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What is Short-Term Car Insurance?

Last Updated on December 11, 2023 by a2z_admin


Short-term car insurance is like a temporary version of regular car insurance. Instead of having coverage for the standard six months, this type of insurance only lasts for a shorter period, like a month.

People usually get short-term car insurance when they only need coverage for a little while, according to Mark Friedlander, who works for the Insurance Information Institute.

Big car insurance companies usually don’t offer this short-term coverage. You might need to look for it from a smaller company. So, if you decide short-term car insurance is what you need, make sure to check that you’re getting it from a good and trustworthy company.

How Does Short-Term Car Insurance Work?

In many states, it’s a rule for drivers to have car insurance, even if they’re just borrowing a friend’s car for a short time. Imagine you’re in a situation where you need a car for a few months, but you don’t want to commit to a long-term insurance plan that lasts six or 12 months. That’s where short-term car insurance comes in.

Usually, a short-term car insurance plan offers basic liability coverage. This means it helps pay for the damage to other cars or property, and it covers injuries to other people if you’re the one driving. It’s important to note, though, that this type of coverage doesn’t pay for your injuries or any damage to your own car.

Not having any coverage at all could end up costing you a lot in repair, medical, and legal bills. So, getting short-term insurance for the time you’re borrowing a friend’s car can be a smart move to protect yourself and others on the road.

When Might You Need Short-Term Car Insurance?

Sometimes, you might find yourself in situations where you need temporary car insurance. Here are a few instances when this could happen:

  • Borrowing a Car: If you’re borrowing a friend’s or relative’s car for a short time, like just a few hours, you might not need temporary coverage.
  • Renting a Car: When you’re renting a car for a few months, you might not have to worry about additional temporary insurance if you purchase coverage from the rental car company or use a credit card that offers rental coverage.
  • Car Repairs: If your own car is in the shop for repairs, and you need to drive another person’s car in the meantime.
  • Road Trip in Someone Else’s Car: If you’re on a road trip and driving someone else’s car for the journey.

How Much Does Short-Term Car Insurance Cost?

You might wonder if short-term car insurance is cheaper because it only covers you for a short time. However, that’s not always the case. Short-term insurance is a special kind of policy, and it might end up costing you more each month compared to a regular long-term policy.

Let’s take a look at an example with Hugo, a short-term car insurance company. Hugo gave a quote of $22 per week for the minimum required coverage in Ohio, which adds up to $88 per month for short-term car insurance. In contrast, our study on Ohio car insurance rates found that a standard policy with the required minimum limits costs an average of only $31 per month.

To get an idea of how short-term car insurance prices compare, you can look at the average costs of regular car insurance policies:

  • The average nationwide cost for full coverage car insurance is $2,150 per year, which is about $179 per month.
  • For the minimum required car insurance, the average cost is $467 per year, or around $39 per month.

Just like regular auto insurance, the cost of short-term coverage can vary based on the choices you make and the type of policy you go for. According to Friedlander, who knows a lot about insurance, you can choose a policy that only covers liability or go for a broader one that includes collision and comprehensive insurance.

Friedlander points out that a typical short-term car insurance policy lasts at least 30 days, even if you only need coverage for a day or a week. Just like with regular policies, the price for short-term coverage depends on things like:

  • How you plan to use the vehicle (for personal or business use)
  • Where you live
  • The type of car you have
  • Your past history with auto insurance
  • Your credit-based insurance score (though some states, like California, Hawaii, Michigan, and Massachusetts, don’t use credit to set auto insurance rates)
  • Your driving record

Other Options for Getting Short-Term Car Insurance

Alright, so what if you can’t get yourself a month-long car insurance plan? Don’t worry, there are other options you can consider:

  • Non-Owner Car Insurance : If you don’t own a car but still need coverage, non-owner car insurance could be the way to go. This type of insurance is handy if you often rent cars. It saves you from having to purchase liability coverage from the rental company. It can also step in to cover you during those times when you’re in between your own vehicles.
  • Canceling a Regular Car Insurance Policy: Another route is getting a standard car insurance policy and canceling it once you don’t need it anymore. Keep in mind, though, that some states may charge you a fee if you cancel your car insurance early. Before making any decisions, it’s a good idea to check whether a cancellation fee applies in your situation.
  • Mileage-Based Insurance: For those of you who don’t hit the road too often, a mileage-based insurance policy might be the perfect fit. With this type of policy, your insurance rate is based on how much you drive. So, if you’re not putting a lot of miles on the odometer, this could be a cost-effective choice for your car insurance needs.

Remember, there are different ways to make sure you’re covered, even if it’s not for the standard 30-day period. Choose the option that works best for your situation!

Here Is A List Of Important FAQS

Short-term car insurance is temporary coverage that typically lasts for a brief period, like a few days to a few weeks. You might consider it when you need insurance for a short-term situation, such as borrowing a friend’s car or renting a vehicle for a weekend trip.

Unlike regular insurance policies that are typically annual, short-term car insurance provides coverage for a shorter duration. It’s designed to meet temporary needs, offering flexibility without a long-term commitment.

Yes, you can. Non-owner car insurance is available for individuals who don’t own a vehicle but may need coverage when driving rented cars or borrowing cars occasionally.

Age requirements may vary, but many short-term car insurance options are available to drivers who are at least 18 years old with a valid driver’s license. It’s essential to check the specific requirements of the insurance provider.

The application process for short-term car insurance is usually quick and straightforward. In many cases, you can get coverage on the same day you apply, making it a convenient option for last-minute needs.

Yes, you can often cancel short-term car insurance before the term expires. However, it’s crucial to be aware of any potential cancellation fees that may apply. Check the terms and conditions of your policy and consult with the insurance provider if you have questions about cancellation.

About the Author

Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.

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