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What is One Month Car Insurance

Most people who take out a car insurance policy take one out for the long term, which is normally one year. However, there are situations in which a person might need to have car insurance for a short period of time, such as one month. One month car insurance policies are available and can be utilized for a variety of reasons. The reasons for having a one-month car insurance policy as well as how to go about obtaining a one-month policy are explained herein.

Reasons for a One-Month Auto Policy

The following are examples of some of the reasons that a one-month car insurance policy could be a good option.

  • Most auto insurance does not cover the car or driver if the car is taken overseas. A one-month car insurance policy would be ideal if the car and driver are going on a trip to a foreign country. This type of insurance is also good for rental vehicles since rental insurance is not as comprehensive as it should be and the added protection a personal car insurance policy brings can save a great deal of frustration.
  • Borrowing a vehicle from a friend or family member is another reason for obtaining short term insurance. The owner of the vehicle’s insurance may cover drivers for one day or a short trip; however, if the car is being borrowed for longer than that, it is a good idea to take out a one-month policy that will cover the car in the event of an accident.
  • Money shortages are another reason that many people turn to one-month policies. When budgets are tight, such as they are in a downward economy, paying the premium of a full year or even six months can be hard, if not impossible. A one-month policy can solve this problem and allow the policy holder to continue driving while working out their financial situation.
  • When friends and family come to visit and need to use a car, it is best that they have an insurance policy that will cover them and the car while they have it. A one-month policy can be put in place to cover them while they visit and keep the car from becoming a liability to the owner should it be in an accident.
  • If the car in question is going to be sold soon it may be smart to have a short term policy on it rather than insuring it for a long period of time and then having to wait for the insurance company to refund the balance.

There are certainly other reasons that short term auto insurance makes sense for car owners, these are simply some of the most obvious reasons. The next step is determining where to find this insurance.

Finding Short Term Insurance

Not every auto insurance company offers one-month insurance and it may take some time to find a company that does and is affordable. The Internet is a great research tool for finding these companies. It is also a good idea to check with local insurance agents who may be able to point out where to go for short term policies.

Once an agent or company is found that is able to provide this insurance, the process is as a simple and quick one. The policy is written, a binder is produced, payment is made and the insured is on their way. This is an ideal situation when purchasing a new car and insurance has to be in place before the car can be taken from the car lot.

Understanding Restrictions on Short Term Auto Insurance

Short term insurance is easy to apply for, simple to put in place and quick to get into effect; however, there are typically restrictions on this type of policy. Car owners should know what the restrictions are before deciding on a short term policy so that they don’t wind up unable to get auto insurance and having to start over in their research. Typical restrictions include:

  • Age: Most short term policies are restricted to drivers who are over the age of 25. There are no hard and fast rules on this and each insurance company may have a different minimum age.
  • Clean driving record. This is most likely true of any insurance company. They are, after all, taking a risk by offering such a short term policy and offering it to safe drivers simply makes good business sense.
  • Previous insurance claims should be limited. Insurance companies are hesitant to provide insurance to people who have a history of claims and this is even truer of short term insurance carriers.

If the restrictions are not a problem and a short term carrier has been found, one-month car insurance may well be the answer to auto insurance needs for many people. Consider the reasons for a short term policy and compare rates before purchasing a one-month car insurance policy.

Understanding the Different Types of Auto Insurance

People aren’t typically over anxious to research auto insurance and they don’t pay very close attention to it with the exception of the premium. Most all drivers know they have to carry a minimum amount of insurance in order to drive and that they need enough to keep them from being financially ruined in the event of an accident.

However, what many people may not know is that there are many different types of auto insurance and that understanding the different types of auto insurance is important in making a decision on what type to have on a vehicle.

Having an understanding of the different types of auto insurance will also make it easier to read the fine print on an insurance policy. It will help when purchasing insurance so that the agent isn’t trying to add on polices that are not necessarily needed and allow the insured to ask questions about policies or add-ons that they might be interested in purchasing. An overview of the different types of auto insurance is included below to provide some guidance.

Types of Auto Insurance

  • Bodily Injury Liability (BD): Bodily injury liability is typically part of an overall liability insurance plan. This portion covers payments for medical injuries or death to parties in an accident when the insured is at fault. BD also pays for any legal costs that the insured may incur fighting the case. Medical and legal expenses can be exuberant which makes this insurance a vital part of an auto policy.
  • Property Damage Liability (PD): This is the auto insurance that is typically required in order to operate a vehicle in almost all states. This insurance covers pays for any damage caused by the insured’s vehicle to other vehicles or property in an accident in which the insured is at vault. It is important that drivers have enough PD insurance to cover damages so that personal assets are not brought into a lawsuit in the event of an accident.
  • Uninsured Motorist Coverage (UM): It is impossible for drivers to know if other drivers on the road have insurance. Regardless of the laws stating that insurance is a requirement, there are drivers on the road who do not have insurance. UM insurance provides the insured with coverage should they be involved in an accident with an uninsured driver. UM covers medical expenses but in some states it cover vehicle damage as well.
  • Medical Payment: This is an optional auto insurance coverage that pays for medical expenses for the insured and passengers in the insured’s car regardless of who is at fault. States that have no-fault laws don’t require this insurance as the no-fault coverage will pay for medical and other expenses related to the accident.
  • Collision: Collision insurance is another insurance that may be optional. This insurance covers damage to the vehicle in the event of an accident, after the deductible is paid; the collision insurance covers the remainder of the repair bills. If the car is under a lien, collision insurance may be required by the lien holder. Many car owners who have paid their car in full choose not to carry collision in an effort to save money on car insurance.
  • Comprehensive Coverage: Comprehensive coverage is very similar to collision coverage in that it is optional and covers damage to the vehicle. However, comprehensive coverage goes much further than collision and covers things like natural disasters, theft, animal collisions and much more. If the vehicle is under a lien, the lien holder may require comprehensive coverage in addition to collision.

It is easy to see that auto insurance is a lot more complex than simply paying for a liability policy. It is important that every automobile owner plan their insurance needs and find a policy that meets all of their needs and provides protection to their personal assets.

Understanding the Numbers

In addition to understanding the types of insurance available, it is important to understand what the numbers mean and the way they are presented. Typcially, insurance coverage are presented in this manner 25,000/50,000/25,000, with everyone’s policy being customized as far as the amounts. The way this format reads is:

  • 25,000 (or the first number): this is the coverage for medical or death for one person in an accident;
  • 50,000 (the middles number): this is the total coverage for the total number of people injured or killed in an accident;
  • 25,000 (the last number): this is the coverage for the property damage in the accident.

It is important that individuals personalize their policy and have the coverage they need to fully protect them and their vehicle in the event of an accident. It is important that the right types of policies are selected and that the insured understand how these work in their particular vehicle situation.

Understanding Car Insurance Needs

Young drivers aren’t particularly concerned with auto insurance, they are content being covered under their parent’s policy; however, there will come a day that understanding car insurance needs will become important. When this day comes, they need to know what type of insurance they need, what is required in their state and many other facts about car insurance. Relying on an insurance agent to help them decipher auto insurance can be a costly mistake since agents typically work on commission. The following information should help explain car insurance needs so that drivers can choose what is best for them and their situation.

Knowing the Laws and Requirements

The first thing that any driver needs to know is the laws that are put forth by their state regarding auto insurance. Forty-seven of the fifty-two states have laws that mandate drivers having at least liability insurance. This type of insurance covers any property damage or medical bills that arise as the result of an accident where the insured is at fault. In addition to liability insurance, there are fifteen states that also mandate Personal Injury Protection or PIP insurance. This insurance pays for time lost from work due to a car accident and pays for medical bills.

If the car being insured has a lien against it, the lien holder will require collision and comprehensive insurance in order to protect their investment in the vehicle. These two types of insurance cover damages to the vehicle in the event of accidents, acts of nature and other events.

These are just a few examples of the laws and regulations that states and other interested parties have in place to protect drivers. There are additional laws for high risk drivers and other situations. It is important to get an understanding of what is required before researching policies.

Coverage Options

Before purchasing auto insurance it is a good idea to have an understanding of the various options that are available. These options can alter the price of the policy dramatically. Some options that may not be necessary include:

Car rental insurance: This provides a rental car if the insured vehicle is not operable.
Roadside Assistance: Provides minor help or a tow truck if needed.
Extended Warranty: Extends the warranty period on the insured car.

Gap Insurance: If the car is not paid for or is leased, gap insurance covers the difference in the amount owed on the car and the actual cash value of the car should it be totally destroyed in an accident.

These are just a few of the optional coverage available. Each one should be considered thoroughly before choosing them and a decision made based on necessity and financial ability.

Consider the Car

The car that is being insured is another important part of the process of understanding auto insurance. If the car is an older car that is paid in full, it might not be important to have collision and comprehensive insurance; however, if the car is a classic vehicle or a newer vehicle, collision and comprehensive insurance may be vital. Older cars may need to have roadside assistance on their policy while newer ones may have this feature built into their warranty.

Budget

The ultimate decision maker when purchasing insurance is going to be the budget available to spend on car insurance. Online insurance quote sites are ideal for comparing various insurance costs and reconfiguring the various aspects of the quote until it is in line with the budget that is available.

Using these sites helps put together an idea of the coverage amounts that can be afforded while still maintaining the required amount of coverage. These sites personalize policies and provide the best prices from a variety of companies which can save time searching for an affordable policy.

Check All Other Policies

Before purchasing auto insurance, it is a good idea to check any other insurance policies for overlapping areas. For instance, many people have comprehensive health coverage that would cover them in an accident; this can eliminate the need for PIP insurance. Additionally, there may be rental insurance and roadside assistance built in to other plans, such as some cell phone carriers. The cost of this through the cell phone carrier is typically much less than it would be through an auto insurance company.

Young drivers just starting out with their own insurance policies as well as older drivers who are looking for a new policy need to understand the various aspects of auto insurance in order to make sure they get the best possible price on a policy that meets all of their needs. Car insurance is a necessity that should be taken seriously and researched thoroughly in order to cover all the necessary areas and protect financial assets and other drivers on the roadways.