temporarily, until you get back on your feet. Temporary car insurance lets you cover that vehicle in the interim.
  • Guest Drivers – Most insurance policies only cover guest drivers if those drivers are operating your vehicle on your behalf. So let’s say you have out-of-town guests who plan to stay with you for several months. If you give them full-time use of your car, they will probably need temporary car insurance to be covered.
  • Military Service – There are times when military members are transferred to another state on a short-term basis. If their current car insurance companies do not offer insurance in that new state, a temporary policy may be in order until the individual returns home.

There are other reasons for getting temporary car insurance not listed here. However, the principle is the same. This type of car insurance is not intended to be used long-term.

Finding a Policy

Most of your major car insurance companies offer some sort of temporary car insurance. Regional or statewide companies may not. If you need temporary insurance, the first thing to do is contact your current provider to find out what they have to offer. Then be sure to get quotes from other insurance providers as well.

If you’re interested, there are specialist insurance companies that deal primarily in temporary insurance. While these companies may not have the big-name recognition of some of the well-known insurance giants, they provide adequate coverage on a temporary basis.

The one thing to remember is that you should always compare both rates and coverage amounts. Temporary car insurance is no different from your standard policy. You need to make sure you are getting enough coverage to protect yourself adequately, without paying an arm and a leg for it. You can only do that when you compare policies.

Things to Know

Despite all the similarities between standard car insurance and its temporary cousin, there are enough differences to make each one a distinctly separate product. As such, there are some important things you need to know:

  • Most temporary car insurance is purchased in 30-day increments
  • You’ll likely have to pay for the policy up front
  • State laws limit the number of times a temporary policy can be extended
  • You will not receive a refund for coverage that goes unused.

The terms and conditions surrounding temporary car insurance always favor the provider. As long as you do not mind that, it’s a great option when you don’t need a long-term policy.

Consider Insurance before Buying a New Car

How many times have you sat through a television commercial advertising a new car, only to be ready to jump up and go buy it right away? You’re not alone. That reaction is exactly what those types of commercials are designed to elicit. However, bear in mind there are things you need to consider before signing a deal. One of them is the cost of car insurance.

It should be obvious that we all want affordable car insurance. But we also want to be able to afford owning that car we saw in the ad. When you look at it through the lens of total cost, that brand-new car may not look so attractive.


Total Cost of Ownership

One of the tools used by money-wise consumers is known as “total cost of ownership.” This financial tool takes into account all of the money you will spend on a car over a five-year span. It looks at your monthly loan payments, your insurance payments, and how much you’ll spend on gas, routine maintenance, and repairs. It is the total cost of ownership that lets you see that brand-new car in light of your total budget.

The principle of total cost of ownership dictates that you consider insurance rates before you purchase a new car. Why? Because insurance prices depend somewhat on the make and model of the car you drive. Just take a minute and think about the following:

  • Repair and Replacement – Just as some cars are more expensive to purchase, others are more expensive to repair and replace. The general rule states that the more expensive the car is on the showroom floor, the more expensive the insurance will be.
  • Theft Potential – In the eyes of thieves, there are two types of cars they love to steal. The first is an older car, like a 1990s Honda Civic, with parts that are hard to come by. The second type of car is whatever is currently hot on the retail market. If the new car you are thinking of is the same car everyone else is after, expect to pay higher insurance rates.
  • Credit Score – When you buy a new car, you are instantly putting strain on your financial resources – something that will affect your credit score. But guess what? Your credit score also affects your insurance premiums. If you are already at your limit for monthly insurance payments, do not buy a more expensive car.

Adding It All Together

You can visit several different websites that provide total cost of ownership tools. The more comprehensive tools include a category breakdown allowing you to see how much you are likely to pay for car insurance. Though that number will not be accurate to the penny, it will give you a ballpark figure.

Use that ballpark figure to decide whether affordable car insurance is realistic or not. That number might also be important when it comes to monthly budget. If the combination of insurance and loan payment is too much for you to handle, think about less expensive vehicle.

Whatever you decide to do, do not purchase car insurance without comparing quotes from multiple providers. Getting the best price on affordable car insurance is not possible if you don’t know what other companies are charging.

One last thing before we wrap this up: Do not assume your current insurance company is automatically going to give you the best deal. They may, but they may not. It all depends on how they rate your new car. And don’t worry if they don’t give you as good a price as you’re expecting. You can always switch to a new provider.