What is Short-Term Car Insurance?
Short term car insurance is a type of car insurance policy available for a limited duration. Most motor insurance providers offer a vehicle insurance policy for a tenure of one year, three years or sometimes five years. However, car insurance revolves around a time duration of as low as one day, or 1 month car insurance plan, which can extend for up to 3 months as well.
A 1 month car insurance plan is a flexible option to secure your car temporarily without any long term commitment. So, if you are not willing to buy a four-wheeler insurance plan for an entire year, you can opt for short-term car insurance coverage. Although this temporary car insurance is rare in India, it is very popular in foreign countries.
How Does Short Term Car Insurance Work?
A short term car insurance policy became necessary when insurance requirements 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, driving for a short distance, and learning to drive are some cases wherein you can purchase temporary car insurance.
In all these examples, you do not need car insurance for 12 months. This implies that your requirement for vehicle insurance can range from a few hours to some months. Therefore, buying a one month or 3 month car insurance plan can help.
Coverage Under Short Term Car Insurance
Short term car insurance offers the same coverage as a comprehensive motor insurance plan. Here are its inclusions:
- Third-Party Liabilities: A temporary car insurance policy covers damages or losses to other individuals caused by your insured car. This includes their injury, death, or property damages.
- Own Damages: Short term car insurance also covers damages to the insured car in case of an accident/collision, theft, vandalism, fire, etc.
- Personal Accident (PA) Cover: Short term or 1 month car insurance financially compensates for injuries sustained by the owner-driver or passengers in a road accident.
Types of Short Term Car Insurance
The coverage of a short term car insurance policy is not as exhaustive as compared to comprehensive car insurance. The following are the different types of short-term car insurance:
- Rental Car Insurance: This is a 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: Another type of short term car insurance is gap insurance, which is for cars that you have bought on loan or lease. Under gap insurance, the car should be financed by a third party, and the insurance provider compensates the market value of the vehicle. This type of short term car insurance is not offered in India but is common in other countries.
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-owner Insurance: It is the same as rental car insurance but offered for private cars only. For instance, one can buy non-owner insurance for a vehicle that he/she is borrowing from a relative or friend.
- Pay As You Drive Insurance: Pay as you drive insurance is an innovative insurance solution that lets you buy motor insurance only for the number of kilometres your car is driven. Moreover, this plan also rewards a policyholder if he/she drives his/her vehicle within the chosen kilometre limit. Thus, if you are an occasional driver and wish to save up on your own damage premium, the pay as you drive policy can be the right choice for you.
Benefits of Short Term Car Insurance Coverage
When you buy short-term car insurance, you get the following benefits:
- Instant activation (in most cases)
- Gives the option to buy a policy for a minimum of 30 days before its start date (one month car insurance)
- The coverage duration can be customised through add-ons in car insurance
- Gives you peace of mind while driving
Difference Between Short Term and Long Term Car Insurance
Have a look at the table below to understand the key differences between short term car insurance and a long-term policy:
| Policy Features |
Short Term Car Insurance |
Long-Term Car Insurance |
| Coverage Duration |
1 day - 6 months |
1 - 3 years |
| Premium Payment |
Higher amount per month, paid for a short duration |
Lower monthly premium due to long-term commitment |
| Flexibility |
More flexible, suitable for temporary needs |
Less flexible but provides continuous coverage |
| Renewal Requirement |
Frequent |
Fewer |
| Cost-Effectiveness |
Expensive for prolonged use |
Highly cost-effective in the long run |
| Who Should Opt |
Infrequent drivers, rental cars, short trips |
Regular car owners who need uninterrupted coverage |
| Discounts & Benefits |
Fewer discounts and perks |
Often includes discounts for long-term policies |
| Policy Cancellation |
Easier and without high penalties |
Involves penalties/refund adjustments |
Who Should Opt for Short Term Car Insurance?
A 1 month or 3 month car insurance plan is ideal:
- 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 vehicle 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 or driven for less kilometres
Eligibility Criteria for Short Term Car Insurance
To buy short term car insurance, you must:
- Be at least 18 years of age
- Hold a valid driving licence
- Have a valid vehicle registration certificate (RC) for the vehicle you wish to insure
How to Get Car Insurance for 1 Month?
You can buy 1 month car insurance by following this hassle-free process:
- Visit Policybazaar.com and select 'Car Insurance' from the homepage.
- Provide your car details, such as registration number, make & model, variant, etc., and proceed further.
- Now, enter your name & contact number to view different car insurance quotes.
- From the list, select your desired policy, whether 1 month car insurance or a 3 or 6 month insurance policy.
- Choose the necessary add-ons and proceed towards policy payment.
- Pay the policy premium via the preferred mode.
- Upon successful payment, you will receive your short term car insurance policy in your email.
Documents Required to Buy Short Term Car Insurance
To opt for temporary car insurance, you need to provide the following information:
- Your personal details, such as name, profession, gender, etc.
- Your identification documents, such as your address proof, claim history, driving licence, etc.
- Your vehicle details, such as the make & model, fuel type, engine/battery capacity, etc.
