If you just want car insurance for a short period, there are several ways in which you can buy it.
1) Specialist short term car insurance companies
There are a number of companies that specialise in providing insurance cover from between a single day and 28 days for UK motorists. These policies can often be renewed as they expire, if you need cover for a longer period.
Advantages:
- They are fast - you can get a quote, and buy cover, within just a few minutes
- You can choose for your cover to start at any time within the next 28 days or so, or immediately - great for emergencies
- You don't have to own the car that you're insuring This means that you can get covered for a borrowed car, or share the driving with a friend on a long journey
- You can lend a car to a friend and then make sure that he or she is insured This is very important because if you lent a car to an uninsured person you would be committing a serious offence
- A claim against the policy wouldn't necessarily affect a no-claims bonus on an existing annual policy
- Documents (including cover note) can be downloaded immediately for printing or storing on your mobile phone - so no waiting before you can drive away
- Not only UK, but also EU (and sometimes certain Commonwealth) driving licences are usually accepted
- Breakdown assistance can often be included as an optional extra
- You can buy it online at any time
- Cover is usually comprehensive for driving within the UK
- The policies normally include cover for driving within the EU, with the ability to upgrade it to comprehensive as an optional extra
Disadvantages:
- There are age limits: 18-75 is possible, but some insurers refuse to cover motorists under 21, or even 25
- A limited number of cars are on the isurers' approved lists Many older, high value or higher insurance group cars are excluded
- Acceptance criteria, such as any previous accidents or convictions, can be tighter than those for conventional policies
- The premiums can be a lot higher, for the length of the insured period, than for conventional policies
- There is usually a maximum sum that will be paid out in respect of damage to, or loss of, your own car or other property.
2) Buy a yearly policy and cancel it
If you buy a yearly policy you are entitled to cancel it at any time, and receive a refund for any unexpired portion, subject to the terms and conditions of the company that issued it. These T&Cs will include penalty charges for cancellations. Some companies make quite small charges (around £25 seems to be a minimum) but others can charge considerably more. It isn't really possible to say which insurers offer the lowest charges since their offers can change without notice.
Advantages:
- You could compare prices and benefits from a large number of insurance companies
- If you need to have cover for a fairly long period, but less than a year, this method could prove a lot cheaper than buying several short-term policies
- There may be more flexibility in acceptance criteria, and greater choice in optional extras.
Disadvantages:
- You would need to read the terms and conditions of potential insurers very carefully; particularly their 'cancellation' conditions
- You might have to spend a lot more time looking at quotations before you find the one that's best for you
- Charges may be rounded up to the nearest month. You may therefore have to pay for more cover than you need
- If you bought the policy through a broker, they may be entitled to cancellation charges, as well as the insurer.
In conclusion, this technique may be economical if you need to insure a vehicle for several months, but it is likely to be more trouble than it's worth for a short period. In addition you would need to be very careful indeed about checking the insurers' documentation, so that you would be fully aware of the penalties you would face for early cancellation.
3) Specialist pay-as-you-go brokers
It is possible to buy policies that work in a similar way to the above 'buy then cancel' policies, with the difference that the broker you deal with has already selected an insurer, or insurers, who charge little in the way of cancellation fees. The way it can work is: you either pay the full premium in advance; or a deposit, which includes cancellation fees, followed by monthly repayments with a (quite stiff) interest rate. You are then, it is claimed, free to cancel at any time and then simply stop your payments, or qualify for a refund if you have already paid in full.
Advantages:
- It's quicker. You should be able to get a quote, and buy a policy, within a few minutes.
- There is less work for you to do than in the previous technique, since the insurer(s) have already been selected, and all the necessary facts should be made easily available to you.
Disadvantages:
- You are likely to have a much smaller numbers of insurers to choose from and the premiums may be higher than you would have to pay if you compared quotes yourself
- You would be well advised to look up online reviews about the brokers and insurers involved in these schemes before committing yourself in any way.
4) Get added to a policy as an additional driver
You want to lend your car to someone? Phone your current insurer and ask for this person to be included on your existing policy. You want to drive someone else's car? Get the owner to contact his/her insurer in the same way. You will probably have to pay an administration fee and there may, or may not, be an extra premium to pay.
Advantages:
- You may feel that you can trust the current insurer more than you could another one that you may not have heard of before
- Depending upon the insurer's attitude to this, and the potential risk they feel the other driver presents, this may be the cheapest way of arranging the extra cover. Or not, of course. Either way, it is worth asking.
Disadvantages:
- The insurer may not agree to allowing more than one person on the policy
- They may agree but are likely to insist on a minimum cover period, perhaps until the renewal date. You may then have to pay for a longer period than you need
- Any accidents or other claims made by the new driver would probably offect the no-claims bonus of the owner of the vehicle
- The policy would almost certainly have to be arranged by telephone, during office hours, which may not be as convenient as an online transaction.
Young drivers
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