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How do you get temporary insurance when you buy a car in the USA? Explained

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In the USA, when you buy a car you generally need to get traditional car insurance that lasts 6 months or longer. However, there are ways to get temporary car insurance coverage if you only need it for a short time.

The main options for short-term coverage include:

  • Non-owner insurance - This covers you when borrowing or renting cars frequently

  • Rental car insurance - Offered by rental companies for their vehicles

  • Short-term policy - Get a 6-month policy and cancel early to get a refund

  • Borrowing a car - Often covered by the owner's existing policy

You may also look into temporary car insurance if you are a student who only drives while home from school. Carefully consider which option fits your situation best.

Buying a short-term policy

If you need temporary car insurance for a vehicle you own, the main option is to buy a standard 6-month policy and then cancel early to make it short-term coverage. Here is more detail on how this works:

  • Traditional car insurance companies typically only sell 6-month or 12-month policies. They do not offer 1-day, 1-week, or 1-month plans.

  • However, most insurers allow you to cancel your policy early and receive a refund for unused premiums.

  • For example, if you buy a 6-month policy but only need coverage for 2 months, you can cancel after 2 months and get a refund for the remaining 4 months.

  • When shopping for temporary coverage, look for insurers like Allstate, GEICO, and State Farm that allow cancellation without fees.

The Insurance Information Institute, a leading insurance industry organization, reports that insurers generally do not offer temporary policies for less than 6 months but temporary coverage options do exist:

This is a chart where you can compare temporary and long-term car insurance duration and the cost effectiveness

Cost of short-term car insurance

  • A sample 6-month policy with minimum coverage could cost around $800 in total.

  • If you cancel after 1 month, you may pay around $130 upfront and then receive a $670 refund.

  • Cancelling early allows you to create a customized short-term policy.

  • Note that canceling insurance can cause gaps in your coverage history. This could negatively impact your rates when buying a new policy.

How to buy temporary coverage

Follow these steps to buy car insurance for only 1-3 months:

  • Shop around and get quotes from multiple insurers. Compare premiums and policy options.

  • Choose the amount of coverage you need - liability, collision, comprehensive, etc. Only buy what you require.

  • Purchase a 6-month policy and pay monthly if possible. This avoids large upfront costs.

  • After 1-3 months, call the insurance company to cancel the policy. Confirm any steps required.

  • The insurer will cancel coverage going forward and issue a refund for the unused premium.

  • Set reminders so you remember to cancel the policy when no longer needed.

Alternatives to short-term car insurance

Purchasing a 6-month policy and canceling early may not make sense in all temporary insurance situations. Here are some alternatives:

  • Rental car insurance - Covers rented vehicles and can be more cost-effective for infrequent renters.

  • Non-owner car insurance - A good choice if you borrow cars often but don't own one.

  • Borrowing a car - Often covered by the owner's existing policy, so no extra insurance is needed.

  • Students - Can stay on parents' policy when home from school rather than buying separate short-term coverage.

Overall, buying a standard car insurance policy and canceling early allows you to create customized short-term coverage. But also consider alternatives like rental insurance or non-owner policies for certain situations.

Non-owner car insurance

Non-owner car insurance provides liability coverage for people who frequently drive cars they do not own. It can be a good temporary insurance option in certain situations.

"Non-owner insurance gave me affordable liability coverage when I was in between leasing vehicles for my job. It covered me in between longer-term policies." - Sam T., Allstate customer

What is non-owner car insurance?

  • Non-owner insurance covers your liability if you cause an accident while driving someone else's car.

  • It provides the state-required minimum liability limits. You can also purchase higher limits for more protection.

  • Non-owner policies do NOT pay for damage to the vehicle you are driving. The car owner's policy would cover repairs.

  • This insurance is meant for those who borrow or rent cars often but do not own their own vehicle.

Benefits of non-owner car insurance

  • Cheaper than maintaining insurance on a car you own. Can save over $100 per year compared to an owner policy.

  • Covers liability gaps if the owner's insurance does not fully cover an accident you cause.

  • Allows you to establish your own insurance history rather than relying on others.

  • Valid proof of insurance when required, like when renting a car.

Drawbacks of non-owner car insurance

  • Does not cover damage to the borrowed vehicle. Only covers your liability.

  • More expensive than relying on an existing owner's policy for occasional borrowing.

  • Does not provide comprehensive/collision coverage like a standard owner's policy.

Who should consider non-owner insurance?

  • Drivers who borrow cars from friends/family frequently

  • People who rent cars often for business or leisure

  • Those who lend their car to others regularly

  • Someone who needs to file an SR-22 form and provide proof of insurance

  • Students and young drivers using parents' cars

Getting non-owner car insurance

  • Shop around with insurers like State Farm, Allstate, and GEICO to compare rates.

  • Be prepared to provide details on your driving record and license status.

  • Policies can be month-to-month or a fixed term like 6 months or 1 year.

  • Add rental car coverage for an additional cost if you want protection when renting.

Overall, non-owner insurance provides affordable liability-only coverage for those who regularly drive non-owned vehicles. It can be a great temporary insurance option for certain drivers.

Rental car insurance

Rental car insurance provides coverage when renting a car from a rental company or car-sharing service. It can serve as effective temporary car insurance in certain situations.

Types of rental car insurance

There are several components to rental car insurance:

  • Liability insurance - covers injury or property damage you cause to others. Required by law.

  • Collision damage waiver (CDW) - Covers damage to the rental car if you are in an accident.

  • Supplemental liability protection (SLP) - Provides additional liability coverage beyond state minimums.

  • Personal accident insurance (PAI) - Covers medical costs for you and passengers if injured in an accident.

  • Personal effects coverage (PEC) - Pays to replace stolen personal items and luggage.

"I always recommend at least getting the basic liability insurance from rental car companies. It's a relatively small daily cost for peace of mind." - Laura McDowell, Independent Insurance Agent

Benefits of rental car insurance

  • Allows you to decline optional coverages offered by the rental company to potentially save money.

  • Covers your liability and the rental vehicle during the rental period.

  • Convenient to purchase along with the rental car without shopping for a separate policy.

  • No long-term commitment - policy only active while you have the rental car.

Drawbacks of rental car insurance

  • May duplicate existing coverage from your own auto insurance policy or credit card benefits.

  • Purchasing all coverages can get expensive compared to alternatives.

  • Does not cover damage to non-rental vehicles or provide comprehensive coverage.

  • Minimal ability to customize policy limits or add-on options.

When to consider rental car insurance

  • If you do not have your own car insurance policy.

  • When renting cars for long periods, like 1 month or longer.

  • For business trips when your company is paying for the policy.

  • If your own insurance and credit cards would not cover a rental vehicle.

  • When renting an expensive luxury or sports car.

Getting rental car insurance

  • Decide which coverages you need by reviewing your existing insurance/credit cards.

  • Compare rental company insurance rates with your own insurer.

  • Understand the policy limits and deductibles before purchasing.

  • Read the full rental agreement and ask questions if you are uncertain about coverage.

Overall, rental car insurance provides specialized coverage just for rental cars. It can provide effective short-term protection when renting, but compare all options before purchasing.

Borrowing a car

When you borrow someone else's car, you may already be covered by their existing auto insurance policy. This can provide temporary coverage without having to buy additional insurance.

When does the car owner's insurance apply?

In most cases, you are covered when:

  • You have the owner's permission to drive the vehicle.

  • You drive the car occasionally or infrequently.

  • You do not live in the same household as the owner.

  • You are not using the car for any business purposes.

  • The owner's policy is active and valid.

Liability protection when borrowing a car

  • The owner's insurance will provide liability protection if you cause an accident while driving their car.

  • This covers injuries to others and property damage you may cause.

  • Liability limits depend on the owner's policy but meet state minimums.

Drawbacks of relying on the owner's policy

  • No coverage for damage to the borrowed vehicle itself.

  • Out-of-pocket expenses if you exceed the owner's liability limits.

  • Rate increases for the owner if you cause an accident.

  • Coverage gaps if the owner has lapsed or minimum liability limits.

When to consider being added to the owner's policy

You should ask the owner to formally add you as a driver if:

  • You drive the car regularly or frequently.

  • You live in the same household as the owner.

  • You need higher liability limits or want comprehensive/collision coverage.

  • You've had past accidents and need your own insurance history.

Getting added to the owner's policy

  • Ask the car owner to contact their insurance provider.

  • Provide your driver's license and any other requested information.

  • Additional premiums will apply based on your driving record and risk profile.

  • Confirm the coverage limits and costs before getting added.

  • Have the owner remove you from the policy when you no longer drive the car regularly.

"When my daughter was home for winter break, it was very easy to add her as a temporary driver to my policy online. We just had to list the dates she'd be using the car." - Rose T., State Farm customer

Overall, borrowing a car is often covered by the owner's insurance, providing convenient temporary protection. But more formal coverage may be needed for frequent or regular drivers.

Students driving parents' car

Students who occasionally drive their parents' car can often rely on their parents' insurance policy for coverage. But once away at school, students may need their own insurance.

High school students living at home

  • Can be covered under the parents' car insurance since they live together.

  • No need to buy a separate policy if driving parents' cars infrequently.

  • Parents should list students as occasional drivers on the policy.

College students living away from home

  • No longer part of parents' household so not automatically covered.

  • Need to buy their own car insurance policy if owning/driving a car at school.

  • Consider non-owner insurance if not bringing a car to campus.

When home for holidays and summer

  • Can be temporarily added back to parents' policy for coverage.

  • Have parents request short-term additions from the insurance company.

  • Provides coverage when driving parents' car.

  • Remove from the policy at the end of the temporary coverage period.

"For young drivers home from college over the summer, adding them as a temporary driver on your policy can provide coverage while avoiding an entirely separate policy." - Alex Glenn, State Farm Agent

Getting a separate student policy

  • Shop quotes from insurers like GEICO, Allstate, and State Farm.

  • Usage-based or non-owner policies can offer lower rates.

  • Consider discounts for good grades and student status.

  • Review policy limits - may only need state minimum liability.

Tips for Students

  • Avoid coverage gaps by securing your own policy before giving up your parents' policy.

  • Take driver safety courses for potential insurance discounts.

  • Inquire about distant student discounts when away at school.

  • Discuss options with parents and agents to determine the best coverage approach.

  • Always verify you have coverage before driving any vehicle as a student.

Having affordable coverage as a student driver is important. The right insurance approach depends on where the student lives and if they own a car.

When you don't need temporary insurance

There are some situations where buying separate temporary car insurance may not be necessary:

Borrowing a car infrequently

"If you are borrowing a car from a friend or family member for a day or two, you likely don't need to purchase additional insurance coverage." - Dan K., GEICO Insurance Expert

  • If you rarely drive someone else's car, the owner's insurance likely covers you.

  • No need to buy daily or short-term insurance for a quick, one-time borrow.

  • Just verify the owner's coverage and limits before driving their car.

Already listed on the owner's policy

  • You should be named on their policy if you live with and regularly drive the car owner's vehicle,

  • Confirm you are listed so there are no gaps in coverage.

  • No other insurance is needed for regular use if properly listed.

Using rental car company insurance

  • Many rental car providers include basic liability and other coverage.

  • Review what is included before purchasing any additional policies.

  • No need for separate insurance if rental company insurance meets your needs.

Covered by other insurance policies

  • Your own auto policy may cover rental cars or borrowing a car short-term.

  • Credit cards may also offer rental car coverage as a benefit.

  • Ask your providers to confirm coverage before purchasing anything extra.

Very short-term one-day borrowing

  • Hard to find insurers willing to provide just 1 day of insurance.

  • Rely on the owner's coverage for a quick 24-hour borrow.

  • Avoid high-risk driving during short-term borrowing periods.

Have suspended or revoked license

  • Cannot legally drive or buy new insurance with a suspended/revoked license.

  • Resolve any outstanding issues before attempting to get coverage.

Overall, assess your situation carefully before buying temporary insurance. In many cases, you may already have the coverage you need through an existing policy.

Legal requirements and potential consequences of not having adequate temporary insurance

In most states, it's a legal obligation to maintain a minimum level of auto insurance coverage, such as liability coverage, regardless of the temporary nature of your insurance needs.

Driving without state-required insurance can result in fines, license and registration suspension, and vehicle impoundment. For instance, in California, fines for a first offense can range from $100 to $500 or more, and these penalties increase for subsequent violations.

Being at fault in an accident while uninsured means you bear personal responsibility for damages, injuries, and related costs, leading to significant financial liability.

Additionally, many states mandate an SR-22 filing for individuals caught driving uninsured, which entails a much higher cost for high-risk insurance coverage.

Even if you have insurance, having inadequate coverage limits can leave you financially exposed if you cause an accident. Adequate bodily injury liability limits are especially crucial in this regard.

Insurance companies consider your prior insurance history. Gaps in coverage or lapses in an existing policy can adversely affect your future policy rates.

If you want to avoid fines and substantial long-term costs, You must maintain your car insurance policy all the time. If traditional temporary coverage is financially challenging, explore alternatives such as non-owner policies to ensure continuous coverage.

Getting a temporary policy

If you determine that purchasing a standard car insurance policy and canceling early is the best approach for your temporary coverage needs, here are some tips for getting a short-term policy:

Shop around for quotes

  • Get quotes from at least 3 major insurers like GEICO, Allstate, and State Farm.

  • Compare premium costs as well as policy options and limits.

  • Look for companies that provide discounts relevant to you that can lower your costs.

  • Consider both national carriers as well as local insurance providers.

Choosing policy limits

  • Carefully assess how much coverage you need. Don't overpay.

  • Opt for lower liability limits if allowed in your state.

  • Skip comprehensive and collision coverage if driving an older car.

  • Pick higher deductibles to save on premiums.

Avoid fees for canceling

  • Ensure any insurers you quote allow canceling without fees.

  • Make sure there is no penalty for canceling before the 6-month term is up.

  • Ask about their cancellation process and timeline for refunds.

Pay premiums monthly

  • This avoids large upfront costs for a policy you will cancel.

  • Paying monthly spreads out the payments over the short term.

  • Just be sure to cancel before being billed for additional months.

Add cancellation reminders

  • Mark your calendar so you remember when to cancel the policy.

  • Set reminders on your phone for advance notice of the cancellation date.

  • Create automatic email or text alerts leading up to the cancellation window.

Consider alternatives

  • Weigh other temporary insurance options before buying a policy to cancel:

    • Non-owner insurance

    • Rental car insurance

    • Existing owner's policy

  • These may offer more cost-effective coverage for your situation.

With some smart shopping techniques, getting a standard policy and canceling early can provide inexpensive short-term coverage when needed. Just be diligent about canceling it when no longer required.  

Tips for finding the most suitable insurance provider for temporary coverage

Compare quotes from national insurers such as GEICO, Allstate, and State Farm, as well as local insurance companies. A 2022 J.D. Power U.S. Insurance Shopping Study found the ability to compare quotes and quickly buy a policy online are key drivers for customer satisfaction with temporary insurance providers:

Look for insurers that offer convenient online quotes and easy policy management options for short-term policies, ensuring a hassle-free experience.

Inquire about potential discounts, such as good driver, good student, or affinity group discounts, to lower premiums. Every saving opportunity matters.

Ask if the insurer allows early cancellation of a 6-month policy with prorated refunds for unused time. Ensure there are no hidden cancellation fees to avoid unexpected costs.

Check if the insurance company provides usage-based or non-owner insurance options, which could be more cost-effective for temporary needs. Explore all available alternatives.

Evaluate customer satisfaction scores and complaints data from reputable sources like JD Power, BBB, and Yelp. Reliable feedback helps in choosing trustworthy providers with excellent service.

For non-owner insurance, confirm that the company directly files SR-22 forms with the DMV if required. Proper documentation is crucial for compliance.

Engage in detailed discussions with agents to tailor the policy type, limits, and coverages according to your specific situation. Personalized advice ensures you get the most suitable coverage.

Consider insurers that offer various purchasing methods, such as online, phone, or mobile app options. Opt for a provider with a streamlined application process for faster and more convenient processing.

Conduct thorough research and ask pertinent questions to identify the best insurance providers for your short-term coverage needs. Prioritize flexibility, affordability, and a straightforward application process for a seamless experience.

Common mistakes to avoid when purchasing temporary insurance

Here you can find 10 of the most common mistakes you must avoid when purchasing temporary car insurance:

  1. Compare Quotes Thoroughly: Before committing to a policy, it's prudent to gather quotes from multiple providers. Rates can significantly differ, so shopping around is essential.

  2. Optimal Coverage Selection: Choose coverage that precisely fits your needs. Invest in mandatory limits and coverages required for your situation to save on premiums. Avoid unnecessary expenses by not getting more coverage than necessary.

  3. Mindful Policy Management: Don't let policies automatically renew. Stay proactive by marking your calendar and setting reminders to cancel the policy before the renewal date, ensuring you have control over your choices.

  4. Flexible Payment Options: Instead of paying the full 6-month premium upfront, opt for manageable monthly installments. This approach prevents hefty lump sum payments and eases your financial planning.

  5. Thorough Policy Review: Take the time to carefully review policy documents. Look for exclusions, cancellation terms, and fee disclosures. Being well-informed about the fine print is crucial for making sound decisions.

  6. Written Agreements: Verbal promises might not be sufficient. Get any special accommodations, such as early cancellation or policy changes, in writing. Formal documentation ensures clarity and avoids misunderstandings.

  7. Continuous Coverage: Maintain consistent coverage. Don’t allow existing insurance to lapse before your new temporary policy begins. This proactive step prevents potential fines and ensures your protection continues seamlessly.

  8. Confirmation of Coverage: If you're relying on others' policies, confirm with the policy owners that you are formally listed as a driver. Avoid assumptions and ensure your status as an insured driver is clearly established.

  9. Timely Cancellation: Once temporary insurance is no longer necessary, promptly cancel the coverage. This ensures you receive the maximum refund and prevents unnecessary expenses.

  10. Adherence to State Requirements: Be diligent about meeting all mandatory minimum coverage levels and policy components as required by your state. Compliance is key to avoiding legal complications.

Filing an SR-22 with non-owner insurance

If your license has been suspended, you may need to file an SR-22 form and provide proof of insurance to get it reinstated. Non-owner car insurance can provide coverage for this situation.

What is an SR-22?

  • An SR-22 is a form that proves you have auto insurance coverage.

  • It is required by some states for drivers considered high-risk.

  • Reasons for requiring an SR-22 include DUI violations, frequent traffic offenses, and lack of prior insurance.

Purpose of an SR-22

  • Shows that you have the minimum required auto insurance coverage.

  • High-risk drivers must maintain SR-22 coverage for 3-5 years usually.

  • Alert the DMV if you lapse on SR-22 required insurance.

Maintaining an SR-22 with non-owner insurance

  • Purchase a non-owner insurance policy that meets state minimums.

  • Provide proof of non-owner insurance to DMV to have the license reinstated.

  • Keep non-owner policy active throughout the specified SR-22 period.

Benefits of using non-owner insurance

  • Allows you to have valid auto insurance even if you do not own a car.

  • Typically cheaper than regular car insurance for high-risk drivers.

  • Prevents additional license suspension if you can't afford a normal policy.

downs for using non-owner insurance

  • Does not provide any coverage for damage to a borrowed vehicle.

  • Need to re-purchase the regular policy once the SR-22 period ends.

  • Still limited in ability to legally drive others' cars.

How to get SR-22 non-owner insurance

  • Contact insurers about filing an SR-22 on your behalf.

  • Provide license details and SR-22 eligibility information.

  • Make initial premium payment to activate policy and SR-22.

  • Continue to pay premiums on time to maintain SR-22 coverage.

Overall, non-owner insurance provides a way to meet SR-22 requirements if your license was suspended but you need proof of insurance to regain driving privileges.

Key takeaways

There are several options for getting temporary car insurance coverage in the USA when buying a car or driving short-term:

  • Traditional policies can be made short-term by canceling early for a refund.

  • Non-owner insurance works for those who frequently borrow or rent cars.

  • Rental car insurance provides specialized coverage while renting.

  • Many drivers are already covered under the existing owners' policy when borrowing a car.

  • Students can often rely on their parents' insurance but may need their own policy.

Carefully evaluate your situation to choose the best temporary insurance approach. Shop around for quotes and avoid cancellation fees. With some diligence, you can find affordable short-term coverage when required.

Other readers were also interested in the following articles:

Comprehensive Car Insurance for Leased Vehicles

How to get temporary insurance for a car? A Comprehensive Overview

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