Short-term auto insurance options and availability

Key takeaways of Short Term Auto Insurance

  • Most standard US auto insurance providers do not offer true short-term coverage for the cars you own.
  • You can get short-term auto coverage for rental cars either through the rental car company or from a third party.
  • Non-owners insurance or usage-based insurance are two types of affordable auto insurance.

Short Term Auto Insurance Basics

Standard auto insurance, like what you’d buy from Geico or State Farm, is generally only available in increments of six months or more. But if you’re borrowing a friend’s car for a road trip or home from college temporarily, you don’t want to invest in six months of insurance premiums. You also don’t want to get behind the wheel without insurance, which would put your finances and driver’s license at risk. And now, you’re looking for short-term coverage or a temporary auto insurance policy.

Here is the sad truth. In the US, short-term auto insurance is not widely available. Most auto insurance providers simply don’t offer a two-week or even a two-month policy. But that doesn’t mean you’re out of luck. There are auto insurance products available that can do the job for you at an affordable price. Read on for an overview of five types of short-term auto insurance, along with how you’d use each.

Types of short-term car insurance

Non-Owner Auto Coverage

Non-owner auto coverage is liability insurance attached to you as the driver. While standard auto insurance insures specific vehicles, non-owner auto insurance gives you liability protection no matter what car you drive. This is technically not a short-term policy; you still have to buy a six or 12 month term. But non-owners insurance is cheap for good drivers and will keep you from getting arrested for driving without insurance.

When Non-Owner Auto Coverage Is Appropriate

Non-owner auto coverage is appropriate if you don’t own a vehicle, but plan to drive someone else’s car regularly, or even for an extended road trip. It is important to note here that there is a difference between borrowing someone’s car once and borrowing the same car often. Borrow a car once with the owner’s consent, and the owner’s insurance policy should cover you when you’re behind the wheel. But you will lose that coverage if you repeatedly drive the other person’s car. This is because insurance companies want all regular drivers to be listed on the policy. If you cause an accident and the insurer can prove that you were driving the car, the claim will likely be denied.

For that reason, you must have a current non-owners policy if you drive someone else’s car. That way, you know that you are at least protected from any liability claims if you cause an accident.

Standard Auto Coverage

Technically, you could buy a six-month policy from any auto insurer and then cancel it after 30 days. However, this is not a strategy that we would recommend. Because the next time you try to get auto insurance, you’ll see higher rates. Insurance companies interpret inconsistent coverage history as a red flag. And with regard to any type of insurance, red flags are expensive.

When is standard auto coverage appropriate?

If you’re the college student staying home temporarily, your parent’s auto insurer may be willing to list you as a covered driver for the summer. Contact the insurer to learn about your options. If your insurer can’t or won’t make the change, consider non-owners coverage.

A standard policy might also be the right solution if you own a car but don’t drive it much. Instead of keeping coverage for only a specific period of time, keep the car insured indefinitely with minimal coverage. Then, when you plan to drive, extend your coverage temporarily.

Pay-Per-Mile Insurance

Pay-per-mile insurance charges you based on the number of miles you drive. The insurer will review the usual qualifications, such as your driving record, what type of car you drive, and where you live. Based on that information, you will be assigned a rate per mile. She will keep a device in her car so her mileage can be tracked. And then your monthly bill will fluctuate depending on how much you drive. If you rarely drive, a pay-per-mile plan can save you quite a bit compared to a traditional auto policy.

When is usage-based insurance appropriate?

Typically, you must own the car you are insuring with a pay-per-mile policy. But let’s say your car spends most of its time in the garage or in storage. Maybe you take it out for two weeks each year for a trip. In that case, a pay-per-mile policy would be an inexpensive way to get year-round coverage. This is a much better option than being without insurance for most of the year, which would leave you unprotected if your car is damaged or stolen while in storage.

Rental car insurance

Rental car insurance is the closest thing to a true short-term car policy. You can get rental car coverage by the day from the rental company or from a third-party provider like Insure My Rental Car or Rental Cover.

When is rental car insurance appropriate?

If you already have collision, comprehensive, and liability insurance on your own vehicle, those coverage should temporarily transfer to your rental car. If you don’t own a car or only have liability insurance, you’ll need to purchase additional coverage from the car rental company or a third party. Your rental car provider will enforce this by requesting proof of insurance.

If you cannot provide proof of all three coverage, you will need to purchase your insurance. Know that the daily cost of insurance from the rental company may be higher than the cost of the car. Give yourself options by comparing and arranging for rental coverage before you get to the car rental counter.

Credit card coverage

Visa, Mastercard and American Express credit cards provide free rental insurance when you use the card to pay for your rental vehicle. This is usually secondary coverage, which means it pays for bills not covered by your regular auto insurance provider. Credit card coverage may pay your deductible, for example, but your insurer would pay the rest of the claim.

When is credit card coverage appropriate?

Credit card coverage is a suitable form of short-term supplemental coverage on a rental car, but it only helps you when you have existing insurance on a separate vehicle you own. Your insurance would still provide liability and be the first payer on comprehensive or collision claims.

If you currently do not have auto insurance, you must purchase rental auto coverage over the counter or from a third party.

When you lend your car to someone else

By now, you know what to do with a vehicle you borrow or lease, but what if you lend it to someone else? As long as you don’t regularly lend the car to the same person, the other driver should be covered by their existing insurance. If the same person needs to use your car more than once or twice, you have two options. You can ask your friend to get non-owner coverage. Or see if you can list your friend as a driver on your auto policy. This is easier to do if you both live at the same address.

Short or long term, don’t drive without insurance

Even if you only plan to drive for a short period of time, going without insurance is not worth the risk. If you have a car, try a pay-per-mile plan that will keep your costs to a minimum, unless you’re driving. If not, look into non-owner coverage. Either will protect you, financially and legally, without emptying your bank account.