Temporary commercial car insurance: What you need to know

Q: Can you get temporary business car insurance?

Yes , you can get temporary (or short-term) commercial car insurance. However, not all insurance companies offer this type of coverage. Working with an independent insurance agent or broker can make finding appropriate coverage easier than doing it by yourself.

What is temporary business car insurance?

Temporary insurance policies last a short period of time, as opposed to traditional six- or 12-month auto insurance policies.

“Short-term or temporary commercial auto insurance provides coverage for commercial vehicles for a limited time, often ranging from a day to a few months,” Friedlander says.

Short-term commercial auto insurance can be purchased with a variety of coverage options, including liability, which covers bodily injury and property damage claims when you're at fault in an accident. Your state will set minimum requirements for any policy you purchase.

However, short-term commercial vehicle policies may have high deductibles and not offer the same degree of coverage as a standard policy. Short-term policies typically do not cover trucks hauling cargo, nor can they be used as proof of insurance to register a vehicle.

“It’s possible that temporary commercial auto insurance will have gaps in liability coverage and be less comprehensive than a traditional policy,” says Alex Stalvey, managing partner at Bannister, Wyatt & Stalvey, a Greenville, S.C., law firm.

Who needs temporary business insurance?

Just about every state requires companies to insure the vehicles they use for commercial purposes, even on a temporary or seasonal basis. These businesses are candidates for short-term insurance. For example, if you are transporting one of your trucks to the mechanic for repairs before hauling cargo cross-country, you need a temporary vehicle policy.

In those situations, a short-term policy may make more sense than paying for a policy that lasts all year.

How does temporary business car insurance work?

Temporary car insurance works the same way as standard commercial car insurance. You purchase a policy that will include bodily and property damage liability. If one of your vehicles or employees is involved in an accident while conducting business, you file a claim.

However, these policies generally don’t cover any inventory or tools and equipment in the vehicle involved in an accident. And when the policy term ends, your coverage will also end.

Temporary business car insurance providers

Most major insurers don’t sell short-term business car insurance. Companies that do offer short-term commercial policies include:

Classic Truck Insurance. This specialty insurer offers 30-day commercial trucking policies as well as a $1 million non-trucking liability coverage. It does caution that this is not for hauling cargo or commerce, but “...just gets you from A to B.”
National Independent Truckers Insurance Co. (NITIC). This commercial truck insurance company offers extremely short-term policies of one, two, three and five days. However, the liability limits are just $60,000.

An independent agent or broker can help you find an insurer that fits your needs. You can also reach out to companies that sell standard-length commercial auto policies.

How much is temporary business car insurance?

The cost of a short-term business car insurance policy depends on several factors, among them:

Coverage amount. The more coverage you purchase and the higher the limits, the more expensive your premiums will be.
Vehicles and drivers. The number and type of vehicles insured and the number of employees covered will also help determine cost. As with personal auto coverage, the more expensive the vehicle is to repair or replace, the higher your rate is likely to be.
Use. Both the type of work the vehicle is used for and the frequency of use will factor into the cost. Industries that have higher risk, such as commercial trucking, will pay more for coverage than those in a low-risk industry like consulting.

Other variables may include your employees' driving records, policy deductible, business location, and credit score.

NITIC, which specializes in providing truck insurance policies to independent owner-operators and small fleets, lists the following coverage prices on its website:

24 hours: $140
48 hours: $240
72 hours: $340
Five days: $540

How to buy temporary business car insurance?

You can purchase temporary business car insurance through a variety of sources.

Captive agent. These are insurance agents who work for one insurance company. They will have a lot of knowledge about the different coverage types and discounts available, but only for the carrier they represent.
Independent agents. Independent agents work with multiple insurance companies. This allows them to compare quotes from a number of carriers and help you find a policy that suits your business needs.
Brokers. Insurance brokers represent their clients and not insurance companies. Like an independent agent, they’ll be able to help you navigate different companies, coverages and quotes. However, unlike an agent, they can’t sell you the policy directly and will need to hand it off to an insurance agent to complete the purchase.
Online: Both Classic Truck Insurance and NITIC offer quotes online.

How to get short-term commercial car insurance?

Once you know where you’re getting your policy from, you’ll have to complete an application before you can purchase a policy. This will mean providing the insurance company with the information it needs to determine the level of risk involved, including:

Company information. For example, how many employees will need to be covered and what condition are their driving records in? Also, is your business located in a dense urban area or in a small suburban enclave?
Vehicle information. This could include the license plate, VIN, types of vehicles and their age and any vehicle modifications.
Length of coverage. Do you need insurance for just a day or for several weeks?
Vehicle use. Are you planning to haul heavy equipment to a construction site, for instance, or just using the vehicle to visit clients at their office?

Your agent or broker can guide you through this process.

What our expert says

Q: What should small businesses know about short-term auto insurance?

Alex Stalvey Managing partner, Bannister, Wyatt & Stalvey.

"It’s possible that temporary commercial auto insurance will have gaps in liability coverage and be less comprehensive than a traditional policy."

Frequently asked questions

Can you get temporary business car insurance?

Yes, you can get temporary (or short-term) commercial car insurance. However, not all insurance companies offer this type of coverage. Working with an independent insurance agent or broker can make finding appropriate coverage easier than doing it by yourself.

Can you purchase weekly or monthly commercial auto insurance?

You can purchase policies that will last as little as a day or as long as several months. If you need to purchase a short-term policy repeatedly, you may want to discuss with your agent or broker if a standard-length policy may better suit your needs.

Is temporary business car insurance right for you?

Whether or not temporary business car insurance is right for your business will depend on several factors, including the length of time you need to be insured and the type of coverage you need.

Remember, these policies may not cover everything that a more standard length policy would. Businesses should be aware of any potential limitations, such as restrictions on certain types of coverage.

Working with a trusted business advisor, insurance agent, or broker can help you understand this. They can review your needs and state requirements to help you understand when a temporary business car insurance policy may be the right choice for you.