Temporary Car Insurance

Short-term car insurance seems like a great idea, but what are you really getting?

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What is temporary car insurance?

Many websites throw around the terms “short-term” or “temporary” car insurance without mentioning which insurers actually provide it or where to buy it. That’s because these policies do not exist — and in some cases, are scams. If you want a “short-term” or “temporary” car insurance policy, you'll need to cancel your six- or 12-month policy mid-term.

Let’s review the primary reasons temporary car insurance does not exist, and the reasons to avoid these policies.

Temporary auto insurance is tricky for these reasons:
  1. It's impossible to find
  2. You can lose money
  3. You can't apply coverage immediately
  4. It’s technically illegal
  5. It can affect your insurance record
  6. You won't have coverage in an accident
  7. How to find temporary car insurance the right way

 

Most insurance companies won’t provide it

Most insurance companies offer two options for term lengths: six months and — less commonly — 12 months. An insurance company wants to keep its clients for as long as possible. Drivers who only want to carry insurance for a short period of time aren't likely to renew, which make them less-than-ideal customers. Plus, the premium an insurance company collects from an extremely short-term car insurance policy isn't worth the insurer's administrative costs.

Drivers seeking short-term car insurance policies also present unique risks. Car insurance companies are wary of temporary policies, as they can act as cover for drivers simply looking for a claim payout or practicing insurance fraud, i.e., a high-risk client.

For more information on common car insurance policy term lengths, see our articles below:

 

You might lose your down payment

While it varies by company, most policies require a down payment worth 30 to 45 days of the total premium. If you cancel five days into your policy period, you’re not always guaranteed to recoup your entire down payment.

Some insurance companies also assess cancellation fees.

 

You can’t use coverage immediately

Most companies have a grace period rule for car insurance coverage. Many insurance companies limit the use of collision and comprehensive coverage within 30 days of a policy's inception. If you only want an insurance policy for two weeks, you could be ineligible for major coverage types during this window.

 

Insurance is a legal requirement in most states

Unless you live in New Hampshire, you're required by law to carry at least the legal liability coverage limit to operate or register a vehicle. If you’re caught driving without insurance, you can be ticketed and your license can be suspended.

If you’re leasing or financing a vehicle, your lender will usually require you to carry state-minimum coverage, as well as comprehensive and collision — and certainly not in a short-term capacity. If your lender discovers you’re driving without insurance, you may risk getting your vehicle repossessed.

 

You'll have gaps in your insurance record

Many insurance companies will ask you if you’ve had six months of prior continuous coverage before agreeing to take you on as a client. The reason for this has to do with the risk level of a previously uninsured client. If you had an active license but were not insured, an insurance company will assume you were driving without insurance, which is an indicator of a high-risk client. Having gaps in your insurance history can raise your premium by nearly $90 per six-month policy.

 

Number of Months with Prior Insurer

Average 6-Month Premium

0

$788

6

$744

12

$729

36

$713

60

$701



No coverage in the event of an accident

This is the primary risk of driving without insurance. If you're found at-fault after an accident without insurance, you will most likely be ticketed, have your license suspended, and potentially be sued for the property or bodily injury damages you cause. If you’re the victim of a hit-and-run accident, you won’t have any coverage. Any property damage to your vehicle would be paid out of pocket.

 

Temporary auto insurance: what you can do

The idea of temporary car insurance is appealing, as it offers protection when you need it and saves you money when you don't need coverage. However, it’s uncommon for insurance companies to offer policy terms shorter than six months. If you want car insurance on a temporary basis — which we don’t recommend — you can purchase an insurance policy before canceling mid-term. This practice can land you in a lot of trouble for the reasons outlined previously.

An option worth considering is usage-based car insurance. This classification of insurance prices premiums based on driving history. If you drive infrequently or drive safely, you can get a considerable discount from your insurer. Below are telematics and usage-based programs offered by popular car insurance companies.

Telematics program

Estimated savings

Progressive Snapshot

Average of $130

Allstate Drivewise

Average of 10-25%

State Farm Drive Safe & Save

Up to 15%

Esurance DriveSense

Varies

Nationwide SmartRide

Up to 40%

Liberty Mutual RightTrack

Average of 5-30%

 

Other options include companies like Metromile and Root. Metromile is a pay-as-you-go form of auto insurance, and Root follows the same model as the companies above.

 

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Additional resources

If you’re looking for more information, see our related articles:


Recent Questions:

Temporary Car Insurance

Can you insure a right-hand import vehicle for four weeks?

Not all car insurance companies in the US will be willing to cover an imported right-hand vehicle, so be prepared to shop around. In addition, temporary car insurance doesn't really exist.

A friend is purchasing a car for me tomorrow, I'm wondering if there is a temporary policy I can get through the dealership until I can shop for my own policy?

Temporary car insurance doesn't really exist. You will likely have to get a Texas auto insurance plan before they let you leave with the vehicle.

Is there a temporary insurance policy while I'm test driving a used car to protect me before I actually buy it?

There really isn't a global policy that can be used for what you are needing, nor does "temporary insurance" exist. The good news is most insurance plans are paid month-to-month and have very minimal penalties for canceling — if any penalty at all.

Where can I get short term insurance for an RV?

Whether you're insuring your car or RV, temporary insurance is not really an option — most policies are for 6-12 months. You can typically cancel at any time but be aware of any fees for canceling early.