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Car insurance is something that is necessary for the vast majority of Americans. When you own a car, the expectation is that you are going to purchase an insurance policy to protect you and your passengers while the car is in motion.
Car insurance is a product that is truly on-demand; a car insurance policy can be purchased online without ever even having to talk to an insurance representative.
This means it’s easy to shop around for what you need! You can find the best deals on auto insurance by using our free comparison tool.
What do you do, though, if you do not need car insurance for the typical policy terms that are offered?
What are the standard insurance policy term lengths?
Most of the car insurance providers in the marketplace offer one of the two standard policy terms. These include a six-month policy and an annual policy. When you need to get something that is outside of those two options, things can get tricky.
There might be instances when you don’t want car insurance coverage for a long period of time. In some cases, you may just need to be covered for a month, a week, or a day. This type of insurance is called temporary or short-term car insurance.
Of course, there are some downsides to having temporary auto insurance coverage.
The main downside to temporary insurance coverage is that each month’s payment is likely to be higher than it would be if you had purchased an annual plan.
The full dollar amount for an annual plan is always going to be bigger than a temporary payment, so you have to decide which is more affordable for you. The shorter the term, the more expensive each payment is going to be.
If you need temporary auto insurance coverage, many prominent companies offer it alongside their standard insurance policies.
Short-term Versus Long-term Insurance
It’s wise to keep in mind that, while temporary insurance is a great solution for short-term needs, it is not a long-term policy.
If you find yourself or someone on your policy in one of these situations, you may want to consider changing from a temporary to a permanent policy:
- A student driver gets their own car and needs to have that car fully covered with all of the state minimums for the new car.
- You start driving your classic car more often than you originally thought you would.
- Your driving status changes or you add more people or cars to your policy.
- Younger drivers get older and require more coverage than they previously did.
- Someone on the temporary insurance has an accident that increases the premiums on the short-term insurance.
In any of the above cases, you may want to consider shopping around for other insurance options to make sure you get the best deal on long-term insurance.
It often helps to compare policies side-by-side so that you can see which options are really needed and which are not.
You should consider all coverage options when shopping for car insurance so that you can get the most for your money when you switch from temporary to long-term insurance plans.
Last, consider that your standard six-month or annual policy will probably offer more robust discounts than a short-term policy. Here are some we have collected:
|Vehicle Discounts||Driver/Customer Discounts||Personal Discounts|
|Active Disabling Device||Claim Free||Emergency Deployment|
|Adaptive Cruise Control||Continuous Coverage||Family Legacy|
|Adaptive Headlights||Defensive Driver||Family Plan|
|Anti-lock Brakes||Driver's Education||Federal Employee|
|Audible Alarm||Driving Device/App||Further Education|
|Automatic Braking||Early Signing||Good Student|
|Blind Spot Warning||Full Payment||Homeowner|
|Daytime Running Lights||Good Credit||Life Insurance|
|Electronic Stability Control||Multiple Policies||Membership/Group|
|Farm/Ranch Vehicle||Multiple Vehicles||Military|
|Forward Collision Warning||New Customer/New Plan||New Address|
|Garaging/Storing||Occasional Operator||New Graduate|
|Green/Hyrbid Vehicle||Online Shopper||Non-smoker/Non-drinker|
|Lane Departure Warning||On-time Payments||Occupation|
|Newer Vehicle||Paperless/Auto Billing||Recent Retirees|
|Passive Restraint||Paperless Documents||Stable Residence|
|Utility Vehicle||Roadside Assistance||Student Away|
|Vehicle Recovery||Safe Driver||Student or Alumni|
|VIN Etching||Seat Belt Use||Volunteer|
That doesn’t mean there isn’t a place for short-term insurance.
In cases of young or student drivers, classic car owners who want to cover their car for a short time, or for anyone who does not currently own their own car, temporary or short-term insurance offers a viable short-term alternative to car insurance coverage.
But if you own a car that you drive frequently, it’s best to stick to one of the long-term plans.
Plus you want to avoid any lapse in coverage. More on that below…
Niche Insurance Companies Service the Short-term Market
From an underwriting standpoint, it is very different writing a risk for such a short period of time as three months.
When you get a car insurance policy for say, a year, the policy premium you pay is expected to cover the risk that you present to that insurer for that period of time.
When you cut that length of time down to three months, it takes a unique underwriting talent pool to come up with a competitive premium amount based on the risk that you present.
Niche insurance companies service the short-term market because they have the expertise to write unique car insurance policies.
This means they are going to be experienced in writing risks such as yours, pricing them competitively, and also servicing them.
You’ve decided you might need to purchase temporary insurance.
Where to Find Temporary Auto Coverage
It is pretty easy to find temporary insurance coverage on the Internet, whether through our comparison tool or simply through your favorite search engine where you might find companies like Confused and Dayinsure.
We do recommend you use the comparison tool to make sure your temporary coverage rates are good and coverage options are what you want. This lets you look at quotes from a variety of top insurers at the same time.
Of course, the price isn’t the only important thing about finding a good short-term auto insurance plan. You want to be sure that you are adequately protected in the event of an accident.
Think of buying a temporary auto insurance policy in the same way that you would buy a long-term policy. Think about everything that could happen, then consider your budget and what you are able to afford.
How to Choose Your Temporary Coverage Policy
Buying a temporary auto insurance policy is not as easy as buying a more permanent one. You need to dot more I’s and cross more T’s to be sure you are getting a fair deal. So let’s expand on a few of the points above…
For instance, you need to ask about the specifics of the temporary coverage and figure out how easy it is to renew or extend your term.
Check to see how much money your temporary policy covers; some will pay the cost of repairing your vehicle, while others require you to pay a deductible.
Many temporary policies have an age limit that may be as high as 25 years of age.
As with any insurance policy, a good driving record, a safe car, and a neighborhood with a low incidence of crime will cut your auto insurance rates.
Now that we’ve been over how you go about finding short-term auto insurance, let’s go over some of the particulars of policy lengths. Read on to find out more!
How to Compare Temporary Insurance When Shopping Online
When shopping for temporary car insurance, what should you look for to ensure you are getting the best temporary coverage?
- Make sure the coverage includes the required state minimums. This is the minimum amount of insurance that someone can carry and be in compliance. Temporary car insurance can be taken out for a period of 1–28 days.
- Carry enough collision insurance to guarantee your car will be replaced or repaired in the event of damage.
- Consider the amount of time you will need the temporary insurance and purchase enough to cover the time period. It might be wise to purchase enough to cover an extra day or so in case you need more time.
- Look at the different policies and find out which companies cover you under a temporary insurance plan.
- Check the history of the company or ask an online agent to give you the stats on the company. Find out how well the claims on temporary insurance pay for that particular company or policy.
More Risk of Fluctuation in Premium
The risk to you as an insured when you have a car insurance policy for such a short period of time is that you face an increased risk of premium fluctuation.
When you have an annual insurance policy, and you get in an accident within a month or two of the policy, the premium that you are paying is not going to increase until the policy is renewed the following year.
With a three-month car insurance policy, though, the premium is going to increase right after month three when your policy is up for renewal.
This creates an environment for insurers where they can price policies more competitively in terms of premium and then adjust at renewal more frequently.
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What does it mean to let your car insurance lapse?
An auto insurance lapse is defined as a gap in coverage where the policy has been terminated and no coverage is afforded. A lapse can either last for a couple days, a couple weeks, or a couple of months depending on the situation.
The longer the lapse, the more you’re at risk. Read on to find out what you need to know about policy lapses and the consequences you could face if your insurance cancels.
The Six Most Common Reasons Auto Insurance Policies Lapse
There are many reasons why a policy could lapse. While most of the scenarios are within your control, there are scenarios to consider that are beyond your control as well.
- You forget to make your premium payment before the due date.
- You sell your car and let your policy cancel.
- Your car breaks down and you don’t continue your coverage.
- Your vehicle is totaled and you don’t plan on buying another.
- Your policy is canceled in the underwriting phase for failure to disclose claims or accidents.
- Your policy is canceled by the insurer for fraud or a significant change in risk.
How long do you have to pay your auto insurance premiums?
Auto insurance companies often offer their clients several different billing schedules. You may have the option to pay monthly, quarterly, semi-annually, or annually, depending on the carrier.
If you pay in any type of installments, it’s your duty to make your payment by the due date at 12:01 a.m., or your coverage could be canceled.
Even though your bills have a very specific due date, many companies are nice enough to give their customers a little wiggle room when it comes to submitting payments.
Just like lenders offer grace periods, larger insurance companies also do. If the payment isn’t submitted by the end of the grace period, the policy will lapse at 12:01 am the next morning.
How long is the typical grace period?
There’s not a universal grace period that all insurance companies offer. If you know you’re going to be late paying your premiums, you should check with the insurer beforehand to see if there’s some type of arrangement that can be made.
In most cases, grace periods are only three to ten days. Generous insurers offer grace periods as long as 30 days.
Grace periods apply for installment payments but not necessarily for renewal payments. A car insurance renewal is a new period where you’re charged a different rate.
To continue your coverage, you need to make your initial renewal payment. While not all companies require this, it’s best to check before you make assumptions.
What are the penalties for letting your car insurance lapse?
Driving without insurance is a serious offense in states with mandatory auto insurance laws.
If you’re guilty of accidentally or purposefully missing a payment, you could face some serious and costly penalties.
While many of the consequences are monetary in nature, not all of them are. Here are some of the most common penalties assessed:
- A fine of up to $500
- A fine of up to $2000 for multiple offenses
- Suspension of your registration
- Suspension or driver license for up to 90 days
- Mandatory vehicle impound for 30 days and impound fees
- Imprisonment of not more than six months
- Mandatory court appearance and community service
Some of the other consequences you could face could change your life. Such as:
- You could have an uninsured accident and lose your license for up to one year.
- You could be taken to court to pay for damages sustained in an uninsured loss.
- Your wages could be garnished or your assets liquidated.
- Your employer could terminate you for no insurance convictions.
- Your rates could go up.
If you have an insurance lapse, now’s the time to find coverage, and temporary coverage might be just what you need. Use an online rate comparison tool to see how much you’ll pay for a new policy and to weigh your options. Choose which auto insurance policy is best for your budget and find your coverage today.
It gets better!
11 Common Short-term Scenarios (Get Ready!)
These scenarios are common enough that we get questions about them regularly. Read on to find out more…
Scenario #1 – How do I add someone to my car insurance for a week?
A nice gesture like lending your car to a friend or family member for the week can end up affecting your life for months or even years if your loved one gets into an accident. Instead of making any hasty assumptions, it’s crucial that you call your insurance carrier to verify that the driver is covered for a brief period of time.
If you’re a cautious vehicle owner, you may just want to add the visiting driver to your policy for the duration of their visit.
What many policyholders don’t know is that you don’t always need to add a temporary driver to your policy just for the carrier to honor your coverage after a claim.
Here’s what you should know about the six types of standard coverage.
Who needs to be listed on your personal car insurance policy?
Auto insurance contracts are very wordy. The average person who buys an insurance contract doesn’t read through their entire contract.
The few policyholders who do read through their contracts usually don’t fully understand the industry language that’s used.
One of the more complicated topics written into your Personal Auto Policy is about who is covered to drive the vehicle.
You’re required under the terms of the contract to name the drivers in your household who have access to your vehicle, but there will be scenarios where a driver who doesn’t regularly drive your car or live with you needs to take your vehicle.
Who meets the permissive use provision requirements?
You should call your agent to verify how long you grant permission to a driver to take custody of your vehicle.
Permissive use only extends coverage from you to someone you’re lending your car to for a short period of time and not an entire term.
A week is considered reasonable, but a month is a bit too long.
Most people will be covered as permissive users under the policy when they are taking the car for a reasonable amount of time.
If you’re worried your family member or friend won’t fit the bill, here are some factors that will disqualify a driver from being covered under your insurance as a permissive user:
- The driver lives in your home.
- The driver is under the age of 25 and has little to no driving experience.
- The driver has a suspended or revoked driver’s license.
- The driver has regular access to your vehicle.
- The policyholder has signed a driver exclusion form on the driver.
What happens if the driver lives in the home and has their own insurance?
If you’re going to lend your car to a roommate for a week while their car is in the shop, your coverage will extend to them but not because of the permissive use provision.
Since living in the same home totally disqualifies the driver from coverage extensions, you might be confused, but as long as the driver has insurance they won’t affect your rates.
Since the household driver has their own insurance, you only need to inform the company that your roommate will be driving but they have their own coverage. Some companies will ask that you provide proof of insurance, but most don’t.
When that driver is insured elsewhere, they are listed as deferred operators who don’t need to be rated on the car.
Scenario #2 – Can you buy car insurance for a single day?
The answer, in this case, is not as clear-cut as you may think — it will depend on the carrier.
The availability of something such as car insurance for a single day is far more widespread than you may think. But it’s up to you as a consumer to make this discovery on your own — all it takes is a bit of internet or phone research.
Consumers cannot get what they are not comfortable enough to just ask for.
One-day car insurance is available from the vast majority of the big car insurance carriers out there. What you want to do is to inquire about who offers it, and see what premiums they are charging as a result.
As mentioned above, the niche insurance carriers are going to be able to price policies such as one-day car insurance lower than the big carriers. This is because these niche carriers specialize in short-term car insurance.
The car insurance carriers specializing in short-term policies have underwriters, rating information, and actuarial support that allows them to accurately price policies, assess risk, and present premiums that are going to be highly competitive.
In this way, not only can you buy a car insurance policy for just one day, but you also have the ability to buy the policy on-demand.
What if, at the last minute, you need to borrow a car that you need to have insured for only a day?
Some car insurance carriers will allow the policy to be available right when you need it and have it go into effect the minute you need it to be.
Scenario #3 – Car insurance for two weeks only?
Let’s say you purchase a two-week temporary policy. How does that work?
When you take a look at the plan, you are going to find what is known as effective dates.
The effective dates are going to have a start and an end date. Those dates signify the period at which the coverage that is available in the policy is going to be applied to you.
If your policy has an effective date of January 1 and an expiration date of January 15, that means you are going to be covered, to the minute, for the period that is between the effective and expiration dates.
A two-week policy is essentially going to give you two weeks of coverage — 12:01 a.m. to 12:01 a.m. All of the policy limits you are going to have and all of the coverages you are buying will be in effect for the period that the policy is covering.
Scenario #4 – Can you get car insurance for three months?
Car insurance is available for all different periods of time. You can get a car insurance policy for one week, one month, three months, or a year if you need it.
It is all about finding an insurance carrier that is going to be able to service your needs and provide you with the policy you actually want, at a price that is appropriate.
When you need a car insurance policy that is going to be effective for something other than a six-month or annual policy period, you probably want to think outside of the big players.
You want to get a policy that is exactly what you need in terms of length, with the policy limits you want, at a premium that is reasonable.
Scenario #5 – How are cars covered with car-sharing sites?
There are a few peer-to-peer (P2P) car sharing sites now. These allow vehicle owners to lend their cars to other local individuals for a fee. This is different than making a non-commercial car loan because it does involve payment.
Some of this fee goes to the vehicle owner, and some of the fee goes to the car-sharing company that helps mediate borrowing between owners and borrowers.
While typical policies cover loans, they do not cover actual commercial transactions.
Many of the larger sharing companies actually use part of their fee to provide coverage for cars while they are being loaned out. In fact, this might be a good feature to look for if you intend to borrow a car through one of these P2P sites. Here is data we’ve collected on the major players and the types of coverage included:
|Company||Cost||Details||Liability Coverage||PIP and underinsured motorist coverage.||Deductibles||Damage Waiver|
|car2Go||$5 join fee. No annual or monthly fees or membership costs. Trip packages by the minute, hour, or day.||Insurance, parking, and gas included. At least 18 years of age and have a reasonable amount of driving experience.||100/300/50||PIP and UM/UIM when required by state.||$0 and $1,000||–|
|Enterprise Car Share||Annual membership fee and one-time application fee. Hourly and daily rates.||21 or older (18 if a student) and have a valid driver’s license.||State-required limits or supplemental liability protection (SLP) up to $300K||–||$500||Reduced on average for $1.40 hourly fee (location dependent).|
|Hertz 24/7||Free membership. Mileage charge.||Must be 21 or over, have held a license for a minimum of one year and had no suspensions in the last five years.||State-required limits||–||$750||–|
|Zipcar||Hourly and daily rates.||21 or older (18 if a student) and have a valid driver’s license.||100/300/25 (21 years old or younger only state-mandated limits)||–||$1000 damage fee||$79/year damage fee waiver.|
Scenario #6 – Is short-term insurance necessary when renting?
Before continuing with this discussion, make sure you understand the three basic types of auto coverage:
- Liability – This covers the other guy if you cause an accident
- Collision – This covers the car you are driving if you cause an accident
- Comprehensive – This covers non-accident damages. Some examples are theft, vandalism, floods, and hail storms
Now that we have our terminology straight, let’s get down to some important basics…
Do you already own a covered vehicle?
If you already own a car, you should have liability insurance because it is almost always required by state law.
Additionally, if you are fully covered for your own vehicle, both collision and comprehensive insurance should extend to a rental car too. If not, some credit card companies extend limited coverage to rental cars.
Always be sure you check out your own credit card’s plan before you rely on it.
Should I buy a Non-owner policy?
If you do not have your own vehicle — and therefore your own car insurance policy — you surely need some sort of coverage to get behind the wheel of a car.
If you do not want to pay up to $15 a day for rental car company coverage, and you rent frequently, it might be a good idea to purchase a temporary or non-owner policy from a major auto insurance company.
For frequent renters, these temporary or non-owner policies may be much cheaper.
If you borrow frequently or expect to borrow for an extended period of time, getting a non-owner policy is prudent. You can buy these policies from most auto insurance companies.
This will be a good way to make sure you are driving legally, protecting yourself, and preserving your relationship with anybody who is nice enough to lend you a car.
Is rental car insurance necessary?
Rental car insurance is necessary if your personal policy, or company, does not cover the use of a rental car, or if you do not have auto insurance.
So, if you do have coverage, the first step to answer your question rests within the auto insurance policy itself.
When you rent a car, not every driver actually needs to purchase the collision damage waiver by the car rental company.
Some drivers opt to purchase the insurance when they’re traveling on business or simply want the extra protection in the event of an auto accident.
Getting behind the wheel of a rental car may expose you to additional risk unless you know what’s written in your auto insurance policy.
When do I need to buy car rental insurance?
Perhaps you don’t need to purchase car rental insurance. Before you automatically decide to reject the offer to purchase auto insurance coverage at the car rental desk, talk to your auto insurance agent and read your auto insurance policy.
Sometimes, you’ve already purchased identical coverage and deductibles offered by the car rental insurance company.
However, if you’ve purchased only a state-mandated auto insurance policy with low coverage limits, taking a new rental car out on the road without additional coverage could be costly.
If your car is old and you don’t carry comprehensive coverage, buying the car rental insurance in case you have a road accident can save your financial life!
Let’s say you’re on vacation. Does buying rental car insurance make sense then? Possibly! If you’re visiting an unfamiliar location, knowing the roads and inclinations of other drivers may make an accident more probable than when you’re traveling to and from work.
If you’re traveling on business, take a moment to contact your company’s human resources department about your employer’s travel policies. If you’re renting a car on business, the company you work for probably provides auto insurance coverage for your rental car.
When do I need to call my credit card provider?
Before you rent a car, you should call your credit card company. Coverage can differ from one credit card company to another, so it’s a great idea to call the company whose card you plan to use to rent the car beforehand.
Some sports cars, motorhomes, or SUVs may not qualify for coverage.
How do I understand rental auto insurance coverage?
Anyone renting a car knows you usually don’t have a lot of time to read the fine print about what you’re buying if you opt to purchase car rental insurance.
The car rental agent usually offers:
- Supplemental liability insurance (SLI) – for additional liability coverage of up to $1 million
- Collision damage waiver (CDW) – for relief of financial responsibility if your car rental is damaged in an accident, or if it’s stolen
- Personal accident insurance (PAI) – protects you and anyone riding in the rental vehicle in the event of an accident that results in medical expenses. Ask whether you need PAI if you already have a travel policy or health insurance in place
- Personal effects coverage (PEC) – insures against damage to or theft of anything you place in the rental car. Some homeowner’s policies or riders to the insurance policy protect expensive items against theft or loss
If the rental car agent offers a bundle of coverage, you’ll need to read about the individual coverage limits of insurance offered in the bundle.
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Scenario # 7 – Will my car insurance cover a rental truck?
If you have a current auto insurance policy, a rental truck may be covered under your existing policy. You should ask your auto insurance agent or check the terms of your specific policy before purchasing any additional coverage from the rental truck company.
What you need to pay close attention to is any exclusion for the size and type of a rental truck under your auto insurance policy. Typically, larger trucks that include a trailer may not be covered under your auto insurance policy.
This could be confusing because many rental cars are generally covered under a typical auto insurance policy.
Even if you are not involved in an accident with your rental truck while moving, it is possible that the rental truck could be vandalized or stolen. You should clearly understand what coverage you have to protect you in these scenarios.
You may want to consider purchasing additional insurance from the rental car company in case of the total loss of the vehicle.
Purchasing Auto Insurance Coverage for a Rental Truck
If your auto insurance company does not offer you an option to purchase additional coverage for a rental truck, you can work with the rental truck company directly to purchase the required coverage
Another important thing to keep in mind is that insurance requirements vary across state lines. In addition, some auto insurance companies are not licensed to practice in all states.
If you are moving out of state, you will want to make sure that you have at least the minimum required amount of auto insurance to drive your rental truck out of state.
You can consult with your state department of insurance or state department of motor vehicles to find out what the specific coverage requirements are in the states you are traveling through.
And, as with regular automobile rental insurance, another source of insurance coverage may be through your credit card company.
You can find the number of your credit card company on the back of your credit card. You should ask them about any exclusions for the specific size or type of truck you will be using for your move.
Scenario #8 – Car Insurance for a Child at College
Many parents wonder if they need to keep their kids on their policy while they are in college. Here’s a guide on insuring college students.
If you are also looking to insure your child before they head off to college, start comparison shopping today for the best auto insurance rates. Enter your ZIP code above to get started!
When Your College Student is Attending School Nearby
As long as your child is living in your home while they are attending a local college or university, you should keep him or her on your auto insurance just like they were when they were in high school.
When Your Child Leaves Your Home and Attends School Far Away
When students are attending school far away from home, there still may be a need for auto insurance coverage. It all depends on if the student takes a car with them or if they have regular access to other vehicles to commute to school or work.
You should always keep students on your insurance if they are regularly driving at college.
You know you have to insure a car they take with them, but you should also have that barrier of protection if the student will be borrowing or renting cars.
It’s better to pay the premium than to face an uninsured loss!
When will a college student who is still on your policy be covered?
You might be surprised at how many different scenarios there are where your teen might need coverage to drive a car when they are away. You can’t keep an eye on your college student all the time, so you don’t truly know if they will be driving.
As much as you’d like to trust your children, it’s always possible they are doing things they aren’t telling you.
Even though the intention is innocent, if something happens while they are driving a non-owned car, that innocent joyride can turn into a nightmare.
Here are scenarios where your teen will be covered if you keep them on your policy:
- They drive a friend’s car while they are away at school.
- They have to drive someone else’s car because of an emergency near the campus.
- They return home and drive your vehicles or their friends’ vehicles in your local area.
Is there a discount for students who go away to college?
A student who is attending school miles and miles away from you without their car isn’t quite the same type of risk as a student who still lives with you.
They may still be a risk, but they aren’t exposed to the same level of risk as a student who has regular access to a vehicle and who can come and go as they please.
Most auto insurance carriers offer their customers the option to take advantage of a Student Away at College discount when their student is attending full-time school at least 100 miles from their primary residence.
For the student to qualify for the savings, they must be 24 or younger. You may have to provide proof of their attendance at a school far away.
Is there a discount for a student with good grades?
Both local and distant students can qualify for Good Student Discounts as long as they earn a 3.0 or higher and they are attending college full-time.
These discounts for getting good grades are a great incentive for your student to do well in school and save up to 30 percent off of their premiums.
Let your college student stay on your policy for as long as they are dependent on you. When they become independent, they can start to shop for their own policy. Use an online auto insurance quote tool and see what the price difference will be.
Scenario #9 – Can I cancel my policy early to create my own custom short-term policy?
Some people wonder if they can purchase a standard policy then cancel it with to create their own custom short-term policy. We get the question a lot: Can’t I just cancel my car insurance policy within 14 days?
If you decide you want to cancel your policy shortly after you apply, here’s what you should know:
Auto insurance is a contract that’s legally binding. If you read through your policy booklet to understand the terms and conditions of the contract, you would find a lot of legalese that’s difficult for the average consumer to understand.
Even so, both parties that enter into the contract must satisfy their duties when an application is submitted.
Some of the rules laid out in a policy are dictated by the consumer rights that are set forth by the state.
One of your consumer rights when you buy auto insurance is that you’ll be able to cancel your policy at your request.
It doesn’t matter how long you have left on the term, you have the right to request a cancellation.
However, you should be forthright with your insurance provider. If they find out you’ve withheld information on your application, you could find yourself in trouble.
Bottom line: we don’t recommend this route as a short-term alternative.
How do you submit your cancellation request?
Scenario #10 – Car Insurance for a Temporary Resident
Car insurance policies normally allow for coverage when traveling through different states. Unless restrictions have been written into the policy, coverage generally does not become automatically void upon crossing state lines.
The only exception to this would be if the policy maintained a specific clause stating such.
Exclusions of this nature are not the norm.
Vacationers do not need to worry about buying a new policy because they are taking part in a road trip. Auto policies, to an extent, present tremendous leeway to those who venture into a new state.
This leeway does not mean, however, there is never a need to modify a particular policy. In fact, under certain conditions, changing an insurance policy might be necessary for temporary state residents.
And then there are other complexities that may come into play. New Hampshire, for example, does not require anyone to carry auto insurance coverage. What happens, then, when someone from New Hampshire chooses to spend several months in a state with an insurance coverage requirement?
In certain special scenarios, purchasing temporary auto insurance might be necessary.
Locating to a New State
Since there are 50 states, there are 50 different legal statutes and requirements. In California, out-of-state residents are allowed to permanently register their vehicle in the Golden State. In other states, non-resident registration is not allowed.
Yes, there can be major differences in different states.
The differences could impact the type of policy sought. The state of Indiana spells out how someone out of the state for a full year is able to remain a legitimate resident. Falling outside of these exceptions would have an effect on car registration and insurance rules.
Another point to be aware of here is different states maintain different minimum coverage requirements. Not meeting the local state’s minimum requirements can also lead to further hassles and troubles.
A temporary insurance policy might be an option, but acquiring one of these policies may require canceling the original policy on the vehicle and replacing it.
Purchasing, canceling, and repurchasing a temporary policy followed by purchasing another permanent policy might be an odd and costly approach to take. It also could be totally unnecessary considering the other options an insurance provider might present.
Don’t Be Overwhelmed by the Research
Upon realizing there are different rules and requirements in the various states, you might find yourself confused as to how to go about figuring out how to be in compliance.
Honestly, you really don’t need to be an expert on all the various different rules, laws, and regulations. The insurance company’s customer service division is where all questions end up being answered.
Plus don’t hesitate to visit the state’s Insurance Department website or give them a call:
|Alaska||www.commerce.alaska.gov||1-800-INSURAK (in-state outside Anchorage)|
(907) 269-7900 (Anchorage office)
(907) 465-2515 (Juneau office)
(800) 325-2548 (In Arizona but outside the Phoenix area)
|Arkansas||insurance.arkansas.gov||(800) 282-9134 or (501) 371-2600|
|California||www.insurance.ca.gov||(800) 927-4357 (HELP) |
(800) 482-4833 (TTY)
|Colorado||www.colorado.gov/pacific||(303) 894-7855 or (800) 886-7675|
|Connecticut||www.ct.gov/cid||(860) 297-3800 or (800) 203-3447|
|Georgia||www.oci.ga.gov||(404) 656-2070 or (800) 656-2298|
|Hawaii||cca.hawaii.gov/ins||(808) 586-2790 or|
|Illinois||insurance.illinois.gov||(312) 814-2420 (Chicago office) or |
(217) 782-4515 (Springfield office)
|Iowa||iid.iowa.gov||(515) 281-5705 or |
|Kansas||www.ksinsurance.org||(785) 296-3071 or|
|Kentucky||insurance.ky.gov||(800) 595-6053 or |
|Massachusetts||www.mass.gov/orgs/division-of-insurance||(617) 521-7794 or|
|Michigan||www.michigan.gov/difs||(517) 284-8800 or |
|Minnesota||mn.gov/commerce||(651) 539-1500 or|
|Mississippi||www.mid.ms.gov||(601) 359-3569 or|
|Montana||https://csimt.gov||(800) 332-6148 or|
|New Hampshire||www.nh.gov/insurance||(603) 271-2261 or|
|New Jersey||www.state.nj.us/dobi||(609) 292-7272 or (800) 446-7467|
|New Mexico||www.osi.state.nm.us||(855) 4ASK-OSI (855-427-5674)|
|New York||www.dfs.ny.gov||(800) 342-3736|
|North Carolina||www.ncdoi.com||(855) 408-1212|
|North Dakota||www.nd.gov/ndins||(701) 328-2440 or|
|Oklahoma||www.ok.gov/oid||(800) 522-0071 or |
|Rhode Island||www.dbr.state.ri.us/divisions/insurance||(401) 462-9520|
|South Carolina||doi.sc.gov||(803) 737-6160|
|South Dakota||dlr.sd.gov/insurance||(605) 773-3563|
|Texas||www.tdi.texas.gov||(512) 676-6000 or|
|Virginia||www.scc.virginia.gov/boi||(804) 371-9741 or|
|Washington D.C.||disb.dc.gov||(202) 727-8000|
|West Virginia||www.wvinsurance.gov||(304) 558-3386|
|Wisconsin||oci.wi.gov||(608) 266-3585 (Madison) or|
(800) 236-8517 (statewide)
|Wyoming||doi.wyo.gov||(307) 777-7401 or|
Call the Insurance Company
When in doubt, always call the insurance company to clarify the rules and requirements.
We’ve put together a list of phone numbers for major providers:
|ACCC Insurance Company||(888) 542‐4222||Employers Mutual Casualty Company||(800) 447‐2295||LM Insurance Corporation||(888) 398‐8924|
|Access Insurance Company||(800) 817‐9744||Encompass Property and Casualty Company||(800) 262‐9262||Loya Insurance Company||(800) 554‐0595|
|Acuity, A Mutual Insurance Company||(800) 242‐7666||Esurance Property and Casualty Insurance Company||(800) 378‐7262||Mapfre Insurance Company||(800) 922‐8276|
|Allied Property and Casualty Insurance Company||(800) 982‐0756||Farm Bureau Property & Casualty Insurance Company||(866) 399‐3237||Mendota Insurance Company||(800) 422‐0792|
|Allstate Fire and Casualty Insurance Company||(800) ALLSTATE||Farmers Insurance Company of Arizona||(888) 327‐6335||Mercury Casualty Company||(800) 503‐3724|
|Allstate Insurance Company||(800) ALLSTATE||Federal Insurance Company||(800) 444‐6161||Metropolitan Casualty Insurance Company||(800) 438‐6388|
|American Access Casualty Company||(888) 663‐5443||First American Property & Casualty Insurance Company||(888) 922‐5343||MGA Insurance Company, Inc.||(886) GAINSCO|
|American Family Insurance Company||(800) 692‐6326||Geico||(800) 861‐8380||Mutual of Enumclaw Insurance Company||(800) 366‐5551|
|American Hallmark Insurance Company of Texas||(800) 486‐5616||State Farm Mutual Automobile Insurance Company||(800) 782-8332||National General Insurance Company||(877) 468‐3466|
|American National General Insurance Company||(417) 887‐4990||Stillwater Insurance Company||(800) 849‐6140||Nationwide Mutual Insurance Company||(800) 982‐0756|
|American National Property And Casualty Company||(417) 887‐4990||Teachers Insurance Company||(800) 999‐1030||Owners Insurance Company||(800) 346‐0346|
|Amica Mutual Insurance Company||(800) 652‐6422||Travelers Property Casualty Insurance Company||(800) 465‐6241||Pacific Indemnity Company||(800) 444‐6161|
|Anchor General Insurance Company||(800) 542‐6246||United Heritage Property & Casualty Company||(800) 887‐8862||Peak Property and Casualty Insurance Corporation||(800) 334‐0090|
|Arizona Automobile Insurance Company||(888) 793‐7888||United Insurance Company Inc.||(602) 393‐3334||Pekin Insurance Company||(800) 322‐0160|
|Assurance America Insurance Company||(888) 580‐8134||United Services Automobile Association||(800) 531‐8722||Permanent General Assurance Corporation||(844) 328‐0306|
|Auto‐Owners Insurance Company||(800) 346‐0346||Vigilant Insurance Company||(800) 444‐6161||Pharmacists Mutual Insurance Company||(800) 247‐5930|
|Badger Mutual Insurance Company||(800) 837‐7833||Western General Insurance Company||(800) 758‐3311||Primero Insurance Company||(800) 925‐8185|
|Bankers Standard Insurance Company||(800) 444‐6161||Young America Insurance Company||(800) 554‐0595||Privilege Underwriters Reciprocal Exchange||(888) 814‐7873|
|California Casualty General Insurance Company of Oregon||(866) 680‐5143||General Casualty Company of Wisconsin||(800) 362‐5448||Progressive Advanced Insurance Company||(800) 876‐5581|
|Central Mutual Insurance Company||(800) 736‐7000||Great Northern Insurance Company||(800) 444‐6161||Progressive Preferred Insurance Company||(800) 876‐5581|
|Cincinnati Insurance Company||(800) 635‐7521||Hartford Casualty Insurance Company||(888) 413‐8970||Response Insurance Company||(800) UNITRIN|
|Civil Service Employees Insurance Company||(800) 282‐6848||Horace Mann Insurance Company||(800) 999‐1030||Safe Auto Insurance Company||(800) 723‐3288|
|Coast National Insurance Company||(888) 888‐0080||Horace Mann Property & Casualty Insurance Company||(800) 999‐1030||Safeco Insurance Company of America||(877) 672‐1985|
|Commonwealth Casualty Company||(877) 603‐1310||IDS Property Casualty Insurance Company||(800) 842‐3344||Safeway Insurance Company||(866) 605‐9501|
|Country Casualty Insurance Company||(866) 268‐6879||Infinity Casualty Insurance Company||(800) 782‐1020||Secura Insurance, A Mutual Company||(800) 558‐3405|
|Country Mutual Insurance Company||(866) 268‐6879||Infinity Insurance Company||(800) 782‐1020||Secura Supreme Insurance Company||(800) 558‐3405|
|Country Preferred Insurance Company||(866) 268‐6879||Infinity Safeguard Insurance Company||(800) 782‐1020||Sentry Insurance A Mutual Company||(800) 334‐0090|
|CSAA General Insurance Company||(800) 207‐3618||Infinity Select Insurance Company||(800) 782‐1020||State Auto Property & Casualty Insurance||(800) 444‐9950|
|Economy Preferred Insurance Company||(800) 438‐6388||Integon Indemnity Corporation||(877) 468‐3466|
|Electric Insurance Company||(800) 227‐2757||LM General Insurance Company||(888) 413‐8970|
All pertinent facts should be provided starting with telling the customer care representative what state the move is to and how much time will be spent in that particular state.
If the appropriate coverage requires new underwriting, then providing the exact address of the place the car will be located becomes necessary. The car probably will need to be registered in the new state.
Scenario #11 – Car Insurance to Go to Mexico
Mexico is a wonderful place to visit. As a tourist, you can enjoy authentic Mexican cuisine while you shop and explore a new, culturally diverse land.
If you live just north of the border, Mexico could be just minutes away from your home. No matter how close it may be to you, you still have to comply with unique laws pertaining to driving and insurance when you step foot on Mexican soil.
You can drive in Mexico with your U.S. license and U.S. auto insurance up to a point. Once you pass that point — the Border Zone — you have to apply for a permit and a policy just to drive throughout the country.
Staying protected in a country like Mexico is crucial. We’ll try to answer the questions you may have about driving through Mexico:
If you have personal car insurance in the U.S., are you covered?
You could cover your vehicle with the most comprehensive car insurance policy and still be at risk of suffering an uninsured loss if you assume that you have protection when crossing borders.
A domestic car insurance policy is meant to protect you while you’re driving your car domestically — not internationally.
With this being said, your policy does still afford you some protection so that you have time to visit a Mexican insurance agency to get specialized coverage. There are major restrictions.
What are the restrictions under your U.S. policy?
If you buy insurance in California or another state bordering Mexico, your policy probably had a provision written into it that will offer you a limited extension of coverage that protects your car in the event of an accident.
Since Mexican liability laws are very different from American laws, your U.S. liability coverage won’t extend. Here are some restrictions:
- Only some Personal Auto Policies have provisions that protect you when driving into Mexico or Canada.
- If there is a provision that extends coverage, you are only afforded protection while you’re in the Border Zone.
- You can only be staying within the Border Zone for a period of 10 days or less for coverage
- Many carriers will only pay for comprehensive or collision claims within the Border Zone and not liability losses.
What does the insurer mean by the Border Zone?
The term Border Zone is a very broad one. It’s typically the zone in Mexico right by the U.S. border where Free Trade is allowed.
Insurers may cover you beyond the Border Zone, but most of the time the coverage ends as soon as the free-trade zone ends. In Mexico, the border zone is 20 to 30 kilometers from the U.S. border.
Since every insurer and policy form offers a different type of coverage restriction in Mexico, it’s in your best interest to contact your agent and ask for the details in writing.
If you have it all laid out for you in writing, you can protect yourself from claims denials or going too far into the country for too long without buying a different policy.
Make Sure You Have Permission Before Crossing the Border
You don’t just need permission from your insurer to drive over the border if your car is financed, you also need to ask the lender for permission to drive the financed car in Mexico.
You’ll need to get your permission in writing before any insurer will write you insurance in Mexico.
Most borrowers can get permission by making a phone call and explaining the purpose of the trip. If you’re caught driving a financed car into Mexico and you don’t have that written proof, claims could be denied and the car could eventually be impounded.
What if you’re going to rent a car to drive into Mexico?
If you’d prefer not to risk it by driving your car over the border where there are questionable practices, you could just rent a car. If you’re renting a car at the airport or at a satellite agency in the U.S., make sure you’re allowed to take the car into Mexico first.
Some rentals are only allowed in certain states and some are just for people who are going to travel out of the country. It’s better to choose an agency that specializes in rentals to Mexico to avoid running into some serious contractual and legal issues.
If you do rent a car, your personal insurance isn’t going to extend to the rental like it would if you were in the U.S.
How do you insure a rental car to drive into Mexico?
When you drive in the United States, your existing personal car insurance does extend to the rental because it’s classified as a temporary substitute auto. You’re not afforded that luxury if the rental is out of the country.
That’s why you need to get special rental car insurance through the Mexican rental agency.
There are a variety of different types of insurance you can purchase on rentals that provide you with a high level of protection. It’s up to you to choose which types of insurance you want to pay a daily rate for and which options you want to reject.
Can you get special coverage on your personal vehicle?
It’s very easy to buy temporary Mexican insurance on your car for protection. You can either apply for the coverage online or you can get it when you’re crossing the border.
Getting quotes can ensure you get a good rate for protection on your car that doesn’t have all of the restrictions.
You should do your research to master driving in Mexico as a tourist. It’s best to stick to the toll roads and avoid driving at night to avoid nasty conditions on foreign roadways.
If you want to enjoy freedom on the open road in Mexico, be sure to price the cost of Mexican insurance, and then purchase the policy that’s right for you.
We’ve now covered all the ins and outs of all the various scenarios in which you could possibly find yourself in need of temporary insurance (and there were a lot of them — phew!)!
But that’s not all…
Frequently Asked Questions
Does your policy cover you when you’re lending your car?
If you’re lending your car to someone who’s not named on your policy, there’s a strong chance your insurance will pay if that driver gets into an accident.
Your personal car insurance policy has a special provision written into it that says permissive users are covered like listed drivers if they meet the permissive use classification.
What if I still don’t know if I need short-term insurance?
Ask for advice from an insurance professional when comparing plans or anytime you think you need short-term insurance.
Insurance agents can offer sound advice on how much to get and for how long, as well as options that are the most feasible while on the short-term insurance plan.
Why do you need to keep a college student away at college on your policy?
Students who are away at college are usually still dependents. When you have a dependent who drives, it always puts you at risk.
If you’re paying for room and board or you’re helping your child pay for college tuition, they are financially dependent on you, and this can work against you if there’s ever an accident.
When parents make the mistake of removing their children too soon, they won’t have any liability protection to pay for claims made by other drivers. They also won’t be entitled to having the insurance company cover the cost of legal defense.
What if I live in two different states? Should I buy temporary coverage in one or both of them?
There are so many variables in this scenario. For instance:
- How long will you be staying in each state?
- Do you have a permanent resident in one or both?
- Are you driving an insured vehicle you own to the second state?
- Do you have a vehicle registered in both states?
We highly recommend you consult with an insurance provider who is licensed in both states to find the right coverage for your situation. Check out our table above with State Insurance Department sites to find out what providers will be licensed for both states in question.
Enter your ZIP code below now to compare short-term car insurance plans from multiple companies!