Temporary Car Insurance

Do you need temporary car insurance? Read on to learn more.

What is temporary car insurance?

Temporary car insurance is exactly what you think it is: short-term coverage that gives drivers an insurance policy for a short period of time. Policy lengths range from just a few weeks, up to six months.

Traditional auto insurance policies provide coverage for a 12-month period, but there are some circumstances where a driver may need a shorter policy.

Two common reasons are:

  • Tourists or returning citizens arriving in Canada sometimes prefer to purchase a car as it can be more cost effective than using a rental. Visitors staying for several months can seek short-term car insurance for the duration of their stay.
  • Situations where car ownership is being transferred and a short-term licence plate is being used. Many temporary insurance plans will match the duration of the short-term licence plate while the full plate is being registered.

Where can I buy temporary car insurance?

Where can I buy temporary car insurance?

Temporary insurance is available in most Canadian provinces. You can check with the Facility Association to see which companies offer it.

However, you will not find temporary insurance in Ontario. Ontario has among the most stringent driver and insurance regulations in Canada and there are no companies able to provide temporary car insurance coverage.

Some Ontario providers do offer six-month coverage, but they are few and far between. In theory, you could opt for a 12-month policy and then cancel it before the end of the agreement, but the cancellation fees are costly.

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Do I need temporary car insurance if I am renting a car?

Do I need temporary car insurance if I am renting a car?

If you have a personal car insurance policy, you may already be covered. Credit cards often provide rental car insurance to their customers. For these reasons, many drivers opt out of the insurance offered at the rental counter.

But what if you don’t have a personal insurance policy, or insurance through your credit card? If this is the case, it is important you do pay for coverage through the rental company. At a minimum, your rental car needs coverage for damage, theft and liability – otherwise you are taking on a huge financial risk.

This insurance is different from personal temporary car insurance, as you are just leasing insurance from the rental company’s group policy, rather than taking out your own.

The same rules apply when you are renting a moving truck, or even test-driving a new car.

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