Temporary Car Insurance: Benefits, When & Why to Apply

By Neha Goyal
  | Published: 02 April 2021 | Last Updated On: 07 June 2021

Buy Car Insurance in 30 Seconds !

Average Rating / 5 (ratings ) | 272 Views
akshay-img

In times of a pandemic, when you barely get out of your house, you would not like to pay high insurance premiums for something that’s just collecting dust. An expensive auto insurance policy may not always be the right solution if you barely take your car out. Also, the choice of insurance is totally dependent on your driving habits. If you need to get covered for a short period of time, then temporary car insurance may be an ideal option for you. However, before you buy short term car insurance or temporary car insurance, it is important to understand how this insurance policy works, what are the benefits, what’s covered and what’s not.

What is Temporary Car Insurance?

Temporary car insurance offers coverage for a short period of time. It offers highly flexible coverage that financially safeguards the insured against several contingencies. Since this type of insurance policy is temporary in nature, the validity of temporary car insurance can be as less as a few minutes or as long as a few months. In a particular situation when a person is not looking out to purchase an auto insurance policy for duration of 12 months, short term car insurance becomes an ideal choice.

How Does Temporary Car Insurance Works?

Generally, car insurance coverage in UAE is limited to two major auto insurance policies. One is a third-party liability auto insurance policy and the other one is a comprehensive auto insurance policy. The tenure for a traditional car insurance policy is one year. If one chooses to opt for a comprehensive car insurance policy then he/she can also buy additional coverage by paying an extra premium to enhance the basic coverage. On the other hand, purchasing at least a third-party liability auto insurance policy is mandatory by the RTA law in the UAE and offers minimum possible coverage to the policyholder of the insured car.

Short term car insurance or temporary auto insurance comes into play when a person needs to drive a particular vehicle for a short duration. For instance, a driver doesn’t need yearly auto insurance if he/she is learning to drive, rent a car or relocating. If the requirement ranges from a from few hours to months then buying temporary car insurance makes sense in such situations.

Though not all car insurance companies offer temporary car insurance in the UAE. But still, you can search for an insurer that offers short term car insurance and enquire about the insurance coverage, cost, and other terms of the policy. Generally, the below-mentioned information is required while purchasing temporary auto insurance:

  1. Address Proof
  2. Driving license details
  3. Personal details such as name, age, address, profession, etc.
  4. Car details such as fuel type, engine capacity, seating capacity, make and model, etc.

Benefits of Coverage Offered by Temporary Car Insurance 

You can opt for short-term car insurance ranging from one month to nine months based on your requirement. In this type of auto insurance plan, the policyholder would typically pay less insurance cost per month in comparison to a traditional car insurance policy. The policyholder can enjoy the following benefits by purchasing temporary car insurance:

  1. Instant insurance coverage
  2. Accidental damage cover
  3. Coverage against third-party property damage and injuries.
  4. Personal accident cover for the driver
  5. Flexible coverage duration of the policy that can be customized as per one needs.
  6. Ensures peace of mind
  7. Affordable and better option to those looking for short-term coverage.
  8. Option to purchase the car insurance policy 30 days before the start date.

When & Why to Opt for Temporary Car Insurance?

Temporary car insurance offers coverage against various liabilities such as the personal accident cover of the driver, accidental damage, calamities and offers financial protection against damage arising out of natural or human reasons. One can opt for short term car insurance in some specific circumstances. Some of those situations are as follows:

  1. When using a rented car.
  2. When learning to drive a vehicle.
  3. When borrowing a car from your friend or relative who do not have an insurance.
  4. When driving someone else’s vehicle temporarily.
  5.  When you want to resale a vehicle soon after you purchased it.
  6. When your own vehicle is not usable.
  7. When you are travelling to another country & plan to drive while you are there.
  8. When using ride sharing or if you don’t own a four-wheeler but will be driving frequently.

Temporary Car Insurance Inclusions

Here is a list of temporary car insurance inclusions:

  • Cover for Personal vehicle damage
  • Medical cover for personal injuries caused while driving the insured vehicle
  • Third-party vehicle damage coverage
  • Third-party bodily injuries coverage
  • Cover for damage caused by natural calamities
  • Personal accident cover for driver
  • Cover for theft and fire damage
  • Roadside Assistance
  • Collision coverage

Temporary Car Insurance Exclusions

Here is a list of temporary car insurance exclusions:

  • Damage to electrical equipment
  • Damage due to vehicle rollover
  • Damage incurred during the war
  • Intentional car damage
  • Damage caused by racing a car
  • Damage caused due to drink and drive

Things to Know When Purchasing Temporary Car Insurance

If you think you will need short term car insurance ever in your life, there are some important things that you need to keep in mind before opting for one. First of all, remember that it is harder to find because not all car insurance companies in the UAE offer this type of car insurance policy. Thus, you may need to research to find the insurance companies that offer temporary car insurance. And then compare different short term car insurance quotes online to get an idea of the coverage options available in the market.

Always consider the total cost of policy. Look at the premiums & deductibles and also check whether the insurer requires any prepayment of monthly premiums or any type of down payment. Do not forget to check what is covered under the car insurance policy. After getting all the details in hand, choose one that suits your insurance needs.

Difference between Third-Party and Short-Term car Insurance

Third-party car insurance helps policyholders cover third-party damages and losses caused by the insured vehicle.

Here is how third-party car insurance is different from temporary car insurance.

Categories

Temporary Car Insurance

Third-Party Car Insurance

Personal vehicle Damages

Yes

No

Personal belongings Cover

Yes

No

Third-party property damage

Yes

Yes

Third-party body injuries

Yes

Yes

Roadside Assistance

For personal vehicle

For third-party vehicle

Damages caused by fire and theft

Yes

No

Damages caused by natural disasters

Yes

No

Frequently Asked Questions

Q1. Can I take a Temporary Car Insurance for a month?

Ans. Yes, you can take temporary car insurance for a month or less. Most companies in the UAE provide temporary car insurance for short time duration.

Q2. Is it possible to add multiple cars to temporary car insurance?

Ans. Yes some insurance companies in the UAE allow you to add multiple vehicles to your temporary car insurance policy. However, the cost of such policies may increase. 

Q3. What things should I consider while buying Temporary Car Insurance?

Ans. Not all insurance companies in the UAE offer temporary car insurance. It might be difficult for you to find one. Make sure you choose the insurance provider with a stable financial condition and a good claim settlement ratio. You must compare the terms and conditions, coverage, inclusions, and exclusions of different insurance providers before you buy a temporary car insurance policy.

Q4. Do I need to inform the existing insurance company if I buy temporary car insurance from the other company?

Ans. No, you need not inform the existing insurance company if buying temporary car insurance from another insurance company. However, if you are borrowing a car, you need to ask for the owner’s permission.

Q5. What are the eligibility criteria for buying Temporary Car Insurance?

Ans. Here are the eligibility criteria you need to meet for buying Temporary Car Insurance.

  • A person must carry a valid driving license
  • If the person is looking forward to learning to drive a car, the learner’s driving license is necessary. Also, the driver needs the company of a person with a permanent driving license.
  • The age of the person must be between 18 and 25 years
  • If the car has been borrowed, the age of the person must stand between 17 and 30 years.

Q6. If I claim temporary car insurance, will it affect the owner’s no-claim discount?

Ans. If you have separate temporary car insurance for the vehicle and report the claim for the same, it will not affect the permanent car insurance that the car owner has registered. The owner can still get the no-claims bonus at the time of policy renewal.