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Temporary car insurance

By Posted : 06/30/2015

Temporary car insurance is hard to find. There are some legitimate reasons to seek short-term coverage – and some very shady ones that attract the attention of law enforcement.

However, the solution for those in need of short-term car insurance is not a policy marketed as temporary but a full-term policy that you cancel when you no longer require insurance coverage. Anything else may leave you on the receiving end of a ticket or a lawsuit.

And don't forget: Even if you're looking for only temporary coverage, comparing car insurance quotes will save you money. Here are options for:

Occasional coverage for a weekend cruiser

 You own a daily driver as well as a car used for weekend or seasonal use.

Many insurers will allow you to add and drop extra cars as needed to your policy (online or by phone) so that you’re not stuck insuring a car year-round that you drive only occasionally.  This type of “short-term” coverage means you would cancel the coverage whenever the car was not in use.

Keep in mind that most states require any registered vehicle to have liability coverage.  If you take liability coverage off a car, you’ll also need to turn in your registration and plates. 

Some states allow for planned nonoperation of cars, which basically lets you suspend your registration and cancel insurance on a car you won’t be driving.  You must sign up for this at the DMV. When you’re ready to place the vehicle back on the road, you’ll pay registration fees and obtain at least state minimum coverages.

Another option, if your weekend toy is a collector or antique car, is to buy a collector car limited-use policy.  A flexible, limited-use policy allows you occasional driving of your vehicle but expects you to keep the mileage low, at only 2,000 to 3,000 miles annually.  With this type of policy, you don’t have to start and stop coverage but carry it continuously for reasonably cheap rates.

If your weekend car doesn’t fall into the collector category, and you decide to keep year-round coverage on it, see how much of a reduction in rates you can get for low annual mileage and infrequent use.

Short-term use of a car you will resell

You buy a car that you plan to use for a short period of time and then resell.

You don’t really need a special temporary car insurance policy, but a six-month policy that you can cancel at any time.  Learn how to cancel a car insurance policy.

For instance, say you’re buying a car to go on a two-month road trip with your friends and plan to sell the vehicle when you return.  You may need insurance for only a short period of time, but because car insurance policies aren’t sold in that manner, you’ll have to buy a policy for the shortest period possible, six months normally, and then cancel it once you’ve sold the car. 

When you cancel a policy, you have to inform the insurance company – don’t let it cancel out for nonpayment -- and there may be cancellation fees.  If you paid upfront for the policy, you might be due a partial refund when you cancel it.


Temporary insurance for registration purposes

You cannot buy insurance to register a car and then drop it immediately afterward.

Some states have laws set up to prevent the practice.  For instance, Florida will let car owners cancel their auto insurance policies during the first 60 days only if they can show proof that they no longer own the car or have replacement insurance coverage with another insurance company.

In states with insurance databases, insurance companies input when a person starts and cancels a policy.  If you cancel a policy and don’t start a new one right away, but still have a vehicle registered, you can be penalized.

If your car is registered, the law requires insurance. If you don’t want to buy insurance, unregister the car and don’t drive it -- or face penalties and even possible loss of your car.

With some digging, you may find companies willing to sell you “7-day insurance.” That doesn’t make driving without insurance after the policy expires any less illegal.


Car insurance for snowbirds and vacation homes

When you keep a car in another state for an extended period of time, you may need to register and insure the car there.

Each state has its own rules, but in general, if you register a car in that state, you must insure it there as well. You'll need to consider insurance during the period when the car is stored; you may be able to reduce or drop coverage.

We've outlined the rules for Florida and Arizona, two popular spots for winter homes, in "Temporary and vacation home car insurance."

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