Short-term car insurance is defined as a
car insurance policy that covers you from one day to 28 days. You’ll find many
situations that may require the driver or the owner of a car to obtain a
short-term policy. If someone borrows your car for any reason, you may need to
purchase short-term insurance, depending on the state you live in and the type
of policy you have (some insurance follows the driver, some follows the car).
When you get a short-term policy, it should be separate from your existing car
insurance to protect your premium and it should cover the same risks that your
existing insurance policy covers.
Get coverage details if you lend
your car to another driver. Nearly all states
require cars and drivers to carry insurance. Talk to your insurance carrier
about what your insurance policy covers and, more importantly, what it does not cover.
Coverage
when borrowing or lending a vehicle may vary depending on the state and the
policy. It is important to clarify exclusions, or what specifically is not
covered by your insurance.
If you
have liability coverage, this usually means you are insured when you operate a
vehicle even if it is owned by another party.
If you
have comprehensive and collision insurance, this follows the car and protects
it against damage from accidents or vandalism. It may not, however, cover
the person who is driving the car if he or she is not the owner.
Ask
your insurance agent if permissive use is covered by the liability terms of
your policy, or whether or not other drivers will be covered by your policy if
you allow them to drive your car.
You may
lend your car to someone when an emergency occurs. A friend or family member
may need to drive your car and this should be covered under your insurance
policy.
Short-term
car insurance covers you when someone borrows your car and has an accident. If
you borrow someone else’s car, you should also have this insurance in place to
protect yourself as you drive.
A
driver should insure their car when a child is home from college and is using
the car for a short time.
If you
have a student driver who is using your car, you may need short-term insurance.
Look into coverage if you borrow someone else’s car. Many of the same driving risks exist if you borrow someone else’s car. Because you don’t normally drive the car, you may be at a higher risk of an accident.
If you
have insurance, ask your agent if your policy covers you and/or another car if
you borrow someone else's vehicle.
When
you rent a car, the rental agency will ask if you want to purchase their
short-term coverage, or use your own insurance policy. Speak with your
insurance agent to determine which decision is right for you. Rental car
insurance is usually very expensive and may be a duplication of the coverage
you already own.
In
addition to cars, renting a moving van also requires short-term insurance. It’s
very unlikely that the van’s driver has any experience driving a moving van.
The risk for an accident may be higher.
You may
borrow a car while your main vehicle is being repaired. Make sure that you look
into short-term coverage, as your insurance may not cover the borrowed car.
Consider the risks that your
short-term policy needs to cover. You
need to insure against the same types of risks your primary car insurance
policy covers. An insurance agent can explain the items your policy can cover,
and the monthly premium cost of each item.
Your
state may only require a minimum level of coverage to drive a car — almost
every state requires drivers to carry liability insurance. However, it’s
important to discuss the risks you may face with an insurance agent. The
minimum policy may leave you exposed to other types of risks, should an
accident occur.
You
want coverage for both your car and any damage you cause to other cars, due to
a collision.
Your
short-term policy should cover any injuries incurred by others if you caused an
accident (any injuries you suffer should be covered by your health insurance).
The
lender may require you to be covered beyond simple liability insurance,
especially if the car is particularly valuable.
Inquire about a short-term policy through your existing insurance company. Your current insurance provider may offer short-term insurance at a reasonable cost. Since you’re already a customer, you may be able to earn a discount on the new policy premiums.
Keep your short-term policy
separate from your primary car insurance. Your
current insurance policy may offer a no-claims bonus. This is a discount on
future premiums if you don’t have any claims over a certain period of time.
Keep your short-term policy separate, so that you don’t increase the risk of
having a claim on your existing policy.
Any
claims may increase your insurance premiums. Make sure that you understand what
each policy is covering.
Find an insurance company. If your current insurance company does not offer an
effective short-term car policy at a reasonable cost, you can look for a second
insurance firm. It’s important to do some homework about any company you
choose.
Verify
that the insurance company is licensed to sell insurance in your state. To do
this, check with your state’s insurance department.
Many
states provide a searchable database of licensed insurers.
Contact
a licensed insurer and ask if they sell short-term insurance. If they do, ask
for a quote. Be ready to provide basic information about yourself and the
vehicle.
Compare short-term insurance quotes
to make sure that the coverage provided under each policy is the same. For example, bodily injury, personal property damage,
and medical coverage amounts should be equal, and the policies should be for
the same number of days.
You
should check on each company’s credit rating through A.M. Best. This firm
reviews the financials of insurance companies. They review to determine the
financial ability of the company to pay claims on insurance policies.
To be
comparable, each policy should cover the same type of vehicles.
Comparable
policies should have the same maximum dollar amounts of coverage.
Purchase the short-term car
insurance policy. After you’ve checked
with your existing firm and possibly researched other companies, purchase your
policy. If you choose a new company, however, they may ask you for more
information than your current insurance provider.
You
will provide the make, model, year and vehicle identification number (VIN) of
the vehicle you plan to insure.
Give
the insurance company your name, address and driver's license. If someone else
will be driving your car, you may also need to provide his information.
Explain
any recent accidents or tickets you have been issued. The same information may
be required of another person driving your car.
It’s
critical that you verify that your policy is in place. In many cases, you can
pay for your policy online and print your own insurance cards. Verify your
coverage before you drive someone’s car, or you lend your car to another
driver.
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