Finding Flexible Auto Insurance: Month-To-Month Policies

If you're looking for month-to-month auto insurance, you might be disappointed to learn that most companies don't offer this option. However, you can still get the coverage you need through temporary insurance. Temporary car insurance is typically defined as a policy lasting less than the standard six months. While major car insurance companies don't usually offer short-term coverage, you may be able to find it through a smaller company or by purchasing a standard policy and cancelling it early.

Temporary car insurance: when and why you might need it

Temporary car insurance is a policy in effect for less than the standard six months and can be useful in situations where you need coverage for a short period. While most major car insurance companies don't offer short-term policies, you can still get temporary coverage in several ways. Here are some scenarios where temporary car insurance might be useful:

Temporary Coverage for Student Drivers

If your child is a student who doesn't need a car for long periods, such as when they are away at school, you might consider getting them temporary coverage for when they are home. However, other options include adding them to your own policy during breaks or taking advantage of "student away" discounts offered by many insurers.

Someone Temporarily Uses Your Car

If a friend, roommate, or babysitter needs to borrow your car for a day or regularly, they might consider getting a short-term policy. However, most car insurance policies already provide coverage for permissive users, or those driving with your permission. If someone will be driving your car frequently, you can simply add them to your policy.

Temporary Car Insurance for Rental Cars

Your existing car insurance policy may already cover rental cars. However, if it doesn't, you can purchase short-term rental car insurance from the rental company or a third party. Credit cards may also offer rental car protection when used to reserve and pay for the rental.

Short-Term International Car Insurance

If you plan to drive in another country, you may need international short-term car insurance. Some insurers extend coverage to Canada, but this usually isn't the case for Mexico or other countries. You can purchase short-term international coverage through a specialty company or a car rental agency.

Placing a Car in Storage

If you plan to store your car for an extended period, you may not need insurance as long as it isn't driven. However, you may need to cancel your registration and turn in your plates. Comprehensive-only coverage can protect your stored car from theft, fire, or severe weather damage at a lower cost than full coverage.

Other Scenarios

There are other situations where temporary car insurance might be useful:

• When taking your driving test
• When buying a new car
• When starting work as a rideshare driver
• During military deployments

How to Get Temporary Car Insurance

While short-term car insurance policies are not widely available, you can still get temporary coverage in several ways:

• Buy a standard policy and cancel early: Most car insurance policies last six or twelve months, and you can generally cancel at any time. You'll be refunded for the remaining months, but watch out for cancellation fees.
• Rely on another person's insurance: If you have permission to drive someone else's car and are not using it for business purposes, you are likely already covered by their insurance policy.
• Get on someone else's policy: If you live with someone or regularly drive their car, you should be added to their policy.
• Buy non-owner car insurance: If you don't own a car but frequently borrow or rent, non-owner car insurance can provide coverage for your state's minimum requirements.
• Buy rental car insurance: If you don't own a car but occasionally rent, you can purchase additional coverage through the rental company or a standalone rental car insurance policy.

How to get temporary car insurance

Temporary car insurance is typically not offered by major insurance companies, who instead require six- or 12-month commitments. However, there are several ways to get short-term car insurance. Here are some options:

• Rely on another person's insurance: If you're using someone else's car with their permission and you have a valid driver's license, you're likely already covered by their insurance policy. However, this usually only applies if you're not driving their car regularly or for business purposes.
• Get on someone else's policy: If you regularly drive someone else's car, you can be added to their policy. This option is required by most car insurance companies and can be more affordable than purchasing your own policy.
• Buy a standard policy and cancel it early: You can purchase a standard six- or 12-month policy and cancel it early if you no longer need it. Just be aware that some companies may charge a cancellation fee.
• Buy non-owner car insurance: Non-owner car insurance is designed for people who don't own a car but frequently borrow or rent cars. It typically includes your state's minimum insurance requirements and can be more affordable than standard insurance.
• Buy rental car insurance: If you're renting a car, you can purchase additional insurance from the rental company, which often includes liability insurance and a loss damage waiver. This option can be more expensive but provides extra protection in case of an accident.

It's important to note that temporary car insurance may not be available for periods of less than 30 days, and it may be challenging to find a reputable company offering such policies. Additionally, temporary car insurance costs can be high due to less competition and the risk involved for insurers.

The best companies for short-term car insurance

When it comes to short-term car insurance, most major insurance companies won't offer policies shorter than six months. However, you can turn a traditional car insurance policy into a temporary one by cancelling it early, although you may incur cancellation fees. Here are some of the best companies for short-term car insurance:

Allstate

Allstate offers six-month policies and doesn't charge a fee for cancelling. They also have a multitude of discounts available to help you save money.

GEICO

It's easy to cancel a policy at GEICO. Simply call customer service and say "cancel insurance policy" and then "auto" at the prompts. They have competitive rates and don't charge cancellation fees. Cancellation is effective immediately.

Nationwide

Nationwide will let you cancel your policy and then give you a prorated refund. They have a variety of discounts available. The fastest way to cancel is to call an agent.

State Farm

State Farm has multiple discounts for safe drivers and does not charge cancellation fees. They offer prorated refunds if you do cancel, and cancellations by phone are typically effective immediately.

Dairyland

Dairyland offers one-month auto insurance policies, but only as renewal policies.

Hugo

Hugo is an on-demand car insurance company that offers different insurance plans, including a flex plan that allows you to buy insurance for as little as three days and add more days as needed.

Sixt

Sixt is a rental car company that offers long-term rentals at discounted rates. They also offer a unique car rental subscription service called Sixt+, which allows you to pay a monthly rate for a vehicle.

Thrifty and Hertz

Thrifty and Hertz offer some of the cheapest long-term car rentals, especially at non-airport locations.

Problems with getting temporary car insurance

Temporary car insurance is not available from major insurers, and there are several problems with getting it. Firstly, it is difficult to find a legitimate company that offers temporary car insurance. Most major insurance companies require a minimum of six-month or one-year policies, and even if you find a company offering short-term insurance, the cost is often higher than a standard policy.

Another issue is that temporary car insurance may not provide sufficient coverage. Many companies offering short-term insurance only provide the state minimum coverage, which may not be enough in the event of an accident. Additionally, temporary car insurance may not be available for rental cars or international travel.

Furthermore, there is a risk of losing your down payment if you cancel your temporary car insurance policy early. You may also encounter difficulties in obtaining immediate coverage, as some companies require a waiting period before the policy takes effect.

Moreover, temporary car insurance can lead to a gap in coverage if you do not purchase another policy after the short-term policy ends. This gap can result in penalties from the state and higher insurance rates in the future.

Lastly, temporary car insurance may not be a cost-effective option, especially if you only need coverage for a short period. In such cases, it might be more advantageous to rely on the vehicle owner's insurance or rental car insurance.

Alternatives to month-to-month car insurance

While month-to-month car insurance is not offered by most major insurance companies, there are alternatives to getting a traditional car insurance policy. Here are some options to explore:

Non-Owner Car Insurance

If you don't own a car but frequently borrow or rent cars, non-owner car insurance can be a good option. This type of policy typically includes the minimum insurance requirements set by your state and can provide additional coverage if the car you're driving doesn't have sufficient insurance. It's also a solution for those who need to file an SR-22 insurance form. However, if you only drive once or twice a year, it might not be worth the extra cost, and relying on the vehicle owner's insurance or rental car insurance may be more suitable.

Standard Policy with Early Cancellation

Most car insurance policies are offered in six or 12-month increments, but you can usually cancel them early. You can buy a standard policy and cancel it before the end of the term, although some insurers may charge a cancellation fee. This option allows you to be flexible with your coverage but be mindful of potential penalties.

Rental Car Insurance

If you don't own a car and only rent one occasionally, you can rely on the rental car company's insurance. Most rental car agencies provide temporary liability insurance, but the coverage may be limited. You can purchase additional coverage through the rental company or buy a standalone rental car insurance policy for more comprehensive protection.

Permissive User Coverage

If you're borrowing someone else's car with their permission and have a valid driver's license, you're likely already covered under the car owner's insurance policy. However, this usually applies to infrequent use, and if you regularly drive their car, you may need to be added to their policy.

Pay-Per-Mile Insurance

If you don't drive often, consider a pay-per-mile insurance policy. This type of policy bases your rate on how much you drive, so it can be cost-effective if you're not using your car frequently.

Before choosing any of these alternatives, be sure to research the options available in your state and consult with an independent insurance agent to find the best solution for your specific needs.

Frequently asked questions