Short Term Car Insurance

When we think of insurance, we usually believe it is a long-term commitment. You probably think insurance has to be bought for at least one year, three years or sometimes up to five years. The fact is, it isn't as rigid as it seems. There is also the option of short-term car insurance. The tenure for this type of insurance can vary from a few seconds to a few months. If you are someone who has their four-wheeler only for a short time period (less than a year), you can opt for this insurance. Though short-term insurance is rare in India, it is famous in many foreign countries. Short-term car insurance gives vehicle owners flexible coverage without needing a long-term commitment from the insurance company.

How does Short Term Car Insurance work?

When a person drives a car for a fixed time frame, such as relocation, learning to drive, car rental, etc, there is no need for insurance that spans one year. In such a situation, temporary insurance is the perfect choice. This insurance can be bought even for a few hours. Very minimal requirements are there in terms of documents to buy this insurance. You will be asked for:

  • Name and identification proofs
  • Your profession, gender, address
  • Details of your car, such as engine capacity, make and model, seating capacity and fuel type.

Types of Short Term Car Insurance

Here are the different types of temporary or short term insurance for your car:

  • Rental Car Insurance: 

Within this insurance category, you receive coverage for a rented vehicle for the duration of your rental period. Primarily, this insurance provides protection against damages resulting from accidents, injuries, and related incidents.

  • Gap Insurance:

This insurance applies to vehicles acquired through leasing or through loans, where a third party provides the financing. Gap insurance coverage comes into play when there is a total loss, meaning the vehicle is damaged beyond repair. In such cases, the insurance company will compensate the car's market value. If the outstanding loan amount exceeds the market value or the Insured Declared Value, Gap insurance will step in to cover the remaining balance, effectively settling the loan for the policyholder.

  • Non-owners insurance:

Non-owner insurance shares similarities with rental car insurance, but it's typically meant for privately owned vehicles. For instance, someone would generally purchase non-owner insurance when borrowing a car from a friend or family member.

Advantages of Buying Short-Term Car Insurance

Some of the advantages of purchasing short term insurance during the time you have a four-wheeler are: 

  • Immediate Coverage
  • Protection against third-party injuries and property damage
  • Peace of mind and security
  • Insurance for personal injuries to the driver.
  • Highly customisable coverage during the insurance period.
  • Option to purchase the policy up to 30 days before it begins.
  • Protection from Accidental Damage

When Should You Buy a Short-Term Insurance Policy?

Depending upon the requirement, a policyholder can purchase short term insurance for 1,3 or 9 months. Some of the situations where one can consider buying short term insurance are:

  • When you have rented a car.
  • When you're in the process of learning to drive a car.
  • When operating a privately borrowed vehicle from a friend or family member.
  • When you're using a car for business or travel in a different state.
  • When you plan to sell a recently purchased car shortly.
  • For drivers with limited experience behind the wheel.
  • When your own car is not usable.
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