When you think of insurance covers, it reminds you of long-term commitments with tenure ranging from a one, three or even five years in some cases. This is true in most cases of general insurance covers. The vehicle insurance
industry although perceived to be rigid with timelines and the features, but it is far from truth. Modern era insurance has witnessed innovative products being introduced that are dynamic in nature. You have the choice to select the product that fits you the best. One such upcoming product is the short-term car insurance. Although in its nascent stage, the Indian insurance sector have a few insurance companies that offer these short-term car insurance plans. Since it is a niche concept, not much people are aware of it. Let us learn more about it:
What is short-term car insurance?
As the name suggests, a short-term car insurance is an insurance plan for a temporary duration. Since the concept of this policy thrives on the time duration, it can be as low as few minutes extending up to a couple of months. Someone who is not looking to drive the car for the entire duration of a year, which is a minimum for a standard car insurance
policy, can purchase this type of insurance. You can purchase this form of car insurance online or offline, depending on the availability from your preferred insurance company.
The working of a short-term car insurance policy
When you buy a standard car insurance online, it is available in one of two types - comprehensive and third-party. Comprehensive plans can be loaded with add-ons to offer customised coverage depending on your requirement. On the contrary, a third-party car insurance is the minimum requirement for car owners prescribed by the Motor Vehicles Act, 1988.
A temporary car insurance comes into picture where the insurance requirements are limited and time bound. You need to have a strong reason to purchase a short-term car insurance. For instance, relocating to a different city, first-time car learner, rented car are some examples where such a monthly car insurance can be the right fit. In these situations, buying a long-term coverage may not make much sense since the coverage will not be required for the majority part of the policy tenure.
What are the types short-term car insurance policy that you can buy?
Unlike a comprehensive insurance policy, a temporary policy does not offer exhaustive coverage. Here are some of the different types of insurance policies that you can buy:
Gap insurance is a type of short-term or monthly car insurance policy for cars that are bought on lease or through finance. Gap insurance policy comes into effect in the event of a total loss or damage beyond repair where the insurance company pays the market value of the car as compensation. If the amount of loan due is greater than its insured declared value, the insurer pays the balance amount to clear the dues on your behalf.
Rental Car Insurance:
A rental car insurance
is a type of short-term car insurance that offers coverage specifically for rented cars. Since these cars are rented for a limited duration, generally lesser than one year, a monthly car insurance policy fits right for these vehicles.
Non-owners Car Insurance:
For someone who is borrowing a car from either their family or friends, purchasing a temporary car insurance policy will suit right. While this policy is similar to a rented car insurance cover, it is mostly offered to private vehicles.
Now that you know more about temporary car insurance plans, make good use of this monthly car insurance coverage to safeguard your car and avoid financial liabilities. Keep in mind this policy is not available with all insurance companies and you will need to research to find an insurer that offers this facility.