Car insurance is a well-known concept to all of us: Almost every state within the union requires automobile insurance for drivers to legally operate a vehicle on public roads. Uninsured motorists, if caught, will probably be ticketed and fined, but more essential, in the event that they’re involved in an accident they’ll pay high repair costs, and even medical bills, and will potentially face financial disaster. So, insurance is not just a requirement, it’s a no brainer. Most car insurance policies typically cover you for a yr. But what for those who need it for a shorter period — just every week or a month? There is a lesser-known product for that, called temporary insurance.
Temporary insurance, or because it’s sometimes known, short-term insurance, is, because the name implies, coverage for much shorter periods. Most vehicle owners won’t ever need short-term or temporary insurance, but you have to be aware it’s available in case you ever do.
Here are a couple of instances where it might be useful:
When do you would like temporary insurance?
Let’s say you are switching insurance providers and there is a time gap between policies. Maybe you’ve a member of the family who only needs insurance after they’re home from school, or perhaps you are selling your car and wish to make sure test drivers are covered. These are all common scenarios that may benefit from temporary insurance, but in some cases, your existing insurance policy may cover additional drivers or offer similar solutions. Check together with your insurance agent.
Some drivers may consider temporary insurance for a car rental. While your personal car insurance policy will often cover a rental car, there are instances where it won’t, similar to driving in Mexico or another foreign country. In that case, you will need and want to buy insurance on the rental. That’s probably the most probably temporary insurance situation you will experience.
How much does temporary car insurance cost?
In general, short-term policies cost greater than standard coverage, because you’re paying for the convenience and it’s tougher for insurers to show a profit on temporary insurance. The price is just as sensitive to aspects similar to your driving record, the form of vehicle, where you are operating the car and even your credit rating. If you are considering of supplementing insurance for an exotic rental on Turo, the short-term quotes could make your head spin.
To compound matters, most large insurers don’t offer temporary insurance policies because the risks don’t outweigh profits. That means you will likely have to search out coverage from a smaller and fewer reputable provider, which evokes serious “buyer beware” anxiety. Pay close attention to what the policy actually covers and what may be hiding within the superb print. Diligence up front pays huge dividends for those who indeed must file a claim.
If the red flags are already waving in your head, that is a sound response. If you’ve got ever needed to battle with an insurance claim held by an enormous provider, imagine coping with a much smaller outfit with narrower profit margins. The concept that a “mom and pop” company will probably be easier to cope with than a company conglomerate is quaint and almost actually naive.
Major insurers like Allstate, Progressive and State Farm don’t offer any policies that they might call “temporary car insurance.” But big insurance firms do offer some alternatives to traditional long-term policies. For instance, Allstate offers a pay-as-you-go option that might cut costs for buyers who won’t be driving a lot of miles.
How long can you utilize temporary insurance for?
As you could have found out by now, big name-brand auto insurance firms don’t offer policies for lower than six-month or full-year periods. According to Allstate, “Your best option may be to purchase a standard auto policy and then talk to your provider about options to suspend coverage while it’s in storage or parked.” Progressive says, “You can purchase a six-month policy and cancel it after a couple of months if you sell your car or when you’re done driving.” And that leads us to our next point.
Check your current car insurance policy first
So what’s a customer to do? If you’ve an existing policy, check to see what coverage may already be baked in. There’s a very good likelihood that guest drivers are covered, though restrictions almost all the time apply. Also, check to see what options can be found so as to add to your policy. It’s likely your insurer has an answer and it might even be cheaper than a short-termer. Factor in the convenience of augmenting your policy versus making a recent one, together with the peace of mind that your coverage is valid, and this route is much more attractive.
A less common solution includes opening a typical long-term policy and canceling it while you not need it. It’s completely legal, though there could also be some penalties for early termination. One insurer specifically (*cough* State Farm *cough*) doesn’t charge a cancellation fee. Keep in mind that for those who’re not paying insurance month-to-month, you could have to work to get the rest of your policy refunded. We would not be surprised if coverage is denied if cancelations are an everyday occurrence, too.
In the tip, short-term insurance ought to be regarded as a final resort. The cost and potential headaches are probably not value it for many drivers, especially when more reputable alternatives might be at your disposal. As with almost anything automotive, do your personal research before signing anything.
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Credit : www.autoblog.com
