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Monthly car insurance: ideal for temporary drivers
Most drivers insure their car on an annual basis, paying either a single lump sum to cover the whole year or spreading the cost in monthly instalments. However, there may be occasions when you need short term insurance and your requirements cannot be met by a standard car insurance policy.
What is monthly car insurance?
Many insurance companies offer short term insurance, usually for periods of between 1 and 28 days. It is intended to cover use of a car for a limited period and means you are not paying for car insurance when you don’t need it.
When would monthly car insurance be appropriate?
There may be occasions when you want to borrow the car of a friend or relative for a short period, or someone wants to borrow your car. Or perhaps you and a couple of friends are going on a long road trip and want to share the driving.
The immediate thought in one of these situations is for the short term driver to be added temporarily as a named driver to the car owner’s annual insurance policy. This is entirely legal and normal and, provided the person wanting to be added as the named driver fulfils all the criteria of the car owner’s insurance policy regarding age, driving experience and driving convictions, it should be a straightforward transaction.
However, having an extra named driver on an insurance policy comes with some disadvantages and risks. Not only could it be expensive, but it could have a long term impact on the car owner’s future insurance premiums.
If you or a friend or relative are driving as a named driver and you have an accident, any claims are made against the car owner’s insurance policy, even if he or she wasn’t driving at the time and was not at fault. This could affect the car owner’s no claims bonus and is likely to lead to higher insurance premiums in the future.
Can anyone take out monthly car insurance?
Insurance companies tend to impose more restrictions on monthly car insurance. There is usually a higher minimum age for the driver, often 21, and commonly the insurers require a clean driver’s licence. If the driver has a history of motoring convictions or insurance claims they may be turned away.
When is monthly car insurance NOT appropriate?
Taking out monthly car insurance is not an alternative to buying an annual insurance policy for your car. Whilst you can still shop around for the best deal, buying a series of monthly insurance cover policies will work out much more expensive than an annual policy.
If you have a car you drive only occasionally you may be tempted to take out monthly car insurance policies to cover those occasional drives. However, this would be illegal. The car would be uninsured in those periods in between and would therefore need to be registered as being kept off the road with the DVLA.