What does short term car insurance mean exactly? As with a lot of insurance terms the phrase is a little ambiguous. If you’re looking for short term car insurance the odds are that you’re after one of two types of policy; temporary insurance to cover a car for just a few days, or a standard policy which you can pay month by month with no annual contract.
The multiple meanings of short term car insurance can be a problem when searching for the appropriate type of cover to suit your needs. For example some insurers may class temporary car insurance as 28 days of cover. If you only need one day car insurance then this type of policy will end up costing you more than necessary so its important to know exactly what type of cover you need when getting a quote.
Temporary car insurance is usually defined as short term cover from a single day up to 28 days. There are a number of different scenarios in which you might find yourself in need of this kind of insurance. Typical situations include; insuring others to drive your car (or you to drive theirs), buying a car and needing immediate cover, test driving a car you are buying privately or driving another vehicle whilst your own is being repaired.
If you already have an existing car insurance policy then its always worth giving your insurer a ring to see what they can do for you, although it might not necessarily be the cheapest option. There are a couple of things to bear in mind however which lead many people to take out short term car insurance separately from their main policy.
The most important thing to be aware of is your no claims discount (NCD). By insuring yourself on another car, or somebody else to drive your car on your main policy, even on a temporary basis, you are increasing the risk of losing your discount should a claim arise. By taking out short term car insurance on a different policy your NCD remains safe. The flip side is that your NCD will not be taken into account on the premium of your temporary cover, but since it will only be lasting up to 28 days at the most the additional cost will be fairly negligible.
Even if you are the organised type, one day car insurance by its very nature is something that you will often need unexpectedly and have to arrange at short notice. More often than not this means the idea of shopping around for the best quote goes out the window and convenience becomes the primary factor rather than cost.
The rules that apply to taking out short term cover also apply to one day car insurance. Your existing insurer may be able to arrange cover on your main policy but this leaves your NCD exposed to additional risk. Some insurers will also only allow cover for a minimum period (such as one week or even 28 days) which can prove extremely costly if you just need to be insured for a single day.
Luckily the internet comes to the rescue (as usual). Over the past few years a host of specialist brokers have cropped up online who focus entirely on short term car insurance. Although you might not have heard of most of them they use major insurance companies to underwrite their policies so you can rest assured that you have a decent level of cover.
Beyond that there are two things to bear in mind with these types of policies; your no claims discount is not taken into account (you can’t have NCD running concurrently on two policies – and most people who need temporary car insurance usually have a main insurance policy already) and the compulsory excess is generally quite a bit higher than on a standard car insurance policy, usually they have a minimum excess of around £250.
For most people car insurance is simple – they drive the same car day in, day out on a regular basis. As such the vast majority of car insurance policies are annually based (even though many people pay monthly installments they are almost always a 12 month term). If you need a bit more flexibility in your car insurance however, then this type of policy is no good. Perhaps you change cars frequently or only drive a car at certain times of the year.
If this is the situation that you are in then a Pay As You Go (PAYG) car insurance policy, which usually consists of monthly payments with no fixed term contract, might be exactly the type of car insurance policy for you. Things work slightly differently than a standard annual policy but importantly you can still earn a no claims discount and most insurers will guarantee that your premium will not jump up month after month so you can rest assured that you won’t get stung financially.
Policy terms differ from insurer to insurer so be careful to check the details when getting a quote, but they generally work like this; you’ll get a quote just like a standard insurance policy but with a monthly instead of annual premium. The policy goes month to month so you can cancel the car insurance at the end of each month with no cancellation fee to worry about. The monthly quote you are offered is guaranteed to remain the same for a fixed term – usually at least six months. You’ll earn one years NCD if you have interrupted cover for a fixed amount of time – typically in the region of eight or nine months.
You might want this type of car insurance policy because you drive a number of different cars at various times. Most PAYG policies also offer a multi-car policy which offers you the additional flexibility you need to drive numerous cars without paying an expensive and unnecessary annual premium.