On average, short-term auto insurance costs you more than a long-term plan. But a long-term plan costs more de-facto than a short-term plan does. This creates a situation wherein both are viable, but for completely different reasons – and figuring out what those reasons are and whether they apply to you is important when deciding what kind of an insurance policy you’re looking for in the first place.
As with anything, short-term insurance has its place – especially among the younger crowd. Here’s why specifically:
It’s a Pretty Situational Situation
The basis of a short-term plan is to have coverage for a short period of time without having to pay for the costs of a long-term plan to keep you covered for months. There are several situations where this sort of coverage would be beneficial:
- You’re learning to drive. Specifically, a driving school student without the time for frequent lessons. In this case a short-term plan may be more beneficial as it provides the safety and coverage of a regular plan without an expensive monthly premium.
- You only really take joy rides. If you’re a car enthusiast, and normally use public transport for regular transportation, you don’t need a long-term insurance plan. If you’re only into taking your car out for a spin when you’ve got a little vacation time, or every other weekend, or on some other form of irregular scheduling, you can avoid excessive costs through a short-term plan.
- You’re just using the car to move. If you’ve borrowed a friend’s van to move to a new house or apartment, then getting coverage for the day is much, much cheaper than the alternative.
- You’re renting a car. If you’re out of state or abroad and looking to rent a car, the rental service will typically ask you to buy their partnered short-term insurance policy, although you could use your own insurance policy if it applies to your circumstances. Contact your provider and ask them about rented vehicles within the country. If you’re in an urban environment like New York City, it may be more cost-effective to use public transport given the cost of rental vehicles, according to Statista.
- Your car is in the repair shop. If your car is being repaired, it’s likely you’ll have to borrow someone else’s car or rent a car to get around. In that case, you may also have to opt for short-term coverage, depending on how long your car will have to stay at the garage.
- It’s a friend’s car, and you’re taking it out for the weekend. The dilemma here is similar. If you’re borrowing someone’s car to head out for the weekend, or if it’s been uninsured for too long and is in need of a new plan, then short-term insurance is better than renewing a more expensive long-term plan.
In the end, the biggest consideration is always how long you’re going to be using the car. If you don’t drive as part of your daily – or even weekly – routine, or if your car is temporarily unavailable, then getting a long-term plan for a borrowed or rented vehicle just won’t be worth spending your hard-earned money.
Here’s How It Works
Getting short term auto insurance is fairly simple, actually. If the car isn’t yours, then you’ll have to contact the owner you’ve borrowed it from to get the ball rolling. Begin with the basic details – the details of the car, your license details, and your personal details – specifically your name, address and contact information.
Next, consider the risks. While your state may only require you to opt for liability coverage, you may want a little more than that if you think your activity warrants enough risk – such as driving a new vehicle type through high traffic for the first time. Statistics also matter, for example Montana has more deaths due to vehicular accidents per 100,000 drivers than any other state, at 22.6, according to 2013 statistics from the IIHS. While you can get a short-term plan from your same provider, you want to keep these plans separate.
Driving in a new car always presents a certain amount of risk compared to driving within your own car, and if you happen to have a long-term plan that gives you continual discounts on a no-claim basis, you don’t want to endanger that with the potential of a minor accident.
Finally, if you’re not a car owner with a pre-existing plan and a preferred company, it’s best to shop around and compare rates as much as possible.
What about Adding Someone to Pre-Existing Coverage?
If you’re letting your teenager or friend borrow your car, it’s possible to add them to your pre-existing coverage, but you may end up paying more for that than to simply create a temporary plan for them. Contact your insurance provider to determine whether there are special temporary plans available for family members, or friends borrowing your car.