Short-Term Car Insurance-When Do You Need Such an Insurance Policy?

Generally, the majority of drivers and vehicle owners buy a standard car insurance policy. Such policies usually continue for a period of six months or even a year. However, some instances might require insurance coverage for a rather short period of time. A Short-Term Car Insurance Policy is the way to go for such instances where a standard long-term insurance policy might not be an appropriate solution.

Short-Term Car Insurance Policy

A standard vehicle insurance policy remains effective for at least a period of 6 months. But any insurance policy that is effective for a period less than 6 months can be categorized under Short-Term Car Insurance. However the maximum duration of such insurance policy lasts only up to a month usually.

Drivers and vehicle owners normally opt for a Short-Term Car Insurance Policy that is offering coverage for up to 30 days which suffice their need of insurance coverage for a limited duration. It allows them the flexibility to renew or extend the insurance coverage for an intermediary duration between two standard car insurance policies.

Although not many of the mainstream car insurance providers in the USA usually offer insurance coverage under Short-Term Car Insurance Policy. Therefore such Short-Term Car Insurance Policy is offered only by smaller insurance providers.

Thus someone looking for a Short-Term Car Insurance Policy should verify the background of such smaller insurance provider before purchasing such a policy to avoid any complications while making insurance claims, if needed.

When to buy a Short-Term Car Insurance?

Drivers or car owners may be required to purchase a Short-Term Car Insurance Policy due to some of the following reasons:

• During the switching of longtime insurance coverage from one insurance provider to another while the previous coverage has been dropped already.
• While lending the car to a friend, relative or anybody temporarily and such individual hasn’t been included in the standard vehicular insurance policy.
• While the car is up for sale and requires insurance coverage only when any potential buyers who isn’t covered under the standard insurance policy is driving the vehicle.

It is important to note here that the standard car insurance policy can also reconfigured for some of these aforementioned needs to cover recurring instances and there won’t be a need to search for any Short-Term Car Insurance coverage. But a short-term coverage can be catered to fulfil only the temporary need of vehicular insurance coverage during the vehicle is driven by said friend, relative or anybody else.

The article is now going to elaborate on some instances wherein the need for Short-Term Car Insurance coverage might surface:

Temporary Coverage required by Student Drivers

When the child is living away at high school or college they might need a car for such duration, this might be covered under a Short-Term Car Insurance policy in compliance of the requirements of the state laws they are residing in.

Temporary usage by someone not covered in Standard Car Insurance Policy

If any person who is going to drive the vehicle temporarily but on a recurring basis then, instead of adding such person to the standard policy, a Short-Term Car Insurance policy can be opted for. Some of persons for whom Short-Term Car Insurance might seem useful include:

• Visiting relative or friend;
• A colleague or official personnel frequently using the vehicle;
• A learner driver in the family;
• A friend or relative taking the vehicle for short duration only;
• A temporary babysitter who might use the vehicle.

Car Insurance coverage for Rental Cars

Any car that is up for renting services might require car insurance coverage for long or short tours wherein frequent driver changes may requires a Short-Term Car Insurance policy. In many of these instances, the owner or rental service provider might not offer commercial insurance to all vehicles in their fleet then the driver likely may need to purchase a Short-Term Car Insurance.

The driver renting a car can also avail the rental car insurance that is offered by the rental agency itself. Such a Short-Term Car Insurance can be an arrangement offering Liability Insurance or Loss Damage Waiver covering any damage to the said rental car in the eventuality of being in a vehicular collision.

Car Insurance for Extra-territorial Visits

If any vehicle is to be taken beyond the national or state territories then such vehicle owner or driver may require purchasing some type of Short-Term Car Insurance in the state or country they are planning to visit. There are insurance providers that offer such specialized insurance plans for travelers only. This Short-Term Car Insurance allows the travelers to satisfy the minimum insurance coverage requirements of the destination state or country while driving on the public roads.

While putting a vehicle in Storage

A car or any vehicle which is to be placed in a storage facility may not need to maintain a standard insurance coverage as the said vehicle won’t be driven in the public roads anymore. But in some U.S. state it is legally mandatory to have an insurance coverage despite the state of the car, i.e. whether it is driven or not, otherwise the said vehicle owner may be required to turn in the registration plates due to cancellation of the registration of the said vehicle. In such instances, the vehicle owner may opt for a Short-Term Car Insurance while the said car or vehicle is kept in storage.

Other Scenarios requiring a Short-Term Car Insurance

There can be some more scenarios wherein a Short-Term Car Insurance may be required, such as the follows:

• While taking the driving test.
• Test driving a new car for purchase.
• Any person who have started working as a driver for taxi services such as rideshare.

Drawbacks of Short-Term Car Insurance

Primarily, the short-term car insurance has certain drawbacks:

• Lack of wide-scale availability;
• It is quite challenging to verify the background of such small insurance providers;
• The costs levied for such car insurance might get very expensive due to lack of competition.

Other drawbacks may include:

• Losing the down payment for early cancellation of the said policy;
• Contrary to the belief these policies don’t offer immediate insurance coverage as it also requires same formalities as standard insurance policy. For instance, Comprehensive and Collision Coverage may be revoked if the photo inspection is not conducted of the respective vehicle;
• Such policies not satisfy minimum insurance coverage requirements of every U.S. state;
• The short duration applicability may result in gaps in the insurance coverage which may subject to penalties;
• No coverage if the vehicle crashes after the completion of duration under such policies.