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 most insurance providers.
• If you’re looking to make long-term car insurance more affordable, consider opting into a usage-based insurance program.

Even if your insurance company offers a monthly payment schedule, you’re typically required to choose a six or 12-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. 

In this article, we’ll outline some options for finding car insurance plans that fit your needs and budget. We’ll also recommend a few of the best car insurance companies that offer six-month policy terms.

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 thorough 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. In most cases, the shorter the policy, the fewer discounts on monthly premiums.

There are, however, 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

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 financial commitment of a long-term contract.

Who Needs Short-Term Car Insurance?

Let’s go through a few common scenarios that may result in needing 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 be looking for temporary car insurance:

• College students: Many college students come home over summer and winter breaks and use their parents’ cars for just a few months a year.
• Rideshare drivers: People who drive for rideshare services may need alternative coverage while they carry passengers.
• Car rentals: When renting a car, 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, you might be looking for short-term insurance. 
• 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.

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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. 

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.

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 largely due to the underwriting period and down payments:

The Underwriting Period

The underwriting period describes the time it takes an insurance company to analyze the risk of insuring you and your car. 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.

While this process can be completed in just minutes (when you get a quote online, for example), it can also take longer depending on any complexities in your driving history or discrepancies in the information reported. In these situations, it can take as little as a few days to as many as 60 days. Typically, insurers will issue the policy right away but might increase the rate or cancel it altogether based on what’s discovered during the underwriting period.

If you need car insurance for just a few days or a month, it doesn’t make sense for an insurer 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. And if insurers see a lot of policy cancellations in your history, they might decline the coverage you want altogether.

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How Much Does Car Insurance Cost Per Month?

Based on our research, 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 $798 per year or $67 per month.

What Factors Into Car Insurance Costs?

As you’re comparing auto insurance quotes, however, you’ll notice that average car insurance rates can vary significantly and can also vary by state. Because the minimum requirements for car insurance differ from state to state, the average costs also differ accordingly. 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:

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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 12-month policy.

Usage-Based Car Insurance

Usage-based car insurance allows you to pay for when you drive and how safely you drive. One form of usage-based insurance is pay-per-mile insurance, which bases your rate on how many miles you drive per day. It can be a good alternative in lieu of month-to-month car insurance–particularly if you don’t drive that far or that often, or if you plan to sell a recently purchased car.

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

Rideshare Insurance

As more people supplement their incomes as rideshare or delivery drivers with companies like Uber, DoorDash, and Lyft the need for month-to-month auto insurance increases. Many of these drivers may only want coverage during their work hours. 

Padding your company-provided insurance is a good bet, in our opinion. Many major car insurance companies offer rideshare insurance designed specifically 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 any accidents that occur while you’re driving 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. 

Rental Car Insurance

How about month-to-month car insurance for a long-term or short-term car rental? 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. Many insurers offer rental car coverage on a standard policy, which helps pay for the cost of a rental while your vehicle is in the shop for covered repairs.

Non-Owner Insurance

If you frequently borrow someone else’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.

Just keep in mind that non-owner policies typically only cover liability–meaning the coverage pays for property damage and bodily injury for the other driver and doesn’t protect the car you’re driving. That being said, if you were granted permission to drive the vehicle, you may be covered by the vehicle owner’s policy (under permissive use).

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.

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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 the insurer’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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