Short Term Auto Insurance Policy
Auto insurance is an essential part of responsible driving. Most states make it a crime to drive on public roads without adequate insurance coverage. If you're involved in an accident, your lack of insurance can mean a huge financial cost to you, especially if someone suffers injuries and needs medical attention. Short-term auto insurance policies allow you to get coverage even when you don't need insurance for an extended period of time.
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Terms
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Short-term auto insurance policies, also known as temporary auto insurance, feature many of the same coverage options as conventional, long-term auto policies. They always provide liability coverage, which pays for damage that you cause in an accident, be it to your own vehicle, someone else's property or bodily damage to another person. Some temporary auto policies also offer comprehensive coverage, which pays for damage your vehicle sustains due to weather, fire, vandalism or theft.
Rates
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Short-term auto insurance policies generally cost more than regular insurance policies on a daily or monthly basis. Most charge by the day and offer up to 30 days of continuous coverage. The reason that short-term insurance rates are higher is that insurance companies seldom investigate a driver's accident record prior to offering a quote. When you buy a long-term policy, the insurer looks at your driving record to determine your level of risk based on past behavior. Temporary insurance uses a simpler method for determining rates and may not reward you for an accident-free record.
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When to Buy
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There are several instances in which short-term auto insurance is a useful purchase. If you plan to drive in a foreign country where your car insurance won't apply, you'll need temporary coverage from an insurer in the country you visit. Another time to buy short-term insurance is if you borrow a friend's car for an extended period of time. While your friend's car insurance might cover you, any accidents you cause will raise her rates; getting your own policy will ensure that you don't affect your friend's policy even if you need to make a claim. Finally, if you buy a new vehicle and plan to drive it off the lot you'll need short-term insurance until you can secure a long-term policy.
Sources
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Most major insurance companies offer some form of short-term insurance. As with any type of insurance, rates vary from one company to another so it's best to shop around. New car dealerships may work with one or more insurers to offer short-term policies that allow you to meet the state requirements to take possession of a new vehicle. Rental agencies also sell short-term insurance for rental cars. These are useful if you want to protect your rates on your long-term auto policy, or if you don't own a car but the rental agency requires some form of coverage.
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