Can I get car insurance for 3 months only?

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Joel Ohman
Founder, CFP®

UPDATED: Jul 24, 2017

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Here's what you need to know...
  • Standard auto insurance policies for private passenger vehicles last for either six months or 12 months at a time
  • Once a term is over, the policy will be reassessed and underwritten to set up the policy for renewal with new auto insurance rates
  • During a standard personal car insurance term, the rates will remain the same even if your risk class changes during the duration of the term

Some vehicle owners need auto insurance coverage for a limited time. Planning a cross-country trip or arranging the sale of your vehicle could create a unique scenario where you might only need coverage for a few months.

If you’re shopping for coverage and you don’t necessarily need a policy for an entire standard term, it’s important to assess all of your options.

While you can’t pick a term length that lasts for exactly as long as you want it, there are options that’ll work for your situation.

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Scenarios You’ll Need Coverage for Three Months For


When it comes to buying insurance, typically it’s best to find a longer term so that your rates are guaranteed for longer.

Longer terms also create an advantage when you have an accident or when you’re convicted of a moving violation because surcharges can’t technically be added until your renewal.

Here are some of the scenarios where shorter terms make sense:

  • You’re getting your license privilege back temporarily
  • You’re planning to sell your vehicle in the near future but need coverage in the meantime
  • You’re planning to put your car in storage when you travel out of the state or the country
  • You have a car in storage but are allowing your visiting family members to drive it while they’re in town
  • You’re traveling cross-country and plan to rent a vehicle for several months at a time

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How long do standard car insurance terms last?

If you’re planning for any of these scenarios, you might not need coverage for an entire term. Unfortunately, car insurance terms are sold in policy terms of either six months or 12 months in the standard marketplace.

Which terms are offered depend on the state and the carrier that’s selling the product. In most states, state officials allow carriers to sell either product.

However, there are states that prohibit six-month policies or require providers to offer policyholders the option to choose between six-month and 12-month plans so that they’re not at a disadvantage.

You’ll need to check into the state requirements as you compare terms in your state.

Why is insurance sold in terms?

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The only time your rates can change is when you fail to disclose information on your application or where there’s inaccurate information that changes your risk class and other risk rating factors.

When you’re signing up for a term, you’re guaranteed to receive the rates that you were quoted when the policy was underwritten for the remainder of the term.

When the premiums change during underwriting, it’s called a misquote.

Fortunately, once you pass the underwriting phase and the policy is issued, you’re guaranteed that your rates won’t change.

This protects you from sudden and unjust rate increases that could otherwise happen in the middle of a term.

Insurance companies have peace of mind in knowing they’ll collect a certain amount of money throughout the term and policyholders have peace of mind in knowing they can budget properly.

Can you cancel your insurance during the term?

Insurance companies can cancel your insurance for practically any reason while the policy is still in the underwriting phase.

After that initial binding period, the company has to have a valid reason to terminate your policy in the middle of the term.

Reasons include non-payment, fraud, violation of contractual terms, and loss of a license.

The insurer must comply with cancellation restrictions, but the policyholder is free to cancel their policyholder at any time during the term as long as the cancellation date is in the future.

Since you’re free to cancel a policy a month, two month or three months into the term, you can buy standard coverage for just three months.

How to Cancel Your Policy

Cancellation Rights Car Insurance

When you don’t need coverage you can simply put in a cancellation request with the carrier. Some carriers require you to put your request in writing.

You’ll need your letter to include your name, the date, the policy number, the effective date and the reason for cancellation.

If you do need to backdate the cancellation date, you will need to prove you didn’t own the vehicle or you had insurance elsewhere.

Is there a fee for an early cancellation?

There’s a chance that your insurer might charge you a fee for terminating coverage early.

Whether or not that’s allowed is dictated by the state department of insurance.

If fees are allowed in the state, the insurer can decide if a fee is necessary and what type of fee to charge.

Short-Rate Cancellation vs. Prorate Cancellation


If your policy booklet says that the company will offer you a prorated refund, this means that the company doesn’t charge you a fee.

You’ll receive all of the unearned premiums back that you’ve paid once you send in your cancellation request.

If the company offers short-rate refunds, a fee is deducted from the refund due.

This could either be a fixed fee or a percentage of the premiums that have yet to be paid.

These policies have several restrictions but could be reasonable when you don’t need coverage for long. It’s best to compare rates for standard and specialty coverage to see which is the feasible option.

After you compare costs, compare the premiums through each carrier in the marketplace by using a rate comparison tool online.

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