Your Complete Guide to Temporary Car Insurance

As per the laws, it is important to have car insurance that offers coverage and compensation for any loss or damage caused to the vehicle in an unfortunate incident. Generally, insurance companies offer long-term policy plans renewable annually, once in three years, etc. but some insurance companies offer short-term car insurance plans that are known as temporary car insurance plans.

Temporary car insurance is a car insurance plan available for six months tenure. You can purchase temporary car insurance in case of relocation, rental car, etc. Purchasing temporary car insurance secures you with coverage and compensation for any loss or damage caused. The concept of a temporary car insurance policy is gaining popularity in India with the success of the car rental businesses.

Benefits of a Temporary Car Insurance Plan 

There are various benefits of a temporary car insurance plan that one can avail of – 

• Tailored Plan – You can customise your temporary car insurance plan as per your budget goals and can purchase even 30 days before the commencement date of the policy.
• Flexible Tenures – You can purchase temporary car insurance with a flexible repayment tenure between 1 month- 9 months as per your comfort and convenience.
• Instant Settlement – You can enjoy instant claim settlement without any hassles.
• Third-Party Liability Coverage – Temporary car insurance offers coverage for third-party liabilities including damage repairs and replacement of vehicle parts or accessories.
• Personal Coverage – The insurance plan also offers coverage for any loss or damage caused to the policyholder.

Reasons to Purchase Temporary Car Insurance

Temporary car insurance is beneficial for the following situations –

• Borrowing a car from a friend or neighbour for a journey or a weekend trip 
• Renting a car, while your car gets repaired at a service station
• Renting a car for some excursion
• Renting a car as a commuting facility in another city or state
• Planning to sell your car within a few months
• Taking car driving lessons
• Minimal driving experience and financed a new car
• The car will not be used for a prolonged period

Types of Temporary Car Insurance Plans 

A temporary car insurance plan is available to cater to the different interests and budget goals of customers –

• Rental Cars – For individuals who have subscribed for a rental car for a weekend trip, relocation, etc. they can purchase temporary car insurance to get coverage for loss or damages. 
• Borrowed Cars – Also known as non-owner car insurance, it is similar to rental car insurance, but for private cars. One can get insurance for a car borrowed from relatives, friends, etc for a short-term period.
• Financed Cars – For cars that are financed or purchased on a lease, they can purchase gap insurance that will offer compensation in case the car gets damaged and is beyond repair. The gap insurance will compensate the remaining loan amount apart from the insured declared value to close the loan account of the policyholder.

Eligibility Criteria for Temporary Car Insurance

• You should be between 18 -30 years of age.
• You should have a valid driving licence or at least hold a learner’s licence for a car. 

Documents Required for Temporary Car Insurance 

• Passport-size photographs
• Identity Proof – Aadhar card, PAN card, etc.
• Address Proof – Utility bills, Passport, etc.
• Vehicle Details –  registration certificate, rental agreement, etc.

**Note – The documentation procedure might require some additional documents depending upon the norms and conditions of the insurance company.

Inclusions and Exclusions of  Temporary Car Insurance

Temporary Car Insurance Premium 

As per IRDAI standards, there is no specific restriction on the premium amount in temporary car insurance premiums. The premium amount is determined by considering various factors by the insurance company –

• Ownership of the Vehicle
• Vehicle Usage
• Model and Age of the car
• Fuel type of the vehicle
• Insurance Tenure

There are many insurance companies like Acko, HDFC Ergo, Bajaj Allianz, etc. that are offering temporary car insurance at an annual premium starting at ₹2,095. 

FAQs

• Can I purchase temporary car insurance for multiple cars?

Yes, one can purchase temporary car insurance for multiple under a single application, however, there will be a hike in the premium amount with the addition of every car.

• Can I purchase temporary car insurance from another insurance company?

You can purchase temporary car insurance from another insurance company and still enjoy the benefits of both policies seamlessly.

• What is the minimum tenure of temporary car insurance?

The  minimum tenure for temporary car insurance can be a few hours and can go up to 9 months depending upon the requirement of the customers.

• I am planning a drive to my hometown on the weekend. My friend’s car is already insured. Should I purchase temporary car insurance?

Temporary car insurance will provide personal accidental coverage to you apart from third-party liabilities, in case of any loss or damage. Any general car insurance plan will not offer coverage for loss or injuries to friends or relatives driving the car.

• My car insurance plan has expired and I am planning to sell my car. Can I purchase temporary car insurance for three months and renew it later?

You can purchase temporary car insurance for three months, however, the car insurance renewal depends upon the norms and policies of the insurance company.