Looking for temporary car insurance?

Insurance companies in Australia do not offer short-term car insurance. However, if you are looking for a week or a month’s cover, there are other options that may offer you the same benefits as short-term car insurance.

The average salary in Australia is $81 947 per annum (https://www.livingin-australia.com/salaries-australia/). The cost of an average car is $27994.  This expense may consume a high proportion of one’s spending money (https://www.moneysmart.gov.au/life-events-and-you/life-events/buying-a-car/car-buying-in-australia). When other living costs and debts are taken into account, many people may opt not to buy a car. However, they may still occasionally need the use of a car or a truck.

Normal insurance for a vehicle extends for a period of 12 months, however, temporary insurance for vehicles may be for a week, a month, or even six months. The various options for temporary insurance for a vehicle are to pay premiums monthly, adding a driver to a policy, renting a car, or for making use of a pay-as-you-drive car insurance policy.

Various options to give you temporary insurance for a vehicle

If you are only going to use a car for a few months, or your policy is going to end and you do not wish to renew it before you leave for overseas, for instance, temporary insurance for a vehicle could be useful. However, do note that if you own a car, irrespective how little use you may make of the car, you will still need to have compulsory third-party insurance.

As mentioned above, you can obtain temporary insurance for your vehicle by paying premiums monthly, adding a driver to a policy, renting a car, or making use of a pay-as-you-drive car insurance policy. Each of these options has its own benefits and drawbacks. You need to weigh these differences up to gauge which will work best for your needs.

You may want guidance on why you need the cover, for how long, and what type of car insurance to take out.

Paying premiums monthly

This approach means taking out a normal 12-month policy, thereafter opting to pay the premiums monthly. You may then cancel the policy any time before the policy ends. However, you could have to pay a cancellation fee of about $40.

Adding a driver to a policy

To save taking out a new policy, you can simply add to your car-owner’s policy the name of anyone designated to drive your vehicle. The implication is that your monthly premium may increase, based on the additional driver’s gender, age, driving history, and parking place of the vehicle. For example, if the driver is younger than 25 years, you will have to pay an excess ranging from $350 to $780 in addition to the existing premium (https://www.theguardian.com/money/2006/jun/16/personaleffects.motorinsurance).

Fronting is an illegal practice in which, for instance, a driver below the age of 25 uses an older person’s name to obtain cheaper premiums. Therefore those opting for adding on a name must be aware of the need for transparency.

Rent a car

This is an expensive option, however, the 40% of adult Australians owning a credit card (https://www.bankers.asn.au/images/uploads/ArticleDocuments/192/Credit%20Card%20Use.pdf), can rent a car. Depending on their card, they may be given rental car insurance included in the deal; or insurance may be bought from the car-rental company, although this may be expensive. 

Pay-as-you-drive policies

With this type of policy, you pay for the distance you drive, even though it is still a comprehensive car insurance policy. The price of this type of insurance normally has a minimum premium or price floor.

3          As a home parent, you too need life insurance

The common perception is that is only people who work need life insurance. This is incorrect. Besides the unemployment rate in Australia being around 5.5% (http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0), there are 2.7 million unpaid carers in Australia (http://www.abs.gov.au/ausstats/abs@.nsf/lookup/5968BE956901DD79CA257D57001F4D89?opendocument). This means that a large portion of the Australian population is vulnerable to changes that will affect them financially.

Death is never an easy matter to touch on; however, such an event can drain the family emotionally. Added to this, there is the fear that the remaining family members may not be able to survive financially, especially with the average debt to average income being 255% in the financial period 2016 to 2017 (http://www.medianet.com.au/releases/145748/). However, the role of the stay-at-home parent should not be minimised. Although such a person does not receive a monthly pay slip, his or her role has value. By having life insurance, the stay-at-home parent can ensure that family members are taken care off in the event of death or even disability.

Why life insurance policy could be right for a stay-at-home parent

The role of the stay-at-home parent is normally dismissed, simply because he or she receives no income or pay slip. However, if that parent is unable to function, for example, after becoming disabled, the household will then need to cover the costs of what that parent covered, whether day care, cleaning, cooking, and driving children to school. In addition, there will be the cost of looking after him- or herself. This may be unaffordable to the other parent.

It is not solely in the case of disability that life insurance can offer some relief. Should death occur, or parents experience critical illness or trauma, this may mean that they have to have help with their everyday activities. As such, life insurance becomes part of financial planning.

 The Salvation Army recently released a study indicating that there was a 93.3% rise in carers requesting their services ((http://www.medianet.com.au/releases/145748/). Furthermore, MoneySmart calculated that the average credit card debt in Australia is around $4200 (https://www.moneysmart.gov.au/borrowing-and-credit/credit-cards/credit-card-debt-clock).  It is therefore understandable that a lump sum would come in handy to cover this type of debt, aside from paying for medical bills and funeral costs.

How to work out the value of a stay-at-home parent

To decide how much cover is needed, use an online life-insurance calculator. For instance, if you are contemplating a 20-year policy, with a lump sum payout of $500 000, a 35-year-old woman in good health will pay around $19 each month.

What to look out for when evaluating life insurance

With various life insurance policies available, by using a comparison website such as savvy.com.au, you can easily filter through the maze to find a product that will work for you and your budget.

One aspect to take note of with term life policies, for instance, is level premiums. Level premiums imply that monthly costs will be pegged, and you can stay within your budget.

Besides spending a fixed amount monthly, make sure it’s spent wisely. Your life-insurance cover should be relevant to your circumstances. If it includes malaria cover, for instance, and you live in Southern Australia, this will be unnecessary expense. What could be relevant is to add your children to the policy − some companies allow this.