If your trip planning “to-do” list doesn’t have “short term car insurance policy” written on it, you’re in good company.  We generally don’t think twice about whether we’ll have auto insurance coverage while we’re driving a rental or loaner car, but it’s smart to make sure you’ll be insured.

Determining exactly when you need to look in to purchasing a short term car insurance policy can be a little confusing.  We’ll hopefully clear up some of that confusion.

If you already have a car insurance policy with liability, car damages, and personal injury provisions, you’re probably also covered for at least liability and personal injury expenses that might stem from an accident you’re involved in while driving someone else’s car.  Most car insurance policies contain a temporary car insurance clause or provision that insures you for accidents that happen while you’re driving a car belonging to someone else.  If this is the case with your car insurance policy, you can happily decline the rental car agency’s overpriced liability insurance offer without any hesitation.

If you don’t currently have a car insurance policy, then you’ll definitely need to arrange for temporary car insurance before you rent or borrow a vehicle.  If you’re borrowing, your friend’s policy will probably protect him or her from damages should you have an accident in his or her car, but your friend’s car insurance probably does not extend liability coverage to you.  You should set up a term car insurance policy that will cover you for those two items (personal injury and liability), which are usually the most expensive car accident expenses.

If you’re pressed for time  at the rental agency checkout counter, and need short term car insurance right away, you can purchase their temporary car insurance policy. But their insurance prices are among the worst in the industry, so you might consider looking in to another provider.