Short-Term Car Insurance Explained

Short-term car insurance can mean coverage for a rental car. It can mean temporary insurance while you transport a recently purchased vehicle. It can even mean a policy that only lasts six months – instead of a traditional insurance policy that lasts one year. Short-term insurance policies are useful for people that want to drive a friend’s car, borrow a family member’s car, or test drive a vehicle that they are interested in purchasing.

This article will discuss the different coverage options that are available to Canadians. It should be able to help you decide which insurance is best for you.

Car Insurance for a Car Rental

Joanne Will from The Globe and Mail recently answered the question, do I really need car rental insurance?

The article is a good primer on the world of rental car insurance. Will recommends that you do your homework before showing up at the rental office. You may be triple-covered if you buy insurance from the rental company and you already have some form of short-term insurance through your credit cards and the comprehensive policy on your car at home. The insurance sold at car rental agencies is not cheap so check with your credit card company and your insurance agent to see if you’re already covered. If you don’t have any coverage then you should think about getting the coverage from the rental agency. There might be cheaper options though. Try your local insurance agent first and then see if upgrading to a new credit car might save you money on future rentals. If you’re not covered by a comprehensive policy then an even better option is to buy a standalone insurance policy when renting a car.

The Globe and Mail article warns you to be cautious before saying yes to any extra insurance. You might end up paying a lot for inadequate insurance. Relying on a credit card for auto insurance might be dangerous too. Click here to read more from the Ask Joanne column.

Temporary Insurance for Transporting a Car

In British Columbia, you can purchase a Temporary Operation Permit (TOP). This is an insurance policy that protects your vehicle for up to 15 days. Most provinces have similar options to the TOP. These policies allow you to buy insurance for a vehicle that you are transporting or to insure a vehicle that you want to take out for a test drive. You can also take your vehicle to a licensing office or a garage if it needs to be repaired. Mechanics, vehicle restoration specialists, and car swappers are all very familiar with these temporary policies. In Ontario, these policies are known as Temporary Vehicle Registration and are issued for a period of up to 10 days. To learn more visit the MTO website.

Companies That Can Help

BMO Insurance – BMO has a car rental coverage that protects against damage to a non-owned vehicle. These policies are typically more affordable than buying insurance from the rental company. In fact, the insurance you pay for this added coverage from BMO will likely be equivalent to the amount you would pay in insurance for a one or two day car rental. If you’re certain that you won’t be renting a car then it’s probably better to avoid these additional coverages. If there is a chance you might rent a car then it is worth your money. Before purchasing this added coverage make sure you check to see if your credit card provides you with rental car insurance.

ICBC – You can get a Temporary Operation Permit from one of the 900 Autoplan insurance brokers located in the province of British Columbia. To find a location near you visit the Autoplan website.

Aviva – We’re not sure if Aviva Canada has short-term coverage. Their website in the United Kingdom offers a temporary car insurance product. These policies are available from 1 to 28 days and come with a variety of additional options including a comprehensive coverage when driving in Europe. You will have to check with Aviva to see what type of coverage they have in this country. Their toll free telephone number is 1-800-387-4518.