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:
- What is a Temporary Car Insurance?
- How does Temporary Car Insurance Work:
- Types of Temporary Car Insurance:
- Benefits of Coverage Offered by Short Term Car Insurance Policy:
- When and Why to Buy Short Term Car Insurance Policy:
- Explore Acko Car Insurance Policy Online & its Benefits:
- Frequently Asked Questions
What is a Temporary Car Insurance?
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 car insurance plan for a duration of one year, he/she can choose a short term or temp cover insurance.
How does Temporary Car Insurance Work:
Usually, the insurance coverage offered in India is limited to two major types of policies – Third-party Liability policy and Comprehensive policy. The tenure of a normal car insurance policy is one year. If one chooses to buy a Comprehensive 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:
- Personal details like name, address, profession, gender, etc.
- Identification documents like driving license, claims history, etc.
- Address proof.
- Car details like engine capacity, make & model, fuel type, seating capacity, etc.
Types of Temporary Car Insurance:
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.
- 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.
- 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.
- 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.
Benefits of Coverage Offered by Short Term Car Insurance Policy:
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.
- Instant Coverage.
- Coverage against third-party injuries.
- Coverage for third-party property damage.
- Accidental damage.
- Personal accident cover for the driver.
- Fully customizable coverage duration.
- Option to buy the policy 30 days before the start date.
- Peace of mind.
When and Why to Buy Short Term Car Insurance Policy:
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 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:
- In case of using a rented car.
- When driving a private vehicle borrowed from a friend or a relative.
- When you wish to resale a car soon after purchase.
- When learning to drive a car.
- When using a car in another state for the purpose of business or travel.
- When your own car is not usable.
- Drivers with less driving experience.
Explore Acko Car Insurance Policy Online & its Benefits:
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:
- 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.
- 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-day Repair Service
Acko offers 3-day repairs for cars damaged in select cities. The company also provides pick-up and drop of damaged vehicles. This reduces the cost of towing the vehicle to a garage after an accident.
The above features coupled with a dedicated customer support team make Acko the best car insurance solution for customers. All the policyholder needs to do is call Acko in case of damage, and the company will take care of claims.
Frequently Asked Questions
Yes, following are the eligibility criteria for buying temporary car insurance:
>A person who is between the age of 18 years and 25 and carries a valid driving license can buy a temporary car insurance policy.
>If one is looking to learn driving a car then he/she should carry a valid learning license, additionally, someone with a permanent driving license should accompany the driver while using the car.
>If a person has borrowed a car then he/she should be between the age of 17 and 30 to buy short term insurance.
Yes, some insurance companies allow the policyholder to add multiple vehicles to their temporary car insurance policy. However, the cost of such a policy will increase with the addition of each car.
Yes, one can insure the car for a month or less with the help of temporary car insurance. Short-term insurance can be bought for cars that are used for a short duration. For example, while moving furniture, work-related trips, etc.
Since temporary car insurance is rare in India, it may be difficult to find an insurance company that offers such a policy. One may not have access to a gamut of car insurance policies to choose from for this type of insurance. It can also come at an increased cost when compared to a conventional car insurance policy. One should always check the coverage, terms and conditions, exclusions etc. of the policy before making a purchase.
No, it is not necessary to inform the existing insurer about buying a short term insurance policy. In case you are borrowing a car from anyone, taking permission from the owner is necessary.
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