There are times you may need short-term auto insurance, driver or situation. Sometimes a solution may appear to be pretty easy like buying a policy for rental vehicles from the hire company. However, you may later find out that you have wasted money since you already had coverage for it. Understanding the circumstances well help agents suggest the best product and help you address the issue appropriately. This post will look at various scenarios and try to come up with the best answer for each.
- What Is Short Term Car Insurance?
It can be defined as insuring vehicles, drivers and situations for a limited time only, rather than buying a standard 6 monthly or yearly policy. Depending on circumstances, it may require only slight adjustments on an existing plan, set up a new one that can be adjusted as needed or buy a totally different one. So, a standard policy may solve a transitionary need or it may be necessary to arrange a non-standard one.
- When Would You Need Temporary Auto Insurance?
There can be tens of reasons why would anyone be looking to arrange it and some of them are listed below.
Additional Drivers: This may be the case when you have a houseguest for a short period of time. The fact that they live in your house complicates the situation to a point that you may need to include them specially.
Additional Vehicles: You may find yourself in a situation needing to protect an auto for a limited time frame for handful of reasons. Buying one on the spur of the moment and wanting something to tie you over until you know what to do with it can be a good example.
For a Situation: Again, you may need to make sure that certain activities are taken care of no matter how long the arrangement is for. Using it for business for a specific period can be a good example here.
- When Does a Current Policy Offer Transitional Solutions?
Before you start looking around you should probably check if an exiting coverage includes the situation you are in. Have a look at various scenarios described below to see how helpful a current arrangements can be.
Does my Automobile Insurance Cover Rentals?
A standard policy provides the same as the existing protection for occasional rental vehicles too. However, the key word here is “standard” in every sense. You need to check if yours has any special exclusion before assuming an automatic inclusion. Also, it may only be available for a similar type of an auto. For example, if you have a cheap sedan you really have to check before going ahead and renting a high-end sports car for the weekend. Also, any commercial vehicle and rental vans like U-Haul may be excluded.
Can I Add a Driver to my Insurance for A Period Time?
The answer is definitely yes, providing there aren’t special conditions excluding certain people (say under the age of 25). You should be able to add or remove them as necessary. In some cases, you may not even need to contact them as most of them include occasional usage. For example, a friend can use the car for couple of hours with your permission. Or a brother visiting you from out of town for a few days can use it without the need to inform the company.
However, you probably have to inform them and pay additional premium if an au pair moved in to look after children for couple of months. Also, you may have to include a girlfriend or boyfriend if he or she is driving the auto more often than occasional, regardless of living arrangements.
Can You Make Temporary Adjustments to Vehicle Insurance?
At times, you may need to make special alterations to it. This may be possible to deal with a special situation. For example, you may have just started a work and the company hasn’t allocated a car for you yet. You may ask them to include business use for the personal automobile for a short period until all sorted.
- Temporary Insurance for Own Vehicle
People may buy automobiles with the intention of keeping for a short period and they need to be protected as long as they are kept. The solution depends on how long you want to keep it and if you have anything already in place.
If you have an existing coverage the new car is automatically included for few days until you decide what to do next. A good example is that you just bought a new auto to replace the old one. You may need to have two of them on for a time until you sell one. If it will happen in the next 3 – 4 days you may not have any problem. Otherwise, you should be allowed to add the new car on the policy until you find a solution and pay additional premium.
In any case, you will probably need to cover a new vehicle you bought before you can register it. If you don’t have any policy to add the vehicle on, you may either look for non-standard short-term automobile insurance for it or buy standard one and cancel when you sell it. The best and cheapest transitory solution depends on how long you want to keep it.
- Temporary Automobile Insurance When You Don’t Have an Existing Policy
You still have to make sure that the automobile you drive has at least minimum liability when you don’t have anything to fall back to.
Temporary Insurance for Rental Cars
When you currently don’t have anything the easiest way of dealing with rentals is buying the rental company package. Otherwise, you may want to arrange non owners coverage for the liability and buy additional Collision Damage Waiver (CDW), Loss Damage Waiver (LDW) or Towing from the hire firm. A non-owners plan would only make sense if you often rent.
Alternatively, you could check with a credit card provider as some credit cards provide rental vehicle coverage. It is usually secondary to any policy you may have or buy but it would be primary if you don’t have any in place.
Can I insure a Car Registered to Someone Else?
Typically, registered keepers purchase it. If you want to drive someone else’s automobile you need to check if they have coverage for you. If the owner has a policy you should normally be included, unless there are special restrictions preventing all or some occasional drivers. If you have own one it would be secondary for driving someone else’s car.
If there is nothing in place you will probably have to persuade the owner to buy a policy to include you. It is usually either not possible or difficult to cover a car that is registered to someone else.
Short Term Auto Insurance for Registration Purposes
When you buy a new vehicle you need proof to register it in most states. If you are thinking of buying a policy for a car you own and cancel it after registration you should think again. You are required to keep at least liability coverage for it as long as you own and not just for registration purposes. You should probably read our post titled; Do I Need Coverage for a Car I Don’t Drive before getting into trouble with DMV.
- Short Term Car Insurance on Vacation Homes
If you bought an auto to keep in a vacation home and registered it in the vacation home state you will now need to comply with the minimum requirements in there. But this can be tricky and costly if you don’t do it right. These are used only when you are there. But it may not be allowed or practical to place them on risk only when you operate them, especially if family and friends use the home and vehicle as well.
One solution may be to have full coverage when you are driving and reducing it to fire and theft when you are back to the main residence. This may require you to fill off-road declaration with DMV each time and keep it in the garage. This brings us to the next solution that may work pretty well.
- Pay As You Go Policies As Temporary Vehicle Insurance Solution
Pay as you go prices are based on driving history and mileage and may be arranged on monthly payment bases. So, you would pay high premium when you travel a few thousand miles and very little when you don’t use. This will eliminate the need to drop coverage when the it isn’t used and increase when it is back on the roads since the mileage is recorded by telematics. Also, you won’t need to bother with DMV notifications.
It may be a perfect solution for vacation home autos. Furthermore, it is a good cheap option for retired people with low mileage, people who are working from home or taking public transport to work, people with a second automobile, and high-risk drivers that have a point to prove.
There are few choices in the telematics arena. Some only check the mileage while others may look at all sorts of habits like speeding, braking and travelling times. The only downside may be that they will install a monitoring device to the automobile and it may be seen as intrusive.