The Secret to Finding Short-Term Car Insurance

Insurance companies don’t seem to realize that not everybody wants or needs to insure a car for a year or more. Maybe you’ll be away at college most of the year and only need car insurance part of the year. Or you’re driving an elderly person around in their car and need to be insured only as long as you’ll be volunteering. Or you live in Florida during the winter and only drive your car half the year.

Search for the Cheapest Car Insurance First

You don’t need to start out looking for short-term car insurance specifically. Get several car insurance quotes for regular one-year policies. You can use one of the many online search engines that compare car insurance quotes from several companies to find the cheapest policies, or talk to your local insurance agent. Select the coverage you want or are required by law to have, such as collision, comprehensive or uninsured motorists.

Now Here’s the Secret

Pick a few of the cheapest companies, call them and ask what you’ll be charged for “short rate cancellation.” What you’ll do is buy car insurance for a year, then cancel it whenever you don’t need it. Companies charge a small addition fee for early cancellation, but it’s still cheaper than buying insurance for a whole year when you only need short-term car insurance.

The short rate cancellation fees are regulated by your state, but they may be around ten percent of the policy that’s remaining. In other words, if you keep your car insurance for four months and then cancel it, the company won’t charge you for the remaining eight months, but they’ll charge a short term cancellation fee equal to ten percent of the remaining eight months. You can contact the insurance regulators of your state (see contact info here)  to find out what the maximum short rate cancellation fee will be in your state and what the regulations are for cancelling car insurance early.

Pay Monthly and Cancel Carefully

If you’ve found a cheap car insurance policy with an acceptable early cancellation fee, sign up for it and request to pay monthly. Make sure you understand exactly what you need to do to cancel the policy, so they won’t continue to charge you once you’ve cancelled. A phone call might not do, if you need to notify them in writing, and be sure to find out what address to send the notification to. A mix-up or delay might cost an extra month’s premium that you wouldn’t need to pay otherwise.

Remember the short-rate cancellation fee, though. You might receive a small bill for that at the end.

Still, it’s cheaper than buying insurance for the rest of the year when you didn’t need it, and you got the short-term car insurance you wanted, even from a company that doesn’t sell short-term car insurance.