When we typically think of car insurance, we think of a long-term policy that lasts at least a year.
But sometimes, drivers only need coverage for a short term. This could be because you're only using a vehicle for a short period of time — perhaps seasonally — maybe you've just moved to a new province and will only be here a short while, or maybe you're looking to sell your car and so you only need a policy that lasts a few months.
No matter the reason, temporary car insurance can be a useful solution.
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.
Tips for temporary car insurance
If you’re thinking about getting temporary car insurance, or have it already, here are some tips to keep in mind:
- Never let your policy lapse, even for temporary insurance. Doing this could be considered high-risk by insurers and may make it harder for you to get regular insurance when you need it.
- Your hobby or seasonal car will require temporary car insurance too, even if you only plan on driving it a few times.
- If you store your vehicle for most of the year, you can pay for an annual policy but remove accident and liability insurance. While your car is stored, you only need comprehensive insurance for non-collision damage to cover against fire, storm damage or theft.
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.
Some Ontario car insurance providers 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.
How much does temporary car insurance cost?
Just like regular insurance, the cost of temporary insurance varies based on your driving needs, car type and driving history, among other factors.
Keep in mind that not all provinces offer temporary car insurance, so it’s best to check with your insurance company to make sure it’s available.
Can college students or young drivers get temporary car insurance?
If a student driver is home for the summer and needs insurance, or a young driver will be moving away from home soon, they can be added to their parent’s policy as an occasional driver. This saves the hassle of trying to get temporary insurance, and you won’t risk having to pay hefty cancellation fees, should your child need to be taken off the policy sooner than expected. But, if the vehicle is registered in the child’s name, they will need their own policy.
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.