If you're like most people, you probably think of car insurance as a long-term policy that you renew every year. But what about those times when you need to get behind the wheel for a short time? Getting a regular auto insurance policy seems like overkill. But driving without protection is unwise.

Temporary insurance (also known as short-term insurance) provides drivers with a middle ground. These policies provide vehicle coverage for a short period of time, usually 1 to 28 days.

But when, exactly, should you purchase one? In this article, we'll go over five situations that call for temporary insurance.

Test Driving a Car You Plan to Buy or Sell

If you think you'll be fine because you're just popping into the driver's seat for a quick test drive, think again. Accidents happen at the least opportune times. To have the coverage required to legally take someone's vehicle on a quick drive before deciding to buy it, a short-term policy is ideal.

A short-term policy is also beneficial when you're shopping for a new car. You need insurance to drive off the lot. If anything happens during a test drive, you could be held liable for damages (learn about The First Steps You Need to Take After Wrecking Your Car). By purchasing temporary insurance ahead of time, you can rest assured that you will be able to shop around until you've made your final decision and purchased the vehicle.

This also helps if you are purchasing a car near the end of your current vehicle's policy. A temporary policy will allow you to have a long-term policy for your new car from the start. Making amendments the middle of your current policy could result in extra charges. You can avoid these by getting a temporary policy and making the changes when it's time to renew (find out Why It's Not a Good Idea to Switch Insurance Companies Every Six Months).

Family Member Visiting from Out of Town

Getting temporary insurance can save you the expense of renting a car when a family member is visiting from out of town. Simply call your insurance company and buy a temporary policy for the duration of their stay. This will allow them to be financially covered while they drive your vehicle (but if you do decide a rental is best, see Is Rental Car Insurance Worth It?).

If your guest gets in an accident while driving your car and doesn't have this added policy, your insurance will most likely not cover the incident. It will also nullify any no claim discount you may have accrued.

Teaching Someone to Drive

Short-term insurance is beneficial when you have a teenager who is learning to drive.

An inexperienced driver is more susceptible to being involved in an incident. With a short-term policy, your no claims discount won't be affected in the event of an accident by someone who is covered under the short-term policy.

Added Coverage for a Road Trip

With lower gas prices and an improved economy, road trips are once again growing in popularity. But when you and your friends jump into your car for an exciting adventure, you want to be sure that your car is covered. You can purchase a temporary policy with another driver so they can legally drive your vehicle.

Emergency Situations

Having temporary insurance is convenient, especially since emergencies often happen suddenly and without warning. If an emergency arises that requires you to drive a car that you are not covered under, you can easily contact the insurance company and obtain coverage. This will allow you to drive the vehicle legally if any problem should arise while you are driving.

Purchasing a Temporary Car Insurance Policy

Before purchasing a temporary policy, be sure to understand the regulations that apply. This will vary between insurance companies, and will be affected by state laws. Overall, be aware that:

  • Many car insurance providers insure from age 21, although for some companies the age is 18
  • The driver must have a valid license for at least 12 months
  • The driver should have no more than six penalty points within the past three years
  • The driver should not have had any previous license revocations or disqualifications
  • The driver should not have had more than one fault claim in the last 36 months

Shopping around for temporary insurance is similar to shopping for long-term car insurance. Look for the best rates by comparing offers from multiple insurers, always being mindful that a lower rate can often mean sub-par coverage (to learn more about some of the trade-offs, see The Pros and Cons of Increasing Your Auto Deductible).

A Convenient Option

Short-term car insurance is essentially a companion policy. It will not conflict with any existing car insurance policy. As a result, any incident that occurs under the temporary policy will not affect a no-claim discount.

Another advantage to temporary insurance is that it is simple to set up. Less information is required for the added driver to be insured. You will only need the proposed driver's name, their address, and their driver’s license number. The insurer will also need to know about their driving history, details on the vehicle they plan to drive, and the effective dates of coverage needed. Once you are signed up, the policy becomes effective immediately.

Overall, temporary car insurance lets you be confident that you and the car you are driving are fully covered in the event of an incident. It's an affordable option compared to adding another driver to your full-term policy.