Short-term & temporary car insurance

If you only need car insurance for a short time, you may already be covered by another policy or have several options for purchasing limit coverage.


August 30, 2018

You need to have car insurance before you ever get behind the wheel of a car. Whether you have your own policy or are insured under someone else’s, you’re legally required to have car insurance in 48 out of 50 states and it could save you tens of thousands of dollars in states that don’t require it. Auto insurance protects you when you’re liable for bodily injuries or property damage you cause with your car as well as damage or loss to your own car.

Typically, car insurance has a policy period of either six months or one year. Short-term car insurance and temporary car insurance is not generally available in the United States, although you have several options if you only need to drive for a short time. (Short-term and temporary car insurance is much more frequently offered in the United Kingdom.)

Read on to learn more about how car insurance covers you in the short term:

Car insurance when you’re driving temporarily

Because it’s illegal to drive without car insurance in most states, even short-term driving can result in fines or jail time if you get caught driving an uninsured car. Additionally, you could be liable to pay for injuries and damage out of pocket, costs which may be extremely expensive for the average person.

But sometimes you need to drive a car other than your own, such as when:

  • You’re taking turns driving on a road trip.
  • Someone has an emergency and another person’s car is the only available option.
  • You’re renting a car.
  • Your car is being repaired or was stolen and not recovered.
  • You volunteer to drive other people somewhere but your car isn’t present.

Family members using your car

Family members who live under your household, including your spouse and any kids who have their driver’s license, are covered by your car insurance policy. If one of them wants to “borrow” your car, they don’t need to get any additional insurance. Although this coverage may be automatic, you may be required to tell the insurance company that other people in your household are driving the car. They may need to be listed as a “named insured” along with yourself.

If you’re unsure whether a family member is covered, check your car insurance policy and talk to the insurance company or your representative. Note that adding additional drivers to the policy may increase your rates, especially if these drivers are younger or inexperienced. If your rates seem too high, Policygenius can help you compare quotes and policies online, with one of our licensed representatives assisting you in getting coverage for your whole family.

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Borrowing a car

If you have permission to borrow someone else’s car, and that person has car insurance, you’re typically covered by the owner’s car insurance policy. You’ll be what’s known as a “permissive driver.” Make sure you confirm with the policyholder that his or her plan actually covers you, and be safe when driving the car. Although car insurance will pay any damages you’re liable for, causing an accident can raise the car owner’s rates.

You might not be covered by the car owner’s policy if you have been classified as a high-risk driver. That can happen if you’ve committed a crime while driving, such as receiving a DUI, which can exclude permissive driving.

Additionally, if you’re a regular driver of the car, the auto insurer may request that you be added as a named insured.

Renting a car

Your car insurance policy may already extend coverage to your rental car. If it doesn’t, you may be able to purchase additional coverage for rental cars. Such additional coverage is known as a rider or endorsement, and it will be especially useful for people who travel a lot.

The rental car company may also offer car insurance to you, whether or not you already have car insurance on your personal vehicle. However, rental car insurance may limit the amount you can recoup for damages you owe, and not every type of loss or damage may be covered in all circumstances. But there are some good reasons why you would want to supplement your auto insurance with a rental car insurance policy:

  • The rental car insurance may have a lower deductible, meaning your obligation for a given claim could be lower than it would under your personal policy if you cause an accident with your rental.
  • You can purchase higher coverage limits, which could come in handy if you’re driving in a dangerous or unfamiliar location.
  • If you didn’t purchase comprehensive or collision insurance for your personal car insurance policy, adding it your renters insurance policy could ensure that you don’t owe anything if the rental is damaged or destroyed by a covered peril.

If you don’t have your own auto insurance policy, at a minimum you need to purchase liability insurance from the rental car company.

You’ll have the option to purchase rental insurance whether you’re renting a car or a moving van, such as a U-Haul. But before you do, check the benefits of your credit card, especially if you pay an annual membership fee. Many credit cards come with rental car insurance.

Non-owner liability car insurance

Non-owner liability insurance covers you when you drive a car that’s not your own. If the owner of the car doesn’t have car insurance, you’ll need coverage before you can drive the car. You’ll also need a non-owner policy even if the car’s owner has auto insurance if their policy doesn’t extend coverage to other drivers.

Non-owner liability auto insurance only offers you liability insurance: coverage for when you cause bodily injury or property damage to someone other than your car’s owner or one of the people insured by the policy. This coverage won’t reimburse you if you need to replace or repair your car because it was stolen or destroyed, which is covered by collision and comprehensive insurance. It also won’t cover you if you or your passengers are hurt in a no-fault accident, which is covered by personal injury protection and may have to be added separately.

However, non-owner policies are not a short-term or temporary insurance policy. They have the same policy periods as traditional car insurance policies, which are typically six months or one year.

Temporary insurance for students away from home

If your child has his or her own car, it will have to be insured whenever he or she is driving it. You may want to cancel the policy when the kid goes off to school and reinstate it when he or she comes home for the holidays. However, this could cause the premium rates associated with that policy to increase significantly, offsetting any savings you might receive by canceling the policy for a period of time. That’s because having continuous coverage will lower your rates over time.

Although there is not a true short-term or temporary car insurance product to cover your kids’ car while they’re away at school, you can save money by reducing their coverage. Since they’re not driving the car, you can take off any liability insurance or personal injury protection and continuing paying only for comprehensive coverage.

The less coverage you have, the cheaper your car insurance will be. That means the car is protected from damage or loss while it’s sitting in your driveway during the semester, but be sure to add the other types of car insurance back to the policy before your student starts driving it again.

Addressing car usage with a pay-per-mile policy

If your interest in a short-term or temporary car insurance policy is because you don’t drive as much and want to save money, you should look into usage-based insurance. Usage-based auto insurance, such as pay-as-you-go and pay-per-mile insurance, assesses your premiums based on how you actually drive, instead of how people like you are statistically likely to drive. If you drive a lot less, your premiums will be much lower than someone who drives more, as long as you don’t get into more accidents.

Canceling your car insurance before the policy period ends

If you only need car insurance for a short time, you may want to cancel your car insurance policy before the policy period ends. As with canceling your kid’s car insurance policy while he or she is away at school, not having coverage for a length of time may be not only illegal if you drive the car but could also cause your rates to dramatically increase next time you purchase a policy.

However, if you do cancel your car insurance policy, you’ll receive a prorated refund for the months you paid for during the period but didn’t use.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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