No Contract Auto Insurance

No-contract auto insurance is often called month-to-month auto insurance or short-term auto insurance. Assurance, Esurance, and Progressive carry temporary auto insurance policies.

UPDATED: Apr 20, 2022Fact Checked

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Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Written by Sara Routhier
Director of Outreach Sara Routhier

Cynthia Lanctot is an insurance professional with ten years of industry experience. Cynthia is licensed in several states, and holds an associate in claims law, as well as a bachelor’s degree in English. Cynthia’s experience includes the New England and Northeast states. She currently works as a liability claims professional and an occasional online contributor.

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Reviewed by Cynthia Lanctot
Licensed Agent Cynthia Lanctot

UPDATED: Apr 20, 2022

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A Concise Overview

  • No-contract auto insurance is short-term auto insurance that lasts for one month
  • Temporary auto insurance is necessary if a policy is canceled or an insurance company liquidates
  • Short-term auto insurance ends when you stop paying

Major auto insurance companies require customers to enter a six-month or 12-month contract. However, some companies offer no-contract auto insurance or month-to-month auto insurance.

What are the benefits of no-contract auto insurance? Is no-contract car insurance the same as monthly car insurance? How do you find the best rates on a no-contract plan? These are great questions to ask, especially if you’re someone who wants to pay month by month for car insurance.

Continue reading to learn how no-contract car insurance works and how to buy auto insurance for a short period of time.

How can you save money with no-contract auto insurance? Enter your ZIP code in our free comparison tool to see what companies in your local area offer no-contract auto insurance.

What is no-contract auto insurance?

How does no-contract auto insurance work? No-contract auto insurance is insurance with no strings attached, which lasts for one month. No-contract auto insurance is known as short-term auto insurance or month-to-month auto insurance.

California Department of Insurance calls short-term auto insurance a “binder.”

A “binder” is a short-term agreement that provides temporary auto coverage, but is usually a precursor to a full policy while it’s in underwriting. Temporary auto insurance is necessary if an auto insurance policy cancels or if an insurance company liquidates. Most of the time, customers are looking for cheap auto insurance options and wish to switch companies.

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Can you get six-month auto insurance?

The shortest term for big insurance companies is six months. Six-month policies are halved annual rates. Customers can renew their policies or pick another auto insurance company. Before you purchase an auto insurance policy, you’ll choose between a six-month policy or a 12-month policy. According to the Insurance Information Institute, most auto insurance policies last six months to a year.

What is the cheapest online car insurance?

So who offers the cheapest car insurance? Cheap car insurance depends on several factors that determine coverage. The fastest way to get an auto insurance policy is to get auto insurance online. You can get car insurance quotes almost instantly. But which company offers affordable auto insurance? Here are some annual rates from the top-10 auto insurance companies in the United States.

Average Auto Insurance Rates of the Top 10 Auto Insurance Companies
CompaniesAverage Annual RatesAverage Six-Month RatesAverage Monthly Rates
American Family$3,443$1,722$287
Liberty Mutual$6,096$3,048$508
State Farm$3,268$1,634$272
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Six-month rates are half of the annual rate. USAA, GEICO, and State Farm are the cheapest auto insurance companies.

Do major companies like GEICO offer temporary auto insurance? It’s possible. You’ll need to contact a GEICO insurance agent to get your answer. Some services aren’t advertised on television or on websites. Auto insurance agents at the company can connect you to other services.

Can you cancel your insurance policy at any time?

Yes.  You can cancel whenever you want. No-contract auto insurance makes it easier for you to cancel auto insurance. Short-term auto insurance ends when you stop paying, or when you tell the auto insurance company that you’re moving on.

Standard auto insurance policies may come with a cancellation fee of $25 or more. Some companies may issue something called a short-rate fee. According to New York’s state law, a short-rate fee is calculating the return rate on a policy. Sometimes that rate could be 10 percent of the remaining policy balance.

This is what makes shorter term policies fairly popular. Prices change, circumstances become different than when a driver first signed up with a company, and so they may want to look elsewhere. There are some comforts that come with buying a full year, but that isn’t always the case.

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How much is insurance a month for a 17-year-old?

According to the National Highway Traffic Safety Administration (NHTSA), teen drivers have a higher rate of encountering fatal crashes.  Teens are statistically more likely to get in an accident. Auto insurance companies issue higher than average auto insurance rates. Let’s look at auto insurance rates based on age, gender, and marital status.

Average Annual Auto Insurance Rates by Age, Gender, and Marital Status
CompaniesSingle 17-Year-Old Female RatesSingle 17-Year-Old Male RatesSingle 25-Year-Old Female RatesSingle 25-Year-Old Male RatesMarried 35-Year-Old Female RatesMarried 35-Year-Old Male RatesMarried 60-Year-Old Female RatesMarried 60-Year-Old Male Rates
State Farm$5,954$7,324$2,336$2,555$2,082$2,082$1,874$1,874
American Family$5,997$8,131$2,289$2,695$2,203$2,224$1,993$2,014
Liberty Mutual$11,621$13,719$3,960$4,503$3,803$3,857$3,445$3,681
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Other drivers pay much less for auto insurance, but teen drivers pay thousands more. Parents who insure teen drivers need non-owner car insurance. Take advantage of policy discounts to cut expensive teen auto insurance.

How can I get non-owners insurance?

If you have a teenage driver and need to add non-owner auto insurance, your insurance agent should be able to help you out.

Can you insure a car for just one month?

How does monthly auto insurance work? Month-to-month insurance allows you to pay for auto insurance without having a contract. Active service depends on whether you’re making the monthly payments. You may not get the same perks as standard auto insurance.

What companies offer no-contract auto insurance? Only certain companies. Assurance, Esurance,  and Progressive carry temporary auto insurance policies.

Make sure the auto insurance policy doesn’t have any cancellation fees. Georgia’s state law requires drivers to cancel vehicle registration before they cancel auto insurance.

Should you compare rates on regular car insurance instead of temporary no-contract coverage? Absolutely, and we can help. Start shopping for auto insurance in your local area now with our FREE comparison tool. Enter your ZIP code now.

Frequently Asked Questions: No-Contract Insurance

Let’s recap what we’ve learned in this article. We’ll use this section to answer commonly asked questions that you see on search engines across the internet. For more articles like this, visit our main page for more information.

#1 – Can you buy auto insurance without a contract?

You can only get no-contract insurance with a company that offers it. You can cancel your auto insurance policy, but it may come with a penalty.

#2 – Where can I find cheap monthly car insurance?

Shop around for cheap vehicle insurance rates. The cost of insurance depends on your age, gender, vehicle, location, and driving record.

#3 – What are the pros and cons of no-contract auto insurance?

The biggest pro of no-contract auto insurance is that you are not locked in for a certain amount of time. You pay as you go. The cons are less available options.

#4 – What is PLPD insurance?

PLPD stands for Personal Liability and Property Damage insurance. If you are wondering about PLPD vs. full coverage cost, full coverage rates will be higher.

#5 – Is no-contract car insurance legal?

Yes, it is legal but, as stated above, only in certain circumstances.



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