Short-Term Car Insurance
(Here's what you need to know about short-term car insurance.)
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Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
If you are searching for temporary car insurance, you will probably come across websites and unscrupulous agents claiming they offer one-day auto policies. The truth is, you may only need the coverage for a single day, but the majority of these policies are written to cover you for about 30 days.
Perhaps the misinformation is due to the rental car coverage that is offered when one opts for the additional liability coverage at the counter. The reality is this policy isn’t so much car insurance as lawsuit protection coverage.
Whether you need car insurance for one day, a week or a month, rather than the coverage for six months to a year offered by traditional policies, it’s important to know that what you are really looking for is short-term car insurance.
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The Kind of Car Insurance You Actually Need for One Day
Even if you only need it for one day, short-term car insurance usually lasts about a month. Just like traditional car insurance, coverage can vary depending on the options you choose and the type of policy you buy.
You can opt for liability-only coverage, or a comprehensive policy that can help pay for repairs in the event of a collision, vandalism or act of nature.
Also like its cousin, traditional car insurance, short-term auto policy premiums depend on a variety of factors, such as the make and model of car, where you will be driving it, your driving record, and your age.
Short-term policies are generally more flexible and less expensive than purchasing a traditional policy or changing an existing one. It doesn’t make sense to place a visiting relative on your full-length car insurance policy, especially if they have a history of car crashes.
Adding a bad driver can considerably increase your full-length auto insurance rates. There is another benefit of keeping a separate one-day or short-term policy for unusual needs or circumstances: Should you need to file a claim on your short-term policy, it won’t affect your claims-free discount on your full-length policy.
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Who Should Consider Temporary Car Insurance?
Jason never thought lending the keys of his prized Mustang to his cousin would end up being such a costly mistake. While on his way to work with the borrowed car, Jason’s cousin, who had been living with Jason’s family temporarily, was broadsided by an uninsured driver, which completely totaled the car.
Jason was under the impression that his car insurance would cover the damage, and finding out the repairs would have to come out of his own pocket hurt almost as much as seeing Sally’s broken and battered body.
While most auto insurance policies cover any driver who has been given permission to use the car, and can protect against damage caused by an occasional driver, Jason’s car insurance was valid only for the family members who had been named as part of the household.
Had Jason or his parents told their agent about the new family member living with them, or if Jason’s cousin had purchased his own one-day insurance or short-term policy, Sally could have been back on the road in no time, and Jason would have avoided heartbreak and awkward tension between him and a family member.
This type of protection is a wise decision in a variety of circumstances, including:
- Your car is in the shop and you are driving another person’s vehicle.
- You are in the process of buying a new car and are test-driving several options.
- You are lending your car to a family member or friend (don’t be like Jason) or anyone else excluded from your full-length policy.
- You are selling your car and need it covered short-term for those who will be test-driving it.
- You are in the process of switching full-length insurance policies or companies.
It’s Only a Day. Is It Really Worth It?
Unfortunately, some people learn the hard way that forgoing car insurance – even for just one day – can cost thousands of dollars. Fortunately for Jason, no one was injured in the crash that wrecked his baby. While the average property damage claim for car crashes is more than $3,000, just one injury costs an average of more than $15,000.
It may be a matter of needing insurance for a single day, week or month, but a crash can happen in mere moments. Say a coworker wants to borrow your car on her lunch break. No big deal, right?
It’s only an hour or two. According to the National Highway Traffic Safety Administration, more than a million vehicle crashes occur during lunch hours every year. This is exactly when one-day car insurance can help.
In the event you plan to rent a car or moving van, it’s especially important to protect yourself from the costs of a crash. Driving an unfamiliar vehicle on unfamiliar streets or highways can increase your chances of being involved in an accident.
What Do I Need to Find the Right Policy?
- Make, model, year and VIN of the vehicle.
- Your name, address and driver's license, or that information for the driver you want to insure on your vehicle.
- The driving history of you or the other person.
- Tell your agent exactly what you need the insurance for and for whom. They may be able to help you print out your insurance card right away for immediate use.
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