Who offers short term auto insurance? – Councilor Forbes
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Car owners traditionally buy auto insurance policies with a term of six or 12 months. But in some cases, you might be looking for a short term policy.
Industry-backed Insurance Information Institute spokesperson Mark Friedlander says drivers typically buy short-term auto insurance policies that cover 30 days or less when they don’t need coverage only for a limited time.
Just like with traditional auto insurance, the price of short-term coverage varies depending on the options you choose and the type of policy you purchase, according to Friedlander. You can choose liability-only coverage, he says, or choose more extensive coverage that includes collision insurance and comprehensive insurance.
Why would you buy short term auto insurance?
Trusted Choice, a network of independent insurance agents, says car owners can purchase short-term auto insurance for reasons such as:
- You are in the process of switching from one insurer’s long-term coverage to another and you have already abandoned your previous coverage.
- You temporarily lend your car to a relative, friend, or other person who will be excluded from your regular auto insurance policy. Short-term coverage applies to your vehicle when it is driven by a relative, friend or other person.
- You sell your car and must cover the vehicle when it is driven by potential buyers who will not be covered by your regular policy.
Before you decide to look for a short-term auto insurance policy, talk to your auto insurance agent to make sure your regular auto insurance policy won’t cover your situation.
Trusted Choice points out that if you had to file a claim under a short term auto insurance policy, it wouldn’t jeopardize any claims free discount you might have on a long term policy.
Friedlander notes that a typical short-term auto insurance policy lasts for 30 days, even if you only need the coverage for a day or a week. As with traditional policies, the pricing of short-term coverage depends on factors such as:
- Vehicle type
- Intended use of the vehicle
- Your automobile insurance history
- Vehicle model
- Your credit-based insurance score (States that limit the use of credit in setting auto insurance rates are California, Hawaii, Michigan, and Massachusetts)
Who sells short term auto insurance?
Short term auto insurance is not widely available. While auto insurance companies typically do not advertise month-long insurance policies on their websites, Forbes Advisor found that these companies had made deposits with state insurance services to provide one-month auto insurance policies:
- American Hallmark Insurance Co. of Texas (1 month auto insurance policies available only as renewal policies)
- Direct General Insurance Co.
- First Acceptance Insurance Co.
- National Unity Insurance Co.
- Old American County Mutual Fire Insurance Co.
- Young America Insurance Co.
Why Auto Insurance Companies Don’t Like Short-Term Policies
Friedlander says most state and regional insurance companies don’t offer short-term auto insurance policies. Why? For insurers, the risk of offering short-term coverage outweighs the benefits of selling that type of coverage, he says. That’s why insurers normally sell auto insurance policies with a term of six or 12 months, he says.
Other ways to get short-term auto insurance
So what if you are unable to purchase a 30 day auto insurance policy? The alternatives include:
- Automobile insurance for non-owners. If you don’t own a car but need coverage, non-owner auto insurance may be an option. This coverage can be a good choice if you frequently rent cars so that you don’t have to purchase liability insurance from a car rental company. Or it could fill the insurance gap when you’re between two vehicles.
- Cancellation of a standard auto insurance policy. You can purchase a standard auto insurance policy and cancel it once you no longer need the coverage. Remember, however, that the insurer may charge a fee if you cancel the policy before it expires. Also, keep in mind that you may need to line up other coverage for your vehicle if you cancel an auto insurance policy.