Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 18, 2021

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Since car insurance, in some form, is mandatory in all 50 states, and since coverage requirements vary from state to state, it’s important for car owners to know where they stand with their policy on an annual basis. If conditions change in such a way as to affect the coverage of your policy, one option is to get temporary car insurance until things return to normal.

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The reasons for purchasing temporary car insurance, who might need it and the typical costs of temporary coverage are reviewed below.

What are the reasons for purchasing temporary car insurance?

One of the most common occurrences that create the need for temporary car insurance is an extended visit from out-of-town guests. Your guests that come in for a day or two and drive your car to a wedding, for instance, will most likely be covered under your normal policy. But if those guests stay for three months, and you give them exclusive or semi-exclusive use of your vehicle, they will probably need a separate policy.

You might think it’s a better idea to simply add these guests to your existing policy for the time they will be in town. Though it’s possible to do so, such a decision may cause two problems.

First, is the fact that your insurance carrier will most likely be unwilling to give you anything less than six-month policies. If your guests are only staying for three months, you’ll be paying for time you don’t need.

Second, and more importantly, is the effect an accident will have on your auto insurance. Accident claims usually cause insurance premiums to go up. If one of your guests has an accident while covered on your policy, your auto insurance rates go up even after he goes home.

With a short-term car insurance policy, your regular policy is unaffected by the actions of your guests.

Other reasons for purchasing short-term car insurance, among those who already have regular policies, include borrowing a car while yours undergoes long-term repairs, purchasing a cheap, used car for a temporary, out-of-town work assignment, or loaning your student a car while he’s away at school.

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Is there temporary car insurance for non-owners?

Searching for short-term car insurance can be challenging and you might not find specific coverage offered by traditional auto insurance companies, however, there are other options available such as lending a vehicle from a friend or renting a vehicle from a rental car company.

People who live in large cities with public transport may not own their own car. You may be a resident of Chicago with access to trains, buses, and taxis to meet all of your transportation needs within the city. But what if you want to drive down to Nashville for a two-week visit with your sister? If you choose to rent a car from a rental company, you’ll need to be insured for the rental period.

Car owners are covered by their own policies for rentals in most cases. But, since you don’t own a car, you must purchase temporary insurance from someone. The rental car coverage offered by the rental company is an option; however, a temporary car insurance policy from a reputable insurance company is a better one. It will cost less and cover more.

Two-week  car insurance is a relatively new option for drivers in the US because it’s designed to meet temporary coverage needs. So if you need to borrow or rent a vehicle for a short vacation, weekly car insurance or temporary auto insurance might be the best option.

What’s the cost of temporary car insurance?

The first thing you need to know about the cost of temporary car insurance is that it’s higher than standard insurance when measured on a per-day basis. The convenience of the policy, combined with the higher risk/return ratio the insurance company takes on, makes a higher premium necessary. The good news is that the policy will still have the proper amounts of coverage for the state you’ll be driving in. Consider these facts:

Rates vary by auto insurance policy, but finding a minimum liability policy starting around $19 or $20 per month is fairly common. You probably won’t be able to find a shorter term through a normal car insurance company, with the possible exception of a policy for a rental. Such policies average $10 to $15 per day.

The risk to the insurer on temporary car insurance policies is relatively high, and because of their short term nature, they don’t generate a lot of return on investment for the company. Therefore, they make their money by charging a fee for establishing a temporary policy. The fee generally hovers around $50 per policy period.

If you purchase a one-month policy for an out-of-town guest who ends up staying an extra month, you pay the premium plus a second fee to extend the policy. That makes it important for you to make sure you have the right amount of coverage so you don’t pay the fee more than once.

Temporary car insurance can be a bit more expensive per-day than an extended policy, but sometimes circumstances dictate that purchasing one is a wise decision. Next time you have a short-term driving need, consider temporary insurance.

Temporary insurance coverage has a few drawbacks as well. You might lose your down payment of 30-45 days of the total premium. Moreover, you might not be able to use the coverage immediately. Insurers have a grace period and limit the comprehensive coverage and collision insurance coverage within the first 30 days.

Who would benefit from a temporary insurance policy?

The following types of people would find short-term coverage beneficial:

  • Those visiting another country on vacation or buying a vehicle during their visit
  • Those using a rideshare service who need coverage for a vehicle they’re driving but don’t own
  • Those between vehicles
  • Those who have their vehicle at the mechanic for repairs and need to borrow someone else’s car
  • Students away from home who need coverage for a vehicle they drive sometimes
  • Those who borrow a vehicle from a friend/family
  • Those who buy a vehicle for a couple of weeks and then resell it
  • Those who drive a rental car and want temporary coverage

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