Personal Finance

How To Get Temporary Car Insurance

Most of us buy car insurance year after year to cover the vehicles we drive regularly. But what if you need insurance for just a short period of time? That might be the case if you use a car only occasionally or plan to drive one belonging to someone else.

In those instances, you have alternatives to buying a conventional, annually renewed policy. Choosing the right one can often save you some cash. But making the wrong choice—or going uninsured—could put you at serious financial risk.

First, find out whether you need to buy a new policy at all. For example, if you’re a college student returning home for a few weeks and planning to use your parents’ car, you might already be covered under their policy. That may also apply to other relatives or friends borrowing a car for a brief period of time. But check with the insurance agent on that policy to make sure. Some companies are stricter than others, such as covering only members of a household who are explicitly listed on the policy.

1. Buy a six-month policy.

Though you may see offers for one-, seven-, or 28-day auto insurance, the shortest policy you are likely to get from a major, brand-name car insurance company will run for six months.

If you won’t be using a car for the full six months, you can generally cancel the policy when you no longer need it. Try to pay the premiums on a month-to-month basis, if possible, and check your contract to see the date by which you’d need to cancel before incurring another month’s charges. If the insurance company requires you to pay in advance for the full period, you will need to ask for a refund for any unused months.

But be warned: Consumer complaints about monthly charges that continue after a policy has been canceled, or about refunds taking an inexplicably long time, are unfortunately common, so you may have to stay on the case. Most major insurance companies don't charge cancellation fees and will refund any unused premiums. To protect yourself, however, ask for a cancellation confirmation number and note the time, date, and representative you spoke with.

A temporary policy might also be a good option if you are planning to put a car in storage for a number of months. Even if you aren’t driving the car, it will still be at risk for theft or damage, which the comprehensive portion of the policy could cover. Your state may also require that you maintain insurance on the car, including a minimum level of liability coverage, or else unregister it and surrender your license plates.

When the time comes to take the car out of storage and start driving it again, you can increase your liability and other coverage to the appropriate limits. If you already have insurance on a car you plan to store, however, first find out if you can simply pare down the coverage on that policy. Then compare its cost to buying a new, temporary policy.

Just be warned however, if you cancel your policy while still maintaining ownership of the car, you will be considered to have a lapse in coverage. If you go to fully insure a car in the future, you will be subject to a hefty rate hike, which we found could be upwards of 30%.

2. Consider non-owner insurance.

If you don’t own a car but drive one fairly frequently, a non-owner car insurance policy might be your best bet.

A non-owner policy provides liability coverage, which is mandatory in most states. Since liability coverage follows you, not the car, you’ll always be covered for liability regardless of whose vehicle you’re driving, whether it’s a friend’s, a rental, or one belonging to your employer.

The downside is that non-owners insurance typically doesn’t provide comprehensive or collision coverage, so you’d be on the hook for any damage that the car you’re driving sustains.

Another reason to consider a non-owner policy is if you are giving up your car for a period of time but expect to get another one and need a regular policy again in the future. By not dropping your auto insurance altogether, you’ll avoid having a gap in your coverage and may be able to dodge a large price hike when you apply for your next regular policy.

The article How To Get Temporary Car Insurance originally appeared on ValuePenguin.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.