There is a kid in college who wants to insure his car for 30 days – long enough for his holiday break from school. He does not want insurance any longer than the break. Can he get it?
Probably not. Insurance companies cannot rate you for 30 days. They can rate you for six months – or a year. (There is some value to getting a year long policy instead of a six month policy. CSAA offers one year policies.) But, 30 days is too short of a period of time. And, no, they cannot take the premium and divide by 6 to get the monthly premium.
There are several reasons why this does not work. First, the policy is expensive to write. The Department of Insurance does not let them write a policy less than 6 months. The agent receives about half of the premium for commission. So, on a six month policy of $300, the agent receives $150. If the policy were only for 30 days, the agent would get all of the money. The insurance company also has underwriting expenses as well. Second, the insurance company is taking all of the risk. If you are in an accident, they will pay out several times more than you ever pay in. While I do not have a problem with them paying out, it is not a good business model.
So, what can this kid do? He can get a 6 month or 1 year policy. This way, even if he is not driving his own car, he will be sure that he is covered if he is involved in an accident. This is the safest way to get insurance.