Do You Need Temporary Car Insurance?

Do You Need Temporary Car Insurance?

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated May 7, 2021

If you only intend to drive a vehicle for a short period of time, is there any point in paying full price for a regular car insurance policy? 

Whether you’re just borrowing a car, driving a rental for a few weeks, or are planning to sell your vehicle sometime soon, you may want to look for a policy that offers just enough coverage without the full scope of a typical auto insurance policy.

In this article, we’ll discuss temporary car insurance, which is designed to provide coverage while you’re on the road but only for the short term. 

What Is Temporary Car Insurance?

As the name suggests, temporary car insurance offers coverage over the short-term and is not meant to last for the long haul. Instead, this type of policy provides motorists with an auto insurance policy for a temporary amount of time. Term lengths vary from anywhere between a few weeks to up to 6 months.  

Temporary car insurance offers short-term protection against any damage or injury if you’re in an accident. This applies to a car you own, rented, or borrowed for someone else. You can specify exactly what type of coverage is required and the specific number of days that you will need it.

When Would You Need Temporary Car Insurance?

There may be a couple of reasons why you would opt for a short-term auto insurance policy as opposed to a traditional plan:

You’re A Visitor

If you’re visiting Canada on an extended holiday, then you may find it more affordable to buy a car instead of a rental vehicle. In this case, you’d need insurance, but not for any longer than a few months for the duration of your stay. 

You’re In The Middle Of Transferring Ownership Of Your Car

When ownership of a vehicle is in the transition phase of being transferred from the current owner to a new owner, a short-term license plate may be used. In this situation, a temporary insurance policy may offer coverage for the short-term licence plate until the full plate is registered.

You’re Borrowing Someone’s Car

If your friend or a family member is lending their vehicle to you, you may still need to take out your own policy temporarily instead of driving under their ownership and policy. In this case, a temporary auto insurance policy may be required. 

You’re Planning To Sell Your Car Shortly After Buying It

If you only plan to keep the car you just bought for a short amount of time, then a temporary policy may be appropriate. 

How Much Does Temporary Car Insurance Cost?

Short-term auto insurance typically costs more than a regular car insurance policy. That said, the cost will depend on a variety of factors, such as the make and model of the car, how far you plan to drive it, where you intend to drive it, and other factors. 

If you are planning to take out a policy for just a few days, then a temporary policy will be both more flexible and cost-effective than an annual policy. But if you plan to drive the vehicle for a few months (but less than 6), then you may find it more affordable to take out an annual policy and cancel it when it’s no longer required. Just be wary of the cancellation fees that may accompany early cancellation. 

Types of Temporary Car Insurance

There are varying degrees of temporary car insurance that you can choose from based on your exact needs:

1-Day Insurance

Believe it or not, but you may have the option to take out a policy that only lasts one day, though these cases are rare. Some insurance providers may offer this type of short-term, on-demand auto insurance if you need it.

1-Week Insurance

This type of temporary auto insurance may be taken out in cases where you are borrowing a friend’s vehicle and need your own policy for a short time. 

1-Month Insurance

Again, this type of insurance is designed to be temporary in nature and provides coverage for up to one month in cases where a permanent policy is not required. 

Alternatives To Temporary Car Insurance

There may be more flexible and easily-accessible short-term policies that you may want to consider as opposed to a temporary auto insurance policy, such as the following:

Pay-As-You-Drive Policy

Some insurers offer a “pay-as-you-drive” policy whereby you’ll be covered under a comprehensive plan but will only have to pay for the distance you drive. 

Monthly Premium Payments

Find a car insurance policy that allows you to pay monthly premiums as opposed to annual premiums. That way you can cancel the policy when you don’t need coverage anymore. If you go with this option, look for an insurance provider who doesn’t charge cancellation fees.

Additional Driver On An Existing Policy

If you’re borrowing a car for a short period of time, ask the owner if they would be open to listing your name as a driver on their insurance policy. 

Car Rental

You could rent a car and buy auto insurance through the rental company, though this may be a more expensive option.

Where Can You Get Temporary Car Insurance?

Temporary car insurance is available in most provinces across Canada, except Ontario. The laws surrounding car insurance in Ontario are pretty strict. Even in provinces where it is available, not all insurance providers will offer it. 

You may choose to take out a 1-year policy and then cancel some time before the expiry date, though you will be charged a cancellation fee for terminating the policy before it expires. 

To find a temporary car insurance policy, you may call various insurance providers directly, work with an insurance broker who can help find a policy on your behalf, or deal with an online insurance aggregate to help compare insurers and policy rates. 

Pros And Cons of Temporary Car Insurance


  • Flexibility. You don’t have to take out a full policy if you only plan to drive for a short period of time.
  • Cost savings. Since your coverage is only required for a temporary amount of time, you won’t have to pay for a full year or more for coverage that you don’t need, saving you money.
  • Choice. Choose between a 1-day to a 1-month or longer policy as you see fit.


  • Hard to find. This type of unique car insurance policy can be difficult to find, and depending on where you live, you may not be able to take out this policy at all. 
  • Risk of gaps between coverage. Since temporary auto insurance is short-term in nature, it can be easy to forget when the policy ends, leaving you without coverage and vulnerable to being fined for driving without insurance. 
  • Waiting period for making a claim. In many cases, you may be forced to wait weeks before you’re able to file a claim under a temporary auto insurance policy. 

Temporary Car Insurance FAQs

What if I’m temporarily living in another province? 

If you’re living away from home for a short period of time – whether attending university or caring for a loved one in another province – you should look into getting coverage in your home province.  The majority of insurance providers will allow you to remain covered under your home address rather than your temporary out-of-province address; however, you should check with your insurer to verify if there are some exceptions that may leave you uncovered.

Can I get temporary auto insurance for my RV?

If you own an RV that you only drive for a portion of the year, you may be able to get part-time RV insurance. Inform your insurance company of how long you plan to use it throughout the year and the type of coverage you need. Ask them if there are any requirements you need to stay covered, such as how long the RV must be parked before your temporary policy kicks in. 

Does temporary auto insurance provide instant coverage?

Yes, much like a regular insurance policy, a temporary auto insurance policy will protect you as soon as you take it out. However, you may have to wait about a month or so before you’re able to make a claim if required. 

What should I do if I don’t drive my vehicle that much?

If your car is usually parked for months at a time, you may want to take off the regular coverage and opt for storage coverage instead. That way you’re not paying the full rate, but your car is still covered against any damage or theft. If you want to take it out on the road, however, you’ll need to put your regular policy back in place. 

Final Thoughts

If you only plan to drive your car for a short period of time, temporary auto insurance can be a great way to ensure coverage while you’re on the road without having to pay the full price tag on a traditional policy. That said, this type of insurance can be tough to find. You may want to speak with an insurance broker to help you find an insurer who can offer you what you need. 

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Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

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