Can I Get Month-To-Month Car Insurance?

Key Points:

• Most companies don’t offer month-to-month car insurance policies due to an increased risk of loss.
• You can purchase 6-month insurance policies with no cancellation fees from select insurance providers.
• You can make long-term car insurance more affordable by opting into usage-based insurance programs and checking your eligibility for low-mileage discounts.

Even if your insurance company offers a monthly payment schedule, you’re typically required to choose a six or twelve-month contract. Those looking for short-term options might be interested in month-to-month car insurance. But does this type of insurance exist?

In short, not usually. Temporary car insurance in the United States is very rare. There are a few circumstances when month-to-month auto insurance makes sense, but you’re unlikely to find a legitimate company that offers short-term plans. However, this doesn’t mean you can’t find cheap quotes for your needs

Even if you’re driving your car for just a few weeks–or days–nearly all states legally require car insurance. We recommend sticking to the best car insurance providers and making longer plans work for your time frame. We’ll dive into how to do this below.

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What Is Month-To-Month Car Insurance?

Month-to-month car insurance provides coverage for up to 28 days. A monthly car insurance policy is intended to offer the same comprehensive coverage as an annual policy, but its flexible duration means you only pay for it when you need it.

That being said, within the U.S., temporary auto insurance is essentially nonexistent. Companies that claim otherwise often leave out costly stipulations. These agencies know that consumers are looking to save money by choosing a short-term car insurance plan instead of signing on for a longer contract. In most cases, the shorter the policy, the fewer discounts on monthly premiums.

There are some variations of car insurance that are more temporary in nature. For example:

• Car insurance from a rental company
• Six-month contracts with no cancellation fees
• Adding a new car onto an existing policy for a short period of time
• Discounted car insurance for students, military members, and bundled or family plans

You can also get usage-based car insurance to save money if you don’t drive often or rideshare insurance if you’re just looking for coverage when you’re driving for Uber or Lyft. We’ll go into all of these options a bit more in detail below, as some of them could provide a great way to work with a reputable company without the risk of a long-term contract.

So, can you legally get month-to-month car insurance? What about 30-day car insurance? We recommend keeping a safe distance from any plan that feels too good to be true.

Who Needs Short-Term Car Insurance?

Let’s go through a few common scenarios that would cause you to look for temporary car insurance. Keep in mind that there may be better solutions for these circumstances, but we’ll break down the main reasons drivers may need temporary car insurance:

• College breaks: Many college students come home over summer and winter breaks and use their parents’ cars for just a few months a year.
• Rideshares: People who drive for rideshare services may need alternative coverage while they carry passengers, and those who often use transportation like rideshare programs may need certain insurance for affordability or adequate coverage.
• Car rentals: If you’d like to rent a car during a vacation, you may need short-term insurance if the company’s policies aren’t adequate or affordable.
• Borrowing a car: If you regularly borrow a friend or family member’s car, having insurance can give you and the vehicle’s owner peace of mind.
• Moving to a new area: If you recently moved and need immediate insurance, temporary insurance can protect you while you shop around.
• Quick vehicle sale: Drivers who plan to resell a car soon after buying may need temporary insurance to drive the vehicle before the sale.

Why Is It Difficult To Get Short-Term Car Insurance?

Most insurance companies in the U.S. offer only six-month or 12-month policies because the returns from temporary car insurance policies aren’t worth the administrative costs. You may also be able to find month-to-month car insurance, but it likely won’t be offered by reputable providers.

Since customers looking for short-term car insurance are generally not likely to renew their policies, companies don’t find this segment very attractive. Also, there are more risks associated with short-term car insurance, because such policies can often be misused by people looking for a quick insurance payout.

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Why Do Car Insurance Companies Have Longer Terms?

Car insurance plans do not lend themselves to short-term or month-to-month car coverage. This is due to two main reasons:

• The underwriting period
• Down payments

The Underwriting Period

The underwriting period is a stage when an insurance company analyzes the risk of insuring your car and your driving. Depending on the state you live in, companies consider a combination of factors like your age, credit history, driving record, zip code, and vehicle details to determine your car insurance rate.

If you need car insurance for just a few days or for a monthly car insurance plan, it doesn’t make sense for you or the company to go through this in-depth process.

Down Payments

All car insurance companies require some money down to start your contract. Some request a percentage of your annual or six-month premium, while others ask for one month upfront as a down payment. You may also have the chance to pay your insurance premium in full for a discount.

One way you can mimic month-to-month car insurance is to sign up for a longer plan that does not include a cancellation fee. Most companies even offer prorated refunds by the day. So if you cancel your plan halfway through the month, you could receive the amount of money already paid that you didn’t use as a refund. However, this isn’t recommended as it could lead to more expensive insurance rates down the road.

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How Much Does Car Insurance Cost Per Month?

We received quotes from providers across the insurance industry and from all over the country. Based on these quotes, drivers in the U.S. pay an average of $1,968 per year or $164 per month for full-coverage car insurance. Drivers with minimum coverage pay an average of $768 per year or $67 per month.

As you’re comparing auto insurance quotes, however, you’ll notice that average month-to-month car insurance rates vary by state for a handful of reasons. For one, stricter state requirements mean more auto insurance coverage, while those with fewer plan requirements mean more competitive auto insurance rates from company to company. You can also expect car insurance rates to change based on factors like:

• Your driving history
• Your credit score
• The type of vehicle you drive
• How many vehicles you have
• Whether you choose comprehensive or basic liability insurance

There are a few ways to save on your car insurance premiums:

Cost Of Rental Insurance

What about car insurance for 30 days or less, such as with a rental car? If you go through the car rental company, the company’s collision damage waiver can cost up to $30 dollars a day, according to U.S. News & World Reports–which ends up being a lot more expensive than the state averages for a month of car insurance.

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Alternatives To Month-To-Month Car Insurance

Depending on your situation, there are often better solutions to getting temporary car insurance coverage. Some alternatives to consider include usage-based car insurance, rideshare insurance, and rental car insurance. You could also reach out to your insurance company to see if it offers a six-month policy in place of the traditional twelve-month policy.

Usage-Based Car Insurance

Usage-based car insurance allows you to pay for only the amount you drive your car or set your premium based on your predicted schedule. It can be a good alternative in lieu of month-to-month car insurance–particularly for someone who just drives locally a few times a week or for someone planning to resell a recently purchased car.

Here are a few good options from top-rated companies for usage-based insurance plans:

Rideshare Insurance

As more and more freelancers build careers as rideshare drivers with companies like Uber and Lyft, or as food delivery drivers with companies like DoorDash, many look for month-to-month auto insurance to supplement plans offered by these companies.

Padding your company-provided insurance is a good bet, in our opinion. Many major car insurance companies offer rideshare insurance for the needs of the modern gig economy. You should note that you must alert your insurance company if you plan to drive your vehicle for commercial purposes. If not, your personal car insurance plan will most likely not cover the cost of accidents while you’re available for business.

If you plan to pick up some side work or start a new ridesharing business, speak to your auto insurance company about add-ons to your current plan. You may also be able to pay monthly for a business auto insurance policy that doesn’t have cancellation fees and offers refunds for cancellations before the term has ended.

Rental Car Insurance

How about month-to-month car insurance for a long-term or short-term car rental? If you head to a rental booth at the airport to kick off your vacation, car rental insurance in the U.S. typically includes:

• Bodily injury and property damage liability coverage
• Personal accident insurance
• Collision damage waiver
• Personal effects coverage

Before jumping into supplementary plans, consider whether you really need it. Many credit card companies actually offer some form of extra rental car insurance when you use the card to book the rental, so you might already be covered.

You can also check if your normal car insurance plan extends to rental car coverage within the U.S. This may change based on the value of the car you rent. If you choose a car with a much higher value than your vehicle back home, your policy may not offer enough coverage.

Non-owner Insurance

If you frequently borrow your friend’s car, use a car-sharing service, or rent vehicles, carrying a non-owner car insurance policy is one of the best ways to protect yourself in the event of an accident. These policies guarantee you meet state minimum insurance requirements and are typically offered by most major insurers.

While a non-owner policy isn’t guaranteed to be temporary coverage, some companies may offer this type of auto policy with a six-month contract and no cancellation fee. Shop around for coverage options from different providers and read up on cancellation policies before committing to a contract.

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Canceling Your Car Insurance

Most companies offer refunds on car insurance if you cancel early, move to an area that lowers your rate, change your plan, or sell your vehicle. You’re more likely to get a refund if you paid for your plan in full beforehand, but depending on when you canceled your plan, you may still receive a small refund for a few days.

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Month-to-Month Car Insurance: Our Take

Month-to-month car insurance may not be as flexible and cost-effective as it initially sounds. Companies don’t typically offer this type of coverage in the U.S., primarily because it increases a company’s risk of financial loss. However, you may be able to find a six-month policy or other short-term coverage without any cancellation fees.

Your best bet is to call a top-rated car insurance company and explain your specific needs. Insurance agents are there to help you get the most from your plan. Companies may be able to design a six-month contract with enough discounts to get your premium way below what you would have thought.

Our Recommendations For Car Insurance

Ready to look at some alternatives to month-to-month auto insurance? You may have the most luck with companies that offer flexible, six-month plans. Here are quotes for full coverage plans from a few of our top companies to get you started:

*Only for military members, veterans, and their families.

Any time you shop for car insurance, you should get car insurance quotes from more than one company. Some insurers are cheaper than others, but there are other factors that affect your rate, like your age and the type of car you drive. The only way to know what you will actually pay is to get a quote.

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Month-to-Month Car Insurance: FAQ

Below, we cover the most frequently asked questions about month-to-month car insurance options:

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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