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Temporary Auto Insurance: Why and When Is It a Good Idea?

Updated: October 24, 2017

For anyone who is thinking about using a car for a brief period of time, temporary auto insurance is a very useful option.

This type of temporary insurance can exist for a single day or six months, depending on the user’s specific needs.

These temporary insurance plans provide a minimum level of coverage where liabilities are concerned. This ensures the person in question is driving a vehicle that is legally allowed to be on the road and is not in violation of any state or federal laws.

Temporary auto insurance also protects the driver from having to pay thousands of dollars in damages in the event of an accident.

Why Get Temporary Auto Insurance?

If someone is planning on selling their car in the next few weeks or months, a short term car insurance policy is the best way to go. This ensures that they can get a new car insurance policy for their next vehicle, while still having temporary insurance in case of an emergency.

In some circumstances, it also makes more financial sense for a person to get a month to month auto insurance policy, instead of committing to a long-term contract.

If someone is looking to borrow a car from a friend, or loan their car out to someone else, temporary auto insurance makes sense for either party.

This type of insurance also makes sense for someone who needs to drive a newly purchased car, but has not selected a permanent insurance policy yet.

In some circumstances, it also makes more financial sense for a person to get a month to month auto insurance policy, instead of committing to a long-term contract.

Temporary insurance is also necessary in some rental car situations. If your current insurance policy, or credit cards, do not provide enough coverage for a rental car, it is better to get temporary insurance than take the risk of paying a huge sum in damages because of an accident.

Importance of Auto Insurance

No one plans on getting into an accident or having their vehicle stolen when they are not around. However, auto insurance can help protect these people when such unforeseen circumstances take place.

The vast majority of people will probably never need temporary auto insurance. However, there are circumstances where a short term car insurance policy becomes a necessity.

In addition, it is the law to have some form of car insurance when driving on the road in every state. Even if someone is not planning on keeping their car on a permanent basis, it is better to get temporary insurance instead of running the risk of driving without any type of coverage.

The vast majority of people will probably never need temporary auto insurance. However, there are circumstances where a short term car insurance policy becomes a necessity.

These types of insurance policies offer liability, collision and comprehensive insurance coverage. While some policies may not include all the coverage, it is easy to enquire about the coverage associated with a particular policy.

Liability insurance covers the other party in an accident, while collision coverage protects the car. Comprehensive coverage deals with damages not associated with an accident, such as theft or vandalism.

Do You Have a Covered Vehicle?

When considering the merits of a short term car insurance policy, it is important to know whether a person already has coverage. All the 50 states in the United States require a minimum level of liability coverage, which means anyone owning a car has this policy.

For those who have complete car insurance coverage, which includes collision and comprehensive insurance, there is really no need to get temporary insurance for a rental car.

With most insurance policies, this minimum coverage extends to a rental car. If someone is comfortable with the minimum level of coverage for their rental car, getting temporary auto insurance is not a necessity.

For those who have complete car insurance coverage, which includes collision and comprehensive insurance, there is really no need to get temporary insurance for a rental car.

But if someone does not own a vehicle, it is very important to get temporary auto insurance. Some rental companies offer their own insurance, but a separate, more comprehensive policy might make more sense. Also, getting a short term car insurance policy is often cheaper than the rental company’s own policy.

Most major auto insurance companies in the United States offer this temporary auto insurance for existing and new customers.

Temporary Auto Insurance for Car Borrowing

It is not uncommon for people to borrow cars from friends or family members. As long as the borrower has a driver’s license, there is no issue with this.

For anyone who borrows cars frequently, it is better to take precautions and get a short term car insurance policy. There are even “car insurance for a day” policies available for extremely short-term situations.

However, it is also important for car borrowers to consider getting temporary auto insurance for the vehicle. This is because many insurance policies only come into effect if the policy’s owner is the one driving the car at the time.

If someone gets into an accident with another individual’s vehicle, this can represent a problem. Without coverage, the car’s owner or the current driver would be on the hook for the damages associated with an accident.

For anyone who borrows cars frequently, it is better to take precautions and get a short term car insurance policy. There are even “car insurance for a day” policies available for extremely short-term situations.

By getting a temporary policy, the borrower ensures they are protected in any emergency situation. In addition, it gives the car’s owner peace of mind with regards to giving someone else their vehicle for an extended period of time.

What About Car Sharing Sites?

Peer-to-peer, or P2P, car sharing sites are all the rage now. It allows a car’s owner to rent their vehicle to someone else for a certain period of time.

Not all P2P car sharing websites offer insurance for the borrowed vehicles. But some car sharing sites take a fee for each transaction, which goes towards paying for minimum insurance coverage for the car.

This is useful if someone owns a car but does not drive it very often, or is going out of the city/state/country for an extended period of time. Instead of letting the car sit there, it is rented out and the owner gets money in return.

Not all P2P car sharing websites offer insurance for the borrowed vehicles. But some car sharing sites take a fee for each transaction, which goes towards paying for minimum insurance coverage for the car.

However, it might still be a good idea to get a short term insurance policy while borrowing through a P2P car sharing site.

If the borrower has their own temporary auto insurance policy, they do not have to worry about the level of coverage provided by the insurance that the car sharing site is offering. This provides greater protection and peace of mind to both the car borrower and lender.