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What is short term auto insurance?

Things to Remember...
  • Auto insurance protects us from suffering from big financial losses if these things do occur
  • If you do not own a car, and if you are not sure how you are covered if you use somebody else’s vehicle, temporary auto insurance might be a sensible and affordable way to protect yourself
  • The most common reason people consider buying a temporary policy is to be certain that a rented vehicle is covered, and these are often purchased over the counter at a vehicle rental agency

Nobody plans on having an auto accident, getting stuck in a hail storm, or having somebody steal the vehicle they are driving.

Auto insurance protects us from suffering from big financial losses if these things do occur. This is true if you own your own car or plan to rent or borrow one.

If you do not own a car, and if you are not sure how you are covered if you use somebody else’s vehicle, temporary auto insurance might be a sensible and affordable way to protect yourself.

Be sure to check out the FREE auto insurance comparison tool above to find the best coverage for your needs!

Why Short-Term Coverage May be Necessary

AdobeStock_87768368-1600x1600Many vehicle owners rarely need to purchase short-term auto insurance. They already have their own vehicles insured with permanent auto policies.

Most regular auto policies also extend to rental vehicles, but you should always call your insurer to make certain.

For the rare occasions when a typical vehicle owner borrows a car, he may rely upon the coverage that covers his regular car.

However, there are some occasions when both vehicle owners and non-owners might consider the purchase of short-term coverage.

The most common reason people consider buying a temporary policy is to be certain that a rented vehicle is covered, and these are often purchased over the counter at a vehicle rental agency.

However, there are other sources of these temporary policies, and there are also other reasons for purchasing them.

Some reasons for purchasing short-term coverage might include:

  • Car rentals – These are for vehicles rented from rental car companies
  • Car sharing – These are different than rentals, and they come from car sharing websites
  • Borrowing a vehicle – This implies borrowing a vehicle from a friend or family member in a non-commercial transaction

Do you need car rental insurance?

If you rent a lot, there may be better places to purchase temporary coverage than car rental counters too.

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

Do you already own a covered vehicle?

AdobeStock_62225084-1600x1600If you already own a car, you surely have liability insurance because it is almost always required by state law. All 50 U.S. states and DC require minimum liability insurance.

Typically, this existing coverage extends to rental cars too. Check with your insurer to be sure, but you should be able to satisfy legal requirements with your own liability insurance.

Additionally, if you are fully covered for your own vehicle, both collision and comprehensive insurance should extend to your rental car too. If not, some credit card companies extend to limited coverage to rental cars.

Always be sure you check out your own credit card’s plan before you rely on it.

Some credit card coverage plans are limited, and they probably do not include liability.

But it might be sufficient, especially if you already have basic coverage.

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If You Do Not Own A Vehicle, Get Temporary Insurance!

If you do not have your own coverage, you surely need some sort of coverage. I

f 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.

Do you need to temporary coverage if you borrow a car?

That does not mean that the vehicle owner will be pleased if you have an accident and potentially run up his premium or force him to pay deductibles.

In some cases, the owner might even sue you for damages. Also, you do have to rely on the owner’s word that he is properly covered.

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.

How are cars covered with car-sharing sites?

Dollarphotoclub_103835115-1600x1600There are a few new 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.

How To Be Certain You Are Covered

If you already have a covered vehicle, your own local agent or insurer is your best resource. A quick phone call can give you the right answers and peace of mind.

If you do not have coverage now, you can still call a local agent to find out what you need to protect yourself. In any case, proper temporary car insurance can save your finances.

You are free to shop around for short term car insurance to make sure you purchase the right coverage at the right price too. Simply enter your ZIP code into the FREE quote comparison tool below to get started!

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