Temporary (Short-term) Car Insurance: All You Need to Know!

The topic of insurance brings to mind either a long term commitment that covers you with a financial backup in case of an unfortunate event. Vehicle insurance is not as rigid as perceived by many. It is pretty dynamic in nature. The policyholder can customise a plan to an extent, choose a preferred insurance company, or select a type of insurance that is most suitable to the needs. The best example of this is temporary (short-term) car insurance. It provides highly flexible coverage that financially protects the policyholder against various contingencies.

This article has detailed information about temporary (short-term) car insurance. Read on to know more:

Temporary car insurance provides insurance coverage for a short time. Since this is temporary in nature, the validity of short term car insurance can be as less as a few minutes or as long as a couple of months. In a particular situation when a person is not looking to buy a new car insurance plan for a duration of one year, he/she can choose a short term or temporary cover insurance. 

At ACKO, we do not offer a Temporary Car Insurance policy.

Usually, the insurance coverage offered in India is limited to two major types of policies – third party car insurance policy and Comprehensive car insurance policy. The tenure of a normal car insurance policy is one year. If one chooses to buy a Comprehensive insurance policy then they can buy more coverage with add-ons and avail other benefits. On the other hand, buying at least a third-party policy is mandatory by law and provides minimum possible coverage to the owner of the insured vehicle. 

Temporary car insurance would come into the picture when a person’s need to drive a car is limited by a fixed time-frame or a solid exit criteria. For example, relocation, learning to drive, renting a car, etc. Here a person does not need car insurance coverage for 12 months. The requirement could range from a few hours to maybe a month or two. Buying temporary car insurance makes maximum sense in this situation.

Temporary car insurance is rare in India but very popular in foreign countries. One can search for an insurance company that offers short-term insurance and enquire about the coverage and other terms of the policy. Usually, the following information is required while buying a temporary car insurance policy:

Temporary car insurance coverage is not as exhaustive when compared to a full-fledged car insurance policy available in India. In a Comprehensive policy, the policyholder is protected against the theft of the car, damages to the insured car, cost of third-party liabilities, damages due to fire or calamities, etc. However, the scope of temporary car insurance is very limited. It may be available in the following types.

1. Gap Insurance

This insurance is for cars that are bought on a lease or loan. It requires the car to be financed by a third-party. The coverage Gap insurance offers, gets activated in case of total loss i.e. damage beyond repair. Here the insurance company will compensate the market value of the car. If the loan amount is more than the market value or Insured Declared Value, then the Gap insurance will pay the balance amount to close the loan on the policyholder.

2. Rental Car Insurance

The type of car insurance policy that covers a rental car is called Rental Car Insurance. Usually, accidental damage, injuries, etc. are covered under rental insurance.

3. Non-owners Insurance

Non-owners Insurance is similar to rental car insurance, however, it is mostly offered to private cars. For example, a person will most likely buy non-owners insurance when borrowing a car from a friend or a relative.

The policyholder can choose to buy a 1-month, 6-month car insurance, or 9-month car insurance policy depending upon the requirement. In this type of policy, the policyholder would usually pay less cost of insurance per month as compared to a policy with a longer duration.

Short-term plans provide coverage against multiple liabilities like accidental damage, calamities, the personal accident of the driver, etc. and financial protection against damage arising out of natural disaster and man-made calamities. Opting a short-term policy over a full car insurance policy can be done in certain special situations. The following is a list of such situations:

To buy a Temporary Car Insurance policy, you will need the following documents:

The cost of a short-term car insurance policy depends on factors like:

In the table below, let’s take a look at the differences between a long-term and short-term car insurance policy:

ACKO is one of the fastest-growing digital-first insurance companies in today’s market. The company provides exceptional customer service when it comes to the purchase of the policy and claims. Here are the reasons why one should consider buying car insurance from ACKO:

1. Best Price

ACKO offers the best prices when it comes to car insurance, the company can afford to offer the best prices due to the elimination of commission agents or middle-men. The commissions are directly passed on to the customers as discounts.

2. Quick Claim Settlement

ACKO is one of the few insurance companies that offer instant claim settlements for the repair of minor damages. The services are available in major cities and may depend upon the policyholder’s claim history.

3. Value-Added Services

ACKO offers free pick up and drop-off service for cars damaged in select cities. This reduces the cost of towing the vehicle to a garage after an accident. Register your claims through our website or mobile app for a quicker turnaround time. The above features and a dedicated customer support team make Acko the best car insurance solution for customers.