You might be interested in purchasing short-term car insurance for several reasons. Drivers often seek short-term auto coverage when they rent a car, are planning to sell, or own a vehicle that they only use seasonally. Let’s discuss your short-term car insurance options and how you can secure the best coverage for your vehicle, depending on your policy needs. 

What are my short-term car insurance options?

A standard Canadian auto insurance policy lasts for one year. So, short-term or temporary coverage is any policy that covers your vehicle for fewer than 12 months. Depending on your needs and insurance provider, you may have these options for purchasing a short-term auto insurance policy:

  • Car insurance that comes with some credit cards
  • Rental car auto insurance 
  • Non-standard short-term insurance policies offered by insurance companies

How Much Does Short-Term Car Insurance Cost?

The same factors that affect the cost of standard-length coverage also affect what you’ll pay for short-term car insurance. This includes:

  • The make, model and age of your vehicle
  • Your age and driving record 
  • The age and driving history of other drivers on your policy 
  • Your address
  • How much you drive
  • Whether you drive for work or strictly for leisure activities

Short-term car insurance may cost less than a standard year-long policy since you have protection for a shorter period. However, short-term insurance may also be cheaper because it offers less robust protection for third-party liability coverage or no comprehensive and collision protection. Therefore, it’s essential to confirm you have the coverage you need regardless of your policy’s term length. 

What does short-term car insurance cover? 

What short-term insurance policies cover depends on your insurance provider and the mandatory insurance requirements in your province. For example, to legally drive in Ontario, you must have the following coverage: 

  • Third-party liability coverage: Helps pay for damages and legal fees resulting from an at-fault accident. 
  • Direct compensation property damage coverage: Covers vehicle damage for not-at-fault accidents with other drivers if they have Ontario insurance coverage. 
  • Statutory accident benefits: This coverage provides money for various forms of medical care and services and limited income replacement if someone in the vehicle was injured in an accident. 
  • Uninsured vehicle coverage: Helps cover damages if a driver experiences a hit-and-run collision or an accident with an uninsured motorist. 

Learn more about mandatory and optional vehicle insurance, including collision, comprehensive and non-owned auto coverage. 

Rental car and credit card insurance may also include:

  • Personal accident coverage provides financial compensation for injuries or death benefits after an accident. 
  • Personal effects coverage covers damaged or stolen belongings in your rental car. 
  • A loss damage waiver or collision damage waiver covers loss, damage or theft of the vehicle. 

Limits and deductibles for these coverages will vary, so check your rental or credit card company’s insurance contract to ensure you have enough protection. 

Do I need rental agency car insurance if I have another auto insurance provider? 

Rental car insurance is optional if you have adequate coverage from another source. You may also have coverage through your credit card if you rent a car with your credit card provider. 

You should consult with your insurer to make sure you have coverage for a rental vehicle. If you rent cars often, you can purchase a non-owned auto endorsement to transfer your insurance policy to all vehicles you rent. Non-owned auto endorsements tend to be more affordable than purchasing rental insurance every time you rent a car. 

What happens if I cancel my insurance early?

If you cancel your insurance policy early, you will likely have to pay a fee to cover the administrative cost of cancelling your coverage. Usually, the earlier you cancel your policy, the higher the percentage of your premium the insurer will keep. This is because insurers calculate a “short-rate” based on the days left on your policy which ranges between 10-30% of your premium. After your insurer calculates your short rate, they will subtract it from the premium you paid for your policy and refund you the difference. 

Learn more about auto insurance cancellation fees

Can I get short-term insurance for a new vehicle? 

If you currently have auto insurance, you may be in luck. It’s common for insurers to offer 7-14 days of automatic coverage if their customers purchase a new vehicle. 

Check with your insurance company to ensure you have this automatic coverage before you drive off the lot with your new ride. You should also update your policy to match the coverage needs of your new vehicle as soon as possible. 

I don’t drive my vehicle in the winter. What are my seasonal insurance options? 

You could buy short-term insurance coverage for your vehicle every spring. However, you’ll probably pay more for insurance in the long run because you could miss out on loyalty and continuous coverage discounts. In addition, if you lease or finance a vehicle, you are legally required to maintain a valid insurance policy. Learn more about the restrictions associated with keeping a car without insurance

Insurance experts typically recommend purchasing a standard 12-month insurance policy even if you only drive your vehicle part of the year. The good news is your insurance provider can adjust your rate and coverage for seasonal vehicles. In addition, the fact that you only use your car during months with more favourable driving conditions will help lower your policy premium. You can also remove certain coverages or increase your insurance deductible while you’re not driving your vehicle to save money. 

For example, you could ask your insurer to remove collision and upset coverage during the winter because you don’t need extra protection for at-fault accidents. Insurers do not factor in short term use at the onset of insurance purchase, so the rates would be based on full year, full use coverage until the time a client calls to remove coverage. 

It’s also wise to keep comprehensive coverage even when you’re not driving your vehicle to protect it from damage such as theft, fire and vandalism. 

If you have a car you drive seasonally, and a vehicle you use year-round, bundling both on the same insurance policy can also help you save on coverage. Some Canadian insurance companies like Aviva, Travelers and Pembridge also offer telematics programs. Telematics policies track your driving habits with a mobile app, so you can save on insurance that way. 

What about seasonal motorcycle insurance?

Do you only drive your vehicle seasonally because it’s a motorcycle? In that case, you can also get continuous coverage that factors in when your ride is out of commission for the season and safely stored in your garage. 

Coverage for seasonal vehicles such as motorcycles and snowmobiles are calculated annually, and it’s taken into consideration that the vehicle will only be used seasonally. So, if you were to call and remove coverage from a motorcycle in the winter, there would be no reduction in premium. Learn more about how to get the best motorcycle insurance for your needs. 

Talk to Your Insurance Broker About Short-term Coverage

While short-term insurance solutions exist if you need coverage for a few months, weeks, or days, a standard year-long insurance policy is often the most affordable option. Talking to an insurance broker about how you can customize your coverage for every vehicle you own or rent is the best way to save on a high-quality insurance policy. 

Get your quote today!