Short Term Car Insurance –Meaning, Benefits and How to Buy
Have you
been suggested to buy short-term car insurance and want to know what is it?
Getting car insurance is a pricey affair and those who have bought it can vouch
for that. Most car owners buy insurance for twelve or six months but there are
times when they don’t need a car for a long time. So why should they spend so
much on insurance? Here short-term car insurance could be a great option.
Before proceeding further and knowing its different nuances let us know what
short-term or temporary car insurance is?
Short
Term Car Insurance – Meaning and Definition
Short-Term
car insurance, also called temporary car insurance is auto insurance that
offers insurance to your car for a shorter period. This type of insurance has
certain benefits. However, it is not without disadvantages. With temporary car
insurance, you will get your insurance revised more frequently than 12-month
insurance which is known for a long lock-in period.
So before
proceeding further it would be relevant to know the pros and cons of short-term
car insurance.
Reasons
to Buy a Short-Term Car Insurance?
There
could be several reasons to buy short-term car insurance. Here are we listing
the major reasons when you look for it.
Shifting
Insurance Company
You need
to buy temporary cover car insurance when you are switching from one insurance
provider to another. As you have already dropped the former insurance and have
not taken the new one, you need to buy insurance for the intervening period.
Lending
Your Vehicle
If you
are giving your car to your friend, relative, or someone who is not covered by
your existing car insurance then you need to buy short-term car insurance for
that period. This insurance will cover your car while your friend, relative, or
other persons are driving it.
Selling
Your Car
Are you
planning to sell your car and get a new feature-rich car for you? If yes, you
may have to buy temporary car insurance. Such insurance is required when you
are selling your car. In this case, the buyer won’t get covered by the existing
insurance. So here temporary car insurance can serve the purpose.
Renting a
Car
There are
times when you are renting a car for some purpose for a certain period. Most of
the rental car companies offer insurance but as a renter, you might not agree
to buy insurance from them. In such a situation, you might be looking for
temporary car insurance.
Preventing
Lapse in Coverage
Short-term
car insurance is also ideal for those who want to fill up the lapse in
coverage. There are times when your existing auto insurance has expired and you
have not renewed it or you are not in a position to renew it. In this period,
you can manage with temporary car insurance.
Pros and
Cons of Short-Term Car Insurance
Besides
being cheap short-term car insurance has several other benefits. However, it is
not without its drawbacks. Here we discuss it one by one.
Advantages
of Short-Term Car Insurance
As you
are seriously considering buying temporary car insurance you might be
interested in knowing its benefits. These are as follows.
No Claim
Bonus Unaffected
Most of the
year-long or long-term policies come with no claim bonus (NCB). Sometimes No
Claim Bonus is also referred to as No Claims Discount (NCD). To put it simply,
you are entitled to get some bonus or discount if you don’t make claims. If you
get a claim, you are not entitled to a bonus.
It is not
the case with short-term car insurance where your chances of getting a bonus
remain unaffected even after making a claim. Such bonuses can save you a
significant amount.
Adjusting
The Policy Takes Less Time
Time-saving
is another factor that makes short-term car insurance desirable. Adding some
additional benefits is easy with this insurance. Adding the same benefits to an
annual cover becomes time-consuming. Most of the service providers take very
little time to add other benefits. However, some also give you the option to do
it yourself through online mode.
Easy to
Amend
There are
times when we need to make changes in our policy. To make changes in your
yearly car insurance you have to make a number of formalities. But not with
temporary car insurance where making changes are quite simple and most of the
time you can do it on your own. Don’t worry if you have bought one-month
insurance and want to extend it to three months. You don’t have to worry about
it as the changes can be made easily.
Cost-Effective
Besides
other things, cost-effectiveness is another benefit of short-term car
insurance. As it offers you to pay for the insurance for the time period you
need, it saves you the money you may have spent on buying an annual cover. As
they say, the money saved is money earned.
Disadvantages
of Short-Term Car Insurance
Short-term
car insurance might be looking good on the surface but it is not about its
drawbacks. In case of an accident, your car renewal premium can increase to a
significant extent.
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Short-Term
Car Insurance – Buying Precautions
Buying
insurance of any type including short-term car insurance requires a lot of care
and precautions. Here are some precautions you should take while insuring your
car for a short period.
Find the
Right Company
Not all
insurance companies provide short-term car insurance so you have to search for
the companies providing it. You should get ready to do research to find a
company offering such insurance. You can compare different policies available
online to get the right deal. You can also request a quote from potential
companies.
Compare
the Prices
Cost is
one of the major considerations while buying temporary car insurance. As
getting the right value for your money is the main goal for buying such
insurance, you should look for insurance providers that meet this criterion.
You
should check the breakups of the cost. Premiums, deductible and the down
payment to be made are all part and parcel of the cost. However, you should
consider it to be slightly expensive as you are getting it for a small time and
not many companies are offering it.
Know the Coverage
While
buying short-term car insurance you should also know its coverage. Go through
the policy documents and see the kind of coverage this particular temporary car
insurance policy is providing. Does it provide coverage for collision, medical,
and cost of providing onsite support?
Understand
T & C
You
should read the fine line below the insurance policy. Go through the terms and
conditions attached to the policy. Ask whether they will be providing a refund
if you cancel the policy. If yes, then
what percentage. You should also ask about the additional cost of extending the
insurance.
Also Read
How to Get an Insurance – A Complete Insurance Buying Guide
Short
Term Car Insurance – Frequently Asked Questions
Can I get
car insurance for a month only?
Yes, you
can. You can buy car insurance for the shortest time you drive a car. Forget a month, you can find car insurance as
short as a day.
Can my
18-year-old get short-term car insurance?
Short-term
car insurance or temporary insurance can cover over 18-year-old. Most annual
insurance covers don’t provide a cover to an 18-year-old but most temporary
insurance cover providers do it.
When
should you buy temporary car insurance?
You
should buy temporary car insurance if you fall in one of these categories.
- You are a
student. - You are
driving a car in a different location than yours. - You are
borrowing a car from a friend or family. - You are
staying abroad but driving on a visit to your home country. - You are
driving seasonally. - You are
buying a car to resell it soon.
What is
covered in temporary car insurance?
The
coverage depends on several factors including company, location, and type of
insurance you are buying. Through this insurance, you can cover liability,
collision, medical expenses, and uninsured motorists.
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