What Is Temporary Car Insurance and Do I Need It?

A standard car insurance policy is great for those who use their vehicles routinely, but temporary car insurance is a better fit for infrequent drivers. True temporary car insurance policies are rare and can have gaps in their coverage, but there are other options for drivers seeking affordable, short-term auto insurance. Here's a closer look at how temporary car insurance works and what alternatives are out there.

What is temporary car insurance?

Temporary car insurance is car insurance designed for short-term use cases. While these policies exist, they're pretty rare and it's not possible to get a car insurance quote for short-term coverage with major insurers. But drivers who only need auto insurance coverage for a short time still have options.

Can I get daily, weekly, or monthly auto insurance?

It's usually not possible to buy an auto insurance policy with a term shorter than six months. There are a few companies that offer monthly auto insurance policies, but these are often smaller, lesser-known insurers. Their coverage and customer service aren't always as good as larger companies, so it's important to read the fine print and research the insurance company before purchasing one of these policies.

There are alternatives to temporary car insurance. Usually it's possible to find a better solution than purchasing a monthly policy from an unknown provider. Some of these solutions are outlined below.

When do you need temporary car insurance?

Here's a look at some common situations where a driver may want to seek temporary coverage:

College students who only drive during school breaks

It doesn't always make sense for students to pay for a year-round auto insurance policy when they only drive a few months out of the year. Some choose to cancel their policies during the months they're away at school, while others reduce their coverage during that time to save money. Some companies also offer car insurance discounts directed at students who attend school elsewhere.

Vacationers driving a rental car

Drivers usually have the option to buy rental car coverage through the rental agency. But it's important to read the fine print first to understand what is and isn't covered. Drivers may also want to check with their credit card providers, especially if they have travel rewards credit cards, to see if any of these already include rental car insurance.

People borrowing their friends' cars

Typically, a driver doesn't need to buy their own insurance to borrow a friend's car unless they do so frequently or they're considered a high-risk driver. The owner's insurance should cover the driver as long as the owner gave the driver permission to use their vehicle.

Military members who don't drive while deployed

Like college students, some military members choose to cancel their car insurance while deployed to save money. Others may look for insurance companies that offer discounts to military members who are actively deployed.

Individuals using a car sharing service

Car sharing services often provide some basic car insurance, like rental car coverage. This includes state-minimum liability coverage and protection against physical damage to the vehicle. But this basic coverage may not be enough in all situations.

Best options for temporary car insurance

Drivers interested in types of car insurance for short-term use should consider one of the following options:

Permissive use

A permissive use clause is one of the basics of car insurance and comes standard on most policies. This covers non-household members who infrequently borrow a vehicle. This means that as long as a driver has the vehicle owner's permission, they can borrow that vehicle and drive it legally without any insurance coverage of their own.

There are a few exceptions to this, though. Those who frequently borrow the vehicle may need to be added to the policy as another named insured. Some companies require all household members of legal driving age to appear on the policy.

In addition, some permissive use clauses don't cover high-risk drivers. Those with DUIs or other offenses on their record may need to explore some other options. It's always smart to double check the owner's auto insurance policy before borrowing a car to avoid surprises.

Rental car policy

When renting a car or using a car sharing service, a driver can take advantage of the insurance that's provided by the rental company. But it's still important to read the fine print before signing up. Not all policies provide the same coverage. While a bare-bones policy might be more affordable, it could leave a driver facing a huge bill if they wind up in an accident.

Look at the coverage limits and deductibles as well as the premium cost and compare this to what's available with some of the other options on this list.

Usage-based coverage

Some insurance companies offer usage-based policies that charge drivers based on how many miles they drive. These policies are usually only available in six-month increments. But they could end up being more affordable for those who drive infrequently.

These policies are more readily available with larger insurers than monthly car insurance policies, with many large insurers offering some sort of program to reward infrequent drivers.

Car storage coverage

When a car isn't being driven, some insurers enable customers to reduce their coverage levels to comprehensive-only coverage. This protects the vehicle against damages from bad weather, theft, and vandalism. But it doesn't include any liability coverage or coverage for collisions with other vehicles.

A car storage policy can save a policyholder quite a bit of money compared to a standard auto insurance policy. But the driver must remember to reinstate full coverage before taking the car out on the road again.

Non-owner car insurance

A non-owner car insurance policy is a standard car insurance policy available to those who don't own a vehicle. It only provides liability coverage and includes no coverage for damage to the vehicle the policyholder is driving.

This could be a good supplement to a rental car policy or when driving a friend's vehicle, but it may not provide adequate coverage for those who own their own vehicles.

Cons of short-term auto insurance coverage

Temporary car insurance isn't without its drawbacks. Here are a couple to be aware of:

True temporary car insurance policies are rare

It's difficult to find temporary car insurance in the United States. Drivers typically have to use one or more of the above workarounds. Those who do purchase a monthly car insurance policy need to review the policy terms carefully so they understand what is and isn't covered.

Coverage might be limited

Certain policies, like non-owner car insurance policies, only provide liability coverage and offer no protection for the vehicle itself. Similarly, rental car policies may only provide a minimal amount of coverage. It's up to the driver to decide how much car insurance they need, but these policies may not always be enough.