A Quick Walkthrough on Short Term Car Insurance Plans

Short term car insurance has been introduced to ensure that car owners do not have to undergo long term commitment to provide financial protection to their four wheelers. In India, some motor insurance providers offer monthly, temporary or short-term car insurance plans. Let us learn more about it here.

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What is Short Term Car Insurance?

Short term car insurance is a type of car insurance policy that is available for a short duration or a temporary tenure. Most motor insurance providers offer a vehicle insurance policy for a tenure of one year, three years or sometimes five years. However, the short term car insurance policy revolves around time duration of as low as a few minutes and can extend for up to a few months. 

If you are not looking to buy a four-wheeler insurance policy for an entire year and want to go for a short term option, you can select short-term car insurance. Although short-term car insurance is rare in India, it is very popular in foreign countries.

How Does Short Term Car Insurance Work?

A short-term policy, or more commonly, temporary car insurance came into the picture when the requirements of insurance became time-bound and limited. It is required when the car owner does not need insurance for a long period of time. You must have a strong reason to buy a short-term car insurance policy. Driving a rented car for some time, relocating to a new city, and learning to drive are some of the cases wherein you can purchase short-term insurance. 

In all these examples, you do not need a car policy for more than 12 months. This means that your requirement for vehicle insurance can range from a few hours to some months. Therefore, in all these cases buying a short-term car insurance policy makes complete sense.

Generally, you have to provide the following information to the insurer to buy a short term motor insurance policy:

  • Your details, such as name, profession, address, gender, etc.
  • Your identification documents, such as your claim history, driving license, etc.
  • Proof of address
  • Details of the car, such as the capacity of the engine, its make, and model, seating capacity, type of fuel, etc.

Types of Short Term Car Insurance

The coverage of a short-term car insurance policy is not as exhaustive as compared to a comprehensive car policy. Although the scope of temporary car insurance in India is very limited, it is available in the below-mentioned types:

  • Rental Car Insurance: It is a type of short-term car insurance policy wherein you can get short-term coverage for rental cars. Generally, damages due to accidents, accidental injuries, etc. are covered in a rental four-wheeler insurance policy.
  • Gap Insurance: This insurance policy is for cars that you have bought on loan or lease. Under this policy, the car should be financed by a third party and the insurance provider compensates the market value of the vehicle. The coverage offered by the gap insurance policy is activated in the situation of a total loss under which the damage is beyond repair. If the amount of the loan is more than the Insured Declared Value (IDV) or its market value, then this type of short-term insurance pays the balance amount for closing the loan on the insured.
  • Non-owners Insurance: It is the same as rental motor insurance, but it is offered for private cars only. For instance, one can buy non-owners insurance for a car that he/she is borrowing from a relative or friend.
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Benefits of Having a Short Term Car Insurance Policy

You can choose to buy a short-term car insurance policy for one month, six months, or nine months as per your requirements. In this type of car policy, you comparatively pay a lesser insurance cost every month as compared to a standard insurance policy with a longer duration. The benefits of having this type of motor insurance policy are:

  • Instant coverage
  • Third-party property damage coverage
  • Coverage against injury to third-party
  • Accidental damage
  • Provides personal accident coverage for the driver
  • Gives the option to buy a policy for a minimum of 30 days before its start date
  • The duration of coverage can be fully customized
  • Gives you peace of mind as well

When Should You Buy a Short Term Car Insurance Policy?

Temporary car insurance plans provide insurance coverage against various liabilities, such as natural disasters, accidental damages, personal accidents of the driver/owner, etc. The policy also provides coverage against financial losses that arise out of manmade calamities. 

You can opt for a short-term car policy over a full coverage motor insurance policy in some specific situations. These situations are:

  • When you are using a rented car
  • When you are learning to drive
  • When you are using a private vehicle after borrowing it from a relative or friend
  • When you want to resell your car soon after its purchase
  • When you have to use a car for short-term in some other state for travel or business or job
  • If you are a driver who has less experience in driving
  • When you own a car but it is very rarely used

Wrapping Up!

Now when you know much about a short-term four-wheeler insurance policy, you can make good use of this type of monthly car insurance policy for safeguarding your vehicle. This is the best way to avoid financial liabilities when you are using a car for a short duration. 

However, you have to keep in mind that this type of motor insurance policy is not available with all the vehicle insurance providers. You need to do thorough research to find out an insurance provider that offers short-term or temporary car insurance in India.

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