What is temporary car insurance?

Car insurance is a familiar concept to all of us: Almost every state in the union requires automobile insurance for drivers to legally operate a vehicle on public roads. Uninsured motorists, if caught, will be ticketed and fined, but more important, if they're involved in an accident they'll pay high repair costs, or even medical bills, and could potentially face financial ruin. So, insurance isn't just a requirement, it's a no-brainer. Most car insurance policies typically cover you for a year. But what if you need it for a shorter period — just a week or a month? There is a lesser-known product for that, called temporary insurance.

Temporary insurance, or as it's sometimes known, short-term insurance, is, as the name implies, coverage for much shorter periods. Most vehicle owners will never need short-term or temporary insurance, but you should be aware it's available in case you ever do.

Here are a few instances where it could be useful:

When do you need temporary insurance?

Let's say you're switching insurance providers and there's a time gap between policies. Maybe you have a family member who only needs insurance when they're home from school, or perhaps you're selling your car and want to ensure test drivers are covered. These are all common scenarios that could benefit from temporary insurance, but in some cases, your existing insurance policy may cover additional drivers or offer similar solutions. Check with your insurance agent.

Some drivers may consider temporary insurance for a car rental. While your own car insurance policy will usually cover a rental car, there are instances where it won't, such as driving in Mexico or some other foreign country. In that case, you'll want and need to purchase insurance on the rental. That's probably the most likely temporary insurance situation you'll experience.

How much does temporary car insurance cost?

In general, short-term policies cost more than standard coverage, since you're paying for the convenience and it's more difficult for insurers to turn a profit on temporary insurance. The price is just as sensitive to factors such as your driving record, the type of vehicle, where you're operating the car and even your credit score. If you're thinking of supplementing insurance for an exotic rental on Turo, the short-term quotes could make your head spin.

To compound matters, most large insurers don't offer temporary insurance policies as the risks don't outweigh profits. That means you'll likely have to find coverage from a smaller and less reputable provider, which evokes serious "buyer beware" anxiety. Pay close attention to what the policy actually covers and what might be hiding in the fine print. Diligence up front can pay huge dividends if you indeed need to file a claim.