When to buy short-term car insurance

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When to buy short-term car insurance:
3 main types of temporary car insurance:
Price and terms of short-term car insurance

Short term car insurance, also known as temporary car insurance, provides the same coverage as regular car insurance for a shorter period of time. Regular auto insurance policies last from 6 months to one year. Temporary auto insurance can be purchased for periods ranging from one day to two months, depending on the provider.

In the United States, driving without car insurance is illegal. If you get caught, you face huge fines, points and possible suspension of your driver's license, as well as higher rates on later insurance policies due to hits on your driving record. Also, if you get into an accident without insurance, you may end up paying medical and property damage costs for a long time to come.

When to buy short-term car insurance:

People take out temporary auto insurance policies for a variety of reasons to refrain from driving when coverage expires. Here are 12 cases where you can buy temporary insurance:

1. Between auto insurance policies. If you change providers at a time when it doesn't automatically cover you, temporary insurance can fill the protection gap.

2. Concerned about the limits of liability. If you are concerned that the minimum insurance may not cover an already insured vehicle for damages, you can take out short-term insurance as additional coverage.

3. Rent a car outside the city. You can purchase car rental company insurance for the duration of your car or choose another provider.

4. Dodging insurance prices when renting a car. If you plan to drive your rental car multiple times or for several months, temporary insurance may be cheaper than the rental company's fees.

5. Borrowing a car from a friend or family member. You can use their car while your car is being repaired, or you are in between vehicles for a short while. If you are a guest and they have loaned you their car, it would be wise to take out some sort of insurance. Don't assume that the car you're borrowing is covered by someone else's policy.

6. Short-term vehicle ownership. You still want to insure your car, no matter how short the period of ownership. This may apply to a long vacation or business trip, or to a car that you buy only for resale.

7. Your car will be in storage. To protect your vehicle from damage that may occur during storage, it may be wise to take out a short-term insurance policy.

8. You are selling a car soon. Your old insurance policy may still be valid and you want to sell your car without losing coverage. You may also want to protect it from test drivers.

9. Instant lighting while driving a new car from a parking lot. You don't want to take risks, especially with a new car that may have higher maintenance costs.

10. Coming home from college for a break. During your visit, you may only need a car for a few weeks, but you should make sure you are insured.

11. Van rental coverage. Make sure your regular auto insurance agency covers rental vans - otherwise, you should consider temporary insurance.

12. Driver of a company car. If you don't have a car you share, you still want it insured.

3 main types of temporary car insurance:

Short-term car insurance still provides the same coverage as long-term insurance policies, which typically auto-renew every 6 months or a year. It can be added to existing policies or replaced with standard coverage. Temporary insurance exists in many forms, but the main ones are 3:

1. Insurance of non-owners. Non-owner insurance protects those who do not own their own car but sometimes find themselves driving another car. Non-owner policies include liability for medical bills in the event of an accident due to fault, as well as additional protection.

2. Gap insurance. Gap stands for Guaranteed Asset Protection and protects you when your regular insurance only covers the amount your car is worth. The value of a car decreases significantly as it gets older, and major repairs can exceed the cost of a new car. If your car is involved in an accident, break insurance will take care of the additional costs and should be considered if you have invested less than 20% in paying for your car and have financed it for 5 or more years.

3. Rental car insurance. Your regular insurance may have limited rental car coverage, or you do not own the car and therefore do not have auto insurance. Car rental companies will offer insurance or additional coverage plans such as liability protection, loss and damage waiver, accident and personal effects insurance. Prices from rental agencies can be high, so be sure to look for third party temporary insurance policies.

Price and terms of short-term car insurance

As with regular insurance policies, the insurance company will take into account your location and the make and model of your vehicle before pricing you. The companies will also take into account any notable marks in your driving record. Short-term insurance is often more expensive than long-term insurance, but it is only meant to cover needs for a limited period of time.

Before aiming for an affordable price, make sure you meet these requirements to purchase term insurance: