What is Temporary Car Insurance? - Hindustan Times
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What is Temporary Car Insurance?

Published on Feb 19, 2024 06:52 PM IST

When compared to a comprehensive insurance policy offered in India, temporary insurance coverage is less extensive.

Temporary Car Insurance
Temporary Car Insurance
ByHT Brand Studio

Summary: When you talk about car insurance, you probably think of a long-term commitment that will provide you with financial support in the event of an unlucky circumstance. The policyholder has the option to customise a plan, choose a preferred insurance provider, or pick the best kind of insurance for their needs. The best example of this is short-term or temporary auto insurance. The policyholder is financially protected against a range of unforeseen events through its flexible coverage.

Introduction

Most likely, when you think of car insurance, you picture a one-year contract that needs to be renewed annually. But this isn't always the case. Owners of vehicles can select between temporary or short-term auto insurance coverage to provide short-term financial security for their vehicles. Numerous companies also provide one-day auto insurance policies that will cover you for a single day.

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With short-term auto insurance, the car owner has flexible coverage without having to commit to a long-term policy with the insurance provider. When we talk about temporary coverage, third-party car insurance, which covers injury to third parties and damage to their property is also included in the policy.

What is Temporary Car Insurance?

As the name suggests, a temporary car insurance policy offers the policyholder short-term coverage. This type of insurance is just momentary. Thus, depending on the provider, the coverage may last for a few minutes, a day, several days, or a few months. Short-term auto insurance will provide you with temporary coverage if you do not wish to obtain coverage for the entire year. While short-term insurance is not so common in India, it is popular in other countries.

In India, insurance companies usually provide comprehensive as well as one-year third party car insurance. Temporary vehicle insurance is useful when a car owner's needs are limited or time-bound. This may apply in situations like learning to drive, moving to a new location, driving for a few hours, a car not in regular use, and other instances where you won't require coverage for more than a year.

Typically, while purchasing a short-term auto insurance coverage, the following details are needed:

  • Personal information such as name, residence, gender, and occupation.
  • Papers of identification such as a driver's licence, insurance history, etc.
  • Address proof
  • Details about the car, such as the kind of fuel, seating capacity, make and model, and engine capacity.

Types of Temporary Insurance

When compared to a comprehensive insurance policy offered in India, temporary insurance coverage is less extensive. The expense of third-party liabilities, theft of the vehicle, damage to the insured vehicle by fire or other natural disasters, and other risks are all covered by comprehensive car insurance. Nevertheless, the scope and coverage of temporary car insurance for a short period is adequate. It may be available in the following types.

1. Gap Insurance

This insurance covers vehicles that are financed or leased. It mandates that a third party finance the vehicle. The coverage that gap insurance provides is activated in the event of a total loss or damage to the car that cannot be repaired.

In this case, the insurance provider will pay the car's market value. The gap insurance covers the remaining balance to settle the policyholder's loan if the loan amount exceeds the market value or insured declared value.

2. Insurance for Rental Cars

Rental vehicle insurance is a category of auto insurance that provides coverage for a rented vehicle. Most of the time, this type of policy covers accidents, injuries, etc.

3. Non-owners Insurance

While non-owner insurance is generally provided for private vehicles, it is similar to insurance for rental vehicles. For instance, If you borrow a car from a friend or family for a month, you can use this insurance coverage to insure it for the time you have the car.

When Should I Get a Temporary Insurance?

A few days, one-month, or six-month car insurance options cover natural disasters, unintentional damages, personal accidents, etc. This also covers financial losses resulting from man-made calamities. You must choose the best temporary insurance plan for comprehensive coverage in the following situations:

  • If an emergency forces you to sell your new car immediately
  • If you haven't had much experience behind the wheel
  • If you own a car but don't drive it too often
  • If you require a car in another state for work, travel, or business purposes for a brief duration.
  • If you're a novice driver who is only starting
  • If you're driving a rented car
  • If you are using a private vehicle loan from a relative or acquaintance
  • Suppose you have two automobiles, but you drive one of them rarely

Advantages of Temporary Insurance Policy

The policyholder can acquire a few weeks, 1-month, 6-month, or 9-month motor insurance coverage, depending on their needs. The policyholder in this type of coverage often pays lower monthly insurance premiums than in a longer-term policy.

Some of the benefits of temporary insurance are as follows:

  • There is instant coverage
  • Third-party car insurance coverage
  • Option to buy the coverage up to 30 days before the start date
  • Peace of mind
  • The coverage period is fully adjustable

How to Claim Temporary Insurance?

  • Step 1: Get in touch with your insurance provider within 48 hours of the theft or accident.
  • Step 2: File a police report (FIR) if the vehicle is destroyed or taken by someone else.
  • Step 3: Submit the required paperwork.
  • Step 4: To ascertain the extent of the damage, the insurance company will employ a surveyor.
  • Step 5: To get the car repaired, it will be hauled to the garage.
  • Step 6: Cashless service will be provided if the vehicle is being fixed at a network garage.
  • Step 7: In the case of theft, the insured gets the insured declared value (IDV) when the police share an untraceable report.

Conclusion

Now that you are aware of the temporary car insurance policy, you could make use of it to avoid financial liabilities when you use a car for a short duration. However, it is available with only a few insurance providers. Ensure you do thorough research on different insurers when buying temporary insurance.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same.

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