Guide to Short-Term Auto Insurance

Short-term car insurance covers an automobile and its driver for a day or week. It can augment existing coverage or bridge the gap when the motorist is in-between policies. Buy temporary car insurance with care; it is quite possible to over- or under-buy.

Who buys one-day car insurance (and similar products)?

A cheap short-term car insurance policy comes in handy when transitioning from a beat-up car with minimum coverage to a brand-new vehicle that require comprehensive and collision protection. While driving off the dealership lot on Friday night -- well after your agent has packed it in for the night and weekend -- could be a white-knuckle experience, a three-day short-term car insurance policy lets you enjoy complete, albeit temporary, vehicle coverage. In this case the coverage would remain in effect until you can buy a standard policy to insure the new car.

Other reasons to check into short-term auto insurance include temporary vehicle ownership, travel, borrowing a vehicle from a friend, operating a show car that is usually kept in a garage and therefore lacks full coverage, and also ride-sharing across the country. As pointed out by Car Talk, if there are titling issues with a used vehicle, short-term car insurance covers the gap between a lender receiving a pay-off and a subsequent buyer receiving a clear title to the vehicle.

Where do you buy cheap short-term car insurance?

Your current provider is the logical first choice for short-term auto insurance purchases. Based on your history with the company, there is a good chance that the agent can offer you a reduced cost for one-day car insurance and related coverage products. In the case of a new car purchase or a rental situation, it is the dealership or rental agency that may offer a binder for the desired coverage.

Keep in mind that this type of ad hoc coverage is governed by the law of supply and demand: If you need it right now and there is no other provider available, you usually pay more than if you can contract with your regular insurer on your terms. National insurance companies may be cheaper than local coverage vendors.

Caveats

Short-term auto insurance products vary in scope, cost and coverage. Some policies require a primary policy to be in effect; others only apply to a certain driving occasion, such as a car rental. It is wise to comparison-shop before needing the coverage and to stick with the larger national providers whenever possible. Of course, if you are looking for one-day car insurance coverage for a race car, show- or recreational vehicle, going with a smaller specialty provider may be a necessity.

Source

Car Talk: "Short-term car insurance for out-of-state car purchase"