Short-term car insurance allows you to temporarily insure a car you are driving, renting, borrowing, or lending.
Buying temporary or short-term car insurance is very different from buying regular car insurance. Keep reading to learn when you might need to buy short-term insurance, where you can buy it, and our recommendations for finding the best short-term car insurance providers.
For easy, efficient auto insurance shopping, you can also read our recent review of the best car insurance companies to get insights into industry leaders. But first, here is everything you need to know about temporary or short-term car insurance.
To start comparing free quotes from providers in your state, use the tool below.
In this article:
- What Is Short-Term Car Insurance?
- Do You Need Short-Term Car Insurance?
- Why Is It Difficult To Get Short-Term Car Insurance?
- What Are Your Options for Short-Term Car Insurance?
- Where To Get Short-Term Car Insurance
- FAQ: Short-Term Car Insurance
What Is Short-Term Car Insurance?
Short-term car insurance is temporary car insurance that can last from one day up to three months. For many drivers, a short-term policy is a cheaper alternative to standard car insurance if you don't need insurance for the full year.
Do You Need Short-Term Car Insurance?
People commonly shop for short-term car insurance in the following scenarios:
- Visiting a country for a short period of time and plan to drive a car there
- Not comfortable with the owner’s liability insurance on the car you’re driving and would like to supplement it with your short-term car insurance
- Renting a car and don’t have a personal auto policy that extends the coverage to rental cars
- Wanting to borrow a car from someone for an extended duration
- Borrowing a car for a few days from a friend or a family member and are not listed on their policy
- Lending your car to someone but don’t want to add them to your auto policy
- Don’t have a car but plan to drive someone else’s car temporarily
- Buying a car but plan to sell it soon
Why Is It Difficult To Get Short-Term Car Insurance?
Short-term car insurance is difficult to get for one simple reason: very few companies provide it. Most insurance companies in the United States offer only six-month or twelve-month policies because the returns from temporary car insurance policies are not worth the administrative costs. You may also be able to find month-to-month car insurance, but it likely won't be offered by reputable providers.
Since customers looking for short-term car insurance are generally not likely to renew their policies, companies do not find this segment very attractive. Also, there are more risks associated with short-term car insurance because such policies can often be misused by people looking for a quick insurance payout.
What Are Your Options For Short-Term Car Insurance?
Before you start shopping for short-term car insurance, here are 10 things you should do.
1. Find Out What Is Covered In Your Policy
Talk to your insurance provider about your current policy and explain your situation. If you are lucky, your personal auto policy may already have the coverage you want for your temporary needs.
Some auto insurance policies allow permissive use. Under permissive use, your insurance coverage may be passed on to a driver not listed on your policy under certain conditions. In most cases, permissive use applies only if the person drives your car up to 12 times a year.
The terms and conditions of permissive use vary greatly from provider to provider. It is not usually applicable to household members but may apply to a friend. If an immediate family member living in your household wants to borrow your car, they might have to be listed as an insured person on your policy for coverage to apply. Your insurance agent/provider will be able to help you with more information.
2. Consider Adding The New Driver To Your Policy
If a relative wants to borrow your car for a few days, you could consider adding them to your policy for a nominal price instead of buying separate coverage.
3. Find Out If Your Existing Policy Covers Rental Cars
If you plan to rent a car and already have comprehensive and collision coverage on your auto policy, many providers extend the same coverage to a rental car as long as you drive it for personal use. However, remember that your personal auto policy coverage will not apply to business rentals.
If it turns out that your personal auto policy won’t cover your rental car or doesn’t have a permissive use clause, your provider will be able to advise you on your next best option.
4. Talk To The Car Owner
If you plan to borrow a relative's or friend's car, you should talk to the owner of the car to find out what coverage they already have and if it would apply to you.
5. Specialized Short-Term Car Insurance
If you search online for short-term auto insurance, you will find a few specialty companies offering temporary auto insurance for a short amount of time like a week or 30 days. We could not verify the authenticity of these programs.
Until a couple of years ago, Michigan had seven-day car insurance coverage. It was later curbed when uninsured drivers started misusing the temporary coverage as a workaround for regular insurance when they had to register their cars.
Another major disadvantage with this type of short-term car insurance is that your temporary coverage could easily lapse while you are still on the road. If you are caught driving without insurance, the penalties could be severe. You would get a ticket as well as have your driver's license suspended.
Also, a lapse in coverage – even if it was just for one day – could cause your premiums to go up when you apply for coverage the next time. And if you cause an accident while driving without insurance, the other party could sue you for your assets.
6. Non-Owner Car Insurance
One way to cover yourself in a short-term situation where you rent or borrow a car is to buy non-owner car insurance coverage. In most cases, this will include only liability coverage, which will pay for bodily injuries and property damage to others if you’re at fault for an accident. It will not pay for any damages to the vehicle you were driving.
If you frequently rent cars, non-owner insurance premiums can be cheaper than buying liability coverage from the rental company every time. Non-owner car insurance can also be used with an SR-22, which makes it an option for people who are legally required to carry it regardless of whether they own a car.
Many popular auto insurance companies offer non-owner car insurance. However, since it is not a standard coverage, it may not be featured prominently on company websites. You would need to find out more details by calling the customer service helpline.
7. Regular Insurance With Monthly Payments
Instead of buying short-term insurance from lesser-known providers, you can also consider signing up with an established auto insurance company with a monthly payment schedule. You can cancel the coverage when you no longer need it. Some providers may charge a cancellation fee, which is usually $25 to $50 or a percentage of your premium. You could also find a provider that doesn’t charge a cancellation fee.
8. Usage-Based Insurance
Another alternative for short-term car insurance, especially if you don’t plan to drive a lot, is a usage-based program that tailors your rates to your mileage. If you are a safe driver, this could qualify you for a great insurance discount.
9. Rental Car Insurance
If you rent a car from a car rental agency, you should be able to purchase insurance coverage through it. While this typically costs more than what you would pay if you bought through an insurance company, many people choose this option to avoid the hassle of dealing with multiple parties in the event of an accident. It is also an easier option if you plan to use the rental car only for a few days, such as a weekend trip.
The insurance coverage you purchase at the rental counter can be of the following types:
- A loss or collision damage waiver that stops the rental company from holding you responsible for loss or damage to the car
- Supplemental liability insurance to cover injuries or property damage to others if you cause an accident while driving the rental car
- Personal accident insurance for medical and death expenses for you and your passengers
- Personal effects coverage for any items that are stolen or damaged from the car
10. Credit Card Coverage
While not strictly short-term insurance, some credit card companies provide coverage for a rental car if you pay for the rental with your card. This type of coverage can be primary or supplemental. If you have primary coverage, it will apply first. So, if you have an accident, this coverage will decrease your chances of having to file a claim on your personal policy.
If your credit card offers secondary coverage, this will only pay for costs not covered by your personal auto policy.
Please note that the coverage offered by your credit card may protect you from things like theft, damage, towing, or loss-of-use of the rental car but not injury or property damage to others if you are at fault in an accident. Talk to your credit card company before you rent a car to understand what is covered.
Where To Get Short-Term Car Insurance
Short-term car insurance would be nice to have, but it can be difficult to find a credible provider that offers coverage for shorter than six months. If you’re looking for short-term car insurance options, we recommend first looking into your own policy or the owner of the borrowed car’s policy.
Top providers like Geico and Progressive, which ranked highly in our recent review of over 30 of the best auto insurance companies, may offer non-owner car insurance as well as usage-based programs. We recommend getting several quotes to find out which provider can match your needs, both in terms of coverage and cost.
Whenever you shop for car insurance, we recommend getting quotes from multiple providers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, vehicle make and model, and driving history can affect your premium, so what’s best for your neighbor might not be best for you.
Use our tool below to start comparing free car insurance quotes:
Geico: Best Overall
USAA may have the best auto insurance coverage for military families, but for most others, Geico has the cheapest car insurance among all mainstream providers. In addition to several discounts that reward customers for things like having good driving records, group memberships, or anti-theft devices in their cars, Geico also recently introduced a usage-based insurance program called DriveEasy. Geico has an A++ rating from AM Best and an A+ from the Better Business Bureau (BBB).
Geico’s non-owner liability coverage is not listed on the company website, so it would be a good idea to call the company for more information. Geico also doesn’t charge fees for canceling your policy, which is another thing you might want to keep in mind if you decide to go for regular insurance coverage.
To learn more, read our full Geico auto insurance review.
Progressive: Best For High-Risk Drivers
Progressive offers standard insurance rates for almost all drivers and wrote over $31 billion premiums in 2019 alone. The company may sell non-owner car insurance and also has a huge number of insurance discounts that can help you save money on your premiums. If you are a safe driver and drive less, its usage-based program, Snapshot, would be worth giving a try.
The Progressive website also has a Name Your Price tool, where you can specify your budget to see a range of coverage options that fall within your price range.
To learn more, read our full Progressive auto insurance review.
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