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UPDATED: Mar 13, 2020
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Car insurance is protection purchased for a vehicle to cover the cost of repairs if that car is damaged, or to pay for damage you cause to someone else’s property if you are responsible for an accident. Because a car insurance policy is specific to a vehicle, you need to own a car in order to purchase car insurance. The policy will be specific to the vehicle listed on the policy; in order to pay for damage caused by an accident, you must be driving the vehicle involved in the collision.
Car insurance follows the vehicle so you must be a vehicle’s owner in order to insure it. You cannot purchase car insurance for a vehicle that you do not own. If you borrow a friend’s car, your friend should provide the insurance policy; even if you have your own auto insurance, the policy will usually not transfer to a car that you drive.
Usually, car insurance policies are sold in six-month or one-year increments. After the policy period has finished, the car insurance company reviews your driving habits for the previous period and determines if your rates should be increased or decreased. Your policy then renews unless you choose not to renew it or the car insurance company drops you.
In some cases, you may be interested in buying temporary or short-term car insurance. Perhaps you will not own a vehicle for very long, or you are only renting or borrowing it. The vehicle may also be a short-term lease. In these situations, how do you buy car insurance?
Car Insurance for Rental Cars
If you’re renting a vehicle or driving a loaner from your dealership, the company will ask if you wish to take out the additional insurance. This coverage usually costs an extra few dollars a day for the duration of your rental period, and will cover damage caused to the rental and also pay for damage you may cause while driving the rental.
If you own your own vehicle, your insurance coverage will transfer to any car that you drive. If you do not carry full coverage on your own auto policy, you will need to purchase whatever coverage is missing from the rental agency or garage. Otherwise, there is no need to purchase additional insurance: Your insurance will already pay for the damage incurred in a rental car.
Temporary Car Insurance
Some car insurance companies do offer short-term temporary insurance policies. These policies are designed to last for a few weeks or months and cover things like damage to a test-driven vehicle or damage caused by a temporary driver in your household. If you go on an extended vacation, you might want to purchase insurance to cover the vehicle you drive while traveling. Short-term insurance is usually more expensive than regular insurance would be, and may not be available in all states.
Before you decide to purchase a temporary policy, be sure that you cannot obtain the same coverage in a different way. For example, it may be easier to add a driver to your existing policy than to take out additional coverage for that individual. You can also cancel a car insurance policy at any time and pay a pro-rated premium for the period that you do carry insurance. You can also change your policy coverage at any time. If you wish, you can add comprehensive coverage to your vehicle during the months it is most likely to be involved in a weather-related loss, and drop it the rest of the year; there is no reason you need to take out an additional policy if you can make the necessary changes to your existing insurance policy instead.
When you speak to your car insurance company about your options, be sure to explain your specific situation. He will be able to look over your policy and determine the best way to obtain coverage for your short-term needs. If your existing policy cannot cover your short-term needs, you may wish to obtain a temporary auto policy.
Your car insurance company may have a temporary auto policy option that can be added to your regular policy. If your insurance company doesn’t offer this option, you can search for a quote online and apply for a short-term policy. Rates will vary, but by comparison shopping for temporary car insurance policies online you can be sure to obtain the most affordable policy available.