What is short term insurance?

What is short term insurance?

- in informational blog, Shortterm Insurance
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short term insurance

Short term insurance is a type of insurance that provides you cover for a short period, usually for a month to a year. Now, you do not need to worry about unexpected illness or injury. Short term insurance encompasses all types of insurance policies except life insurance. It includes property, vehicle, household, travel, medical, personal liability and business insurance. The insurance requirements of individuals change over time; thus, insurance for a short time is helpful in this way. You can purchase such insurance only for a time when you need it the most. In this way, you can protect your possessions and your loved ones without paying hefty premiums. 

Most individuals use short term insurance for health, home, and vehicle insurance. There are many short-term insurance providers in the UK, and every provider has its own eligibility criteria.  

The short-term Health Insurance 

Typically, short-term health insurance is available for a period of 30 to 90 days. In some cases, it is available for up to 12 months. It offers comparatively lower premium prices than the major medical plans. However, it also provides limited coverage as compared to long term health insurance policies. Typically, short-term health insurance covers you for inpatient and outpatient hospital services, unexpected injuries or illness, related x-rays, laboratory services and surgeries required for injuries. Such type of insurance acts as a buffer when you are between health plans. You can renew these policies up to three times.

What Does a Short Term Health Insurance Plan Covers?

Short term health insurance is different from major or long-term health insurance. Temporary health insurance plans do cover a wide range of benefits. They could also provide help with unexpected medical expenses resulting from different medical conditions like a fractured bone, stroke, heart attack or visiting a doctor’s office due to illness.  If you do not have insurance, you will have to pay 100% of all those bills from your own pocket. And that could cost you a lot.

Following are some of the many things a typical short term insurance plan covers:

  • Hospital room and boarding 
  • General nursing care
  • Services of surgery 
  • Intensive as well as specialised care
  • Emergency room treatment
  • Ambulance including ground and air services
  • Visits to the doctor’s office 
  • Outpatient hospital surgery or ambulatory surgical centre
  • Inpatient doctor visits
  • Anaesthetics administration

Do short term health plans cover pre-existing conditions?

Pre-existing health conditions are naturally not included in short term health insurance plans. Though, short term covers are evolving all the time to adapt to the changes in the health insurance market. So, some short-term insurance companies have started to offer some sort of coverage for pre-existing conditions of people with their short term policies.

Is pregnancy covered under short term medical policies?

Just like many pre-existing conditions, pregnancy is also one of those things that short term insurance plans do not cover. But there might be exceptions, and you could check if any plan offers cover for pregnancy, childbirth, and postnatal care.  

Are prescription drugs covered by temporary plans?

Usually, the short-term plans do not include benefits for outpatient prescription drugs. But just like in the case of pregnancy and pre-existing medical conditions, some plans do offer certain exceptions. It is always good to check if your short term health insurance plan covers prescription drugs or not before you buy any plan. 

Do short term plans cover preventive care?

Some short-term insurance plans cover some sort of preventive care. In the short term, health insurance plans are designed especially for unexpected injuries and illnesses. So, rarely preventive care is offered in their plans. 

Short term Vehicle Insurance

Temporary vehicle insurance is also known as short-term vehicle insurance. It provides cover for cars, vans and motorbikes. Typically, insurance companies offer short term car insurance that provides you with a comprehensive cover for 1 hour to 28 days. It is straightforward to purchase a policy and protect your car in case of emergencies when you do not have annual car insurance. A significant benefit of such insurance is that it will not affect your no-claims bonus. 

In order to qualify for short-term insurance, there are a few prerequisites that you ought to meet. 

As the driver, you must:

You must be of ages between 18 and 75 (minimum age can vary depending upon certain situations)

You should hold a current as well as valid, full, EEA, UK, South African, EU, Swiss, Australian or New Zealand driving license. And must have been a license holder for at least the past six months. For people above the age of 25, they must be license holders for at least three months. 

You need to have a current permanent address (you will be asked to provide proof of residence in the event of a claim).

There should have been no more than one fault claim in the past year. 

There should have been no more than nine penalty points as well as no disqualifications in the past 18 months.

You must have no history of motoring offence in the past three years under the Conviction Offence Code prefixes UT, DR, DG,  CD, or DD.

You must have no history of motoring offence in the past six months under the Conviction Offence Code prefix CU80 or IN.

You must not have any unspent criminal convictions (these are excluding of motor offences)

You should have permission from the owner of the car to drive the vehicle and have it insured. Also, taking responsibility for loss or damage.

The car must meet the following requirements:

  • The vehicle must be registered in Great Britain, Northern Ireland, or the Isle of Man.
  • The care should have a current market value of less than £75,000
  • Your car should not have more than eight seats (this includes the driver’s seat as well)
  • Your vehicle should not be a hire or rental vehicle. It should also be not leased under an agreement of 12 months or a lesser duration
  • Your vehicle must not be seized or in a police compound while you buy a short-term car insurance plan.
  • Has an engine size of 3999cc or less

These are some of the requirements that almost all short-term insurance plans require. If you do not meet these requirements, it is always good to search the market for other insurance plans. 

Short term vehicle insurance plans are best suited for:

Young Drivers:

If you are a young driver and do not have a car of your own but have access to a relative or friend’s car, short term insurance can be ideal for you. You can buy the insurance for a term of your choice at any time of the year. 

New car buyers:

If you have just bought a car and have not arranged for longer-term insurance yet, short-term insurance will be your best choice to go for. It will provide a temporary cover to your vehicle till you buy another insurance. 

Car shoppers:

Short term insurance is great for people who are potential car buyers and are testing the car. This will provide you with a cover for your test drive. 

Car enthusiasts:

If you own a convertible or sports car and are lending it to a peer for a short time, make sure to get it insured for that period. 

Home movers:

If you are moving home and you need to borrow a larger car or van for the purpose, you could arrange one-day short term insurance to cover your travel needs.

Road trip lovers:

If you want to borrow or rent a car for a good road trip, it is always advisable to get short-term insurance.  

An emergency situation:

If you need to drive a friend or relative’s car in an emergency, you can also get it covered through short term insurance. Keep in mind that short term vehicle insurance can last as short as a few hours to several months.

Short Term Home Insurance 

Short term home insurance policies cover your home if it is unoccupied for more than thirty days. Mostly the standard home insurance policies do not protect a home that is vacant for more than 30 days. In this case, you need to purchase temporary home insurance. There are several reasons people need to leave their home unoccupied, such as going for a trip, doing construction work or planning a move. Thus, insurance for an unoccupied home is essential if you want to protect your home and possessions. You can purchase temporary insurance just for the months you need. However, premiums for short term home insurance are more expensive than the standard home insurance. 

There are many reasons why you would want to buy short-term home insurance. Some common reasons include:

  • You might want to have your house temporarily covered under short term insurance while you go on a long holiday.
  • You are having major renovations on your house, and thus, you need to vacate the premises of your home temporarily.
  • Your previous tenants have left the property, and there is a gap between till your new tenants move in.
  • You might have moved to a new house. But you are still waiting to sell your old house, which is currently unoccupied.
  • You have bought a new home, but you have not yet moved in.

If your reason is any of these, you might consider buying short-term house insurance. If you are away from your home for more than 30 days, it is very likely that your current home insurance will not be valid. And you would miss out on the provision of cover in case of an accident, robbery, theft, or arsenal. But if you have bought a term insurance policy, you will be protected against the damage.

Some short-term policies ask you or anyone you trust to consistently visit the property and make sure that nothing major has happened to it. It is very important that you stick to these rules because otherwise, you might be risking the validity of your claim. 

Short term home insurance plans can be bought for one week and usually last for a three, six, nine or 12-month period. This depends upon the type of plan you chose. 

What does a short term home insurance policy cover?

Any good short term home insurance policy will provide you with the same cover as any other standard home insurance policy. The only difference is that it lasts for a shorter period of time. A short-term home insurance policy covers the following:

Temporary buildings insurance: 

It covers the cost of fixtures and renovations. And it also includes repairing the damage done by natural disasters such as a hurricane, storm, flood, lightning as well as in cases of arsenal or theft. 

Temporary contents insurance: 

It includes the cost of replacing and repairing the items that you have in your unoccupied home.

Property owner’s liability: 

Your insurance will protect you from third party claims. They could include injury, loss or damage of someone’s property because of yours. This is especially helpful in the case of home renovations.

Legal expenses: 

Your short term home insurance will cover your legal expenses related to your home as well. This includes the legal fees required to protect your home.

How Does Short-term Insurance Work?

The amount that you pay to your insurance provider at predetermined intervals is known as a premium. This amount works according to the risk profile of individuals. For instance, when you go to an insurer to purchase an insurance policy, he will investigate your age, personal identity, income source, financial history and the value of the asset you want to insure. On the basis of these factors, your premium is decided. The higher your risk profile, the more will be your premium. 

The Essentials of Short-Term Insurance

A short-term insurance policy provides you with extensive cover for any financial risks to your material possessions. Just like stated above, these things can be your vehicle, a valuable asset, your home, or even your health. Short-term insurance is an agreement between the client and the insurance company that stays put for a set amount of time. You can choose the term of your insurance yourself depending upon your requirements, circumstances and budget. You pay a certain amount of money each month which are called premiums. So, in case of any damage or accident, the insurance company will cover its cost. Premiums depend upon your risk profile. There are many factors such as age, history etc, which contribute to your risk profile. 

Factors that determine your premiums include:

  • Your age
  • Gender (not all the time)
  • The value of the asset
  • Time
  • if the asset was secured/ protected 

If your risk profile is higher, you will have to pay greater premiums.  Therefore, choosing the right policy is very important.

Advantages and Disadvantages of Short-term Insurance:

Short term insurance has many benefits, such as it has an easy application process, and you will get quick access to the cash after making a claim. It is more flexible than traditional long-term insurance. Moreover, it can help people who can not afford annual insurance. One more advantage of short-term insurance is that if your insurance needs changes over time, you do not need to pay an extra fee for an amendment like your annual policy. You can purchase a new insurance policy for a short time. 

Although temporary insurance is beneficial, it has another side that you should be aware of. It offers limited coverage, and mostly you can not renew your policy. 

Before purchasing short term insurance, you must keep in mind both the positive and negative aspects so you can make a better decision. Furthermore, choose the reputable and trusted short term insurance provider to get maximum benefits at a competitive price. You can visit our comparison page to get information about the UK’s top short-term insurance providers

One question that is very frequently asked is what is the difference between long term and short term insurance. We are going to unwrap the contents of both these policies to give you a better understanding of both of them:

Difference between Short-Term and Long-Term insurance:

A Long-term insurance policy refers to insurance that is directly related to people and life-changing events. In simpler words, long term insurance is for retirement, death, and disability.

For long-term insurance, you have to pay a monthly premium to an insurance provider or your insurance company. This makes you eligible for receiving money in case of a life-changing event which may include retirement, disability or death (funeral cover). This insurance provides you cover when it is needed the most. 

On the other hand, short-term insurance is quite different from long term insurance. It provides you with a cover for your insured possessions, such as your car. You can also have short-term insurance for your health, home and vehicle etc., which are usually covered in long term insurance under special circumstances.

Long term and short term insurance policies do not always depend upon the length of time. Instead, the fact is that long-term insurance covers life and people, whereas short term insurance covers objects and possessions.

Before buying any insurance policy, make sure that you have done your research. And ask the insurance provider any questions you have to clear up doubts.

 

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