Month-to-month car insurance in Canada: What to know

Disclaimer: Please note that BrokerLink does not offer car insurance policies for terms less than one year. This article is intended for informational and learning purposes, and is not a description of a product we offer.

Month-to-month car insurance is exactly what it sounds like: auto coverage you pay for on a monthly basis. Unlike traditional policies, which usually lock you into a six or twelve month term, this type of insurance gives you short-term protection without a long-term commitment.

It’s often used by people who only need coverage for a limited time. For example, if you’re a student home for the summer, a tourist, or someone borrowing a car temporarily, a month-to-month policy might seem like the perfect fit.

But while this sounds very convenient, there's one problem. True month-to-month car insurance isn’t available in Canada. Most provinces don’t allow it, and insurance companies tend to prefer set terms.

Still, there are alternatives worth exploring, like temporary special permits, rental car insurance, and short-term car insurance policies from certain brokers. Let’s take a closer look.

When might drivers consider purchasing temporary car insurance?

There are several situations where short-term or temporary car insurance coverage makes sense. The following is a list of circumstances in which drivers might find temporary car insurance worthwhile:

• You recently bought a used car.

• You are travelling to Canada and only staying for a few weeks or months.

• You are transferring ownership of your car to another driver, and the current licence plate being used is short-term.

• You only drive your vehicle seasonally and occasionally, like a collectible car or vintage motorcycle that you only drive during the summer.

• You are a student who has returned home for the summer, and therefore, you only require car insurance for four months.

• You are buying a travel trailer, such as an RV, to take on road trips, and thus, you only need auto insurance when you are on vacation.

If your driving situation is short-term or transitional, temporary coverage might be a practical solution, as long as it’s available in your province.

What are the pros and cons of month-to-month car insurance?

If you’re thinking about month-to-month car insurance, it’s important to weigh the benefits against the drawbacks.

Is month-to-month car insurance available in Canada?

No, month-to-month car insurance is generally not available in Canada. Most provinces require a minimum policy term of six months or more, with car insurance in Ontario being particularly restrictive. However, some provinces offer options like temporary permits. Below is a breakdown of temporary auto insurance availability in Canada:

What does temporary auto insurance cover?

When available, temporary car insurance typically includes the same core protections as a standard policy. The main difference is how long the coverage lasts, not what it includes. These short-term policies are designed to give you essential protection for a limited time, whether you’re driving a borrowed car, a seasonal vehicle, or a new purchase.

According to the Insurance Bureau of Canada (IBC), here’s what’s usually covered under an auto insurance policy, depending on where you live in Canada:

Third-party liability coverage

This protects you if you're found at fault for a collision that causes property damage, injuries, or death. Liability coverage is mandatory in every province and helps cover legal fees, medical bills, and repair costs for others involved.

Accident benefits coverage

No matter who’s at fault, this covers medical expenses, rehab, attendant care, caregiver support, income replacement, and other benefits if you're injured in a crash.

Direct compensation–property damage (DCPD)

In no-fault provinces like Ontario, if you're not at fault in a collision, your insurer will pay for your vehicle damage under DCPD instead of having to go through the other driver's insurance.

Uninsured motorist coverage

If you're hit by someone who doesn't have insurance, doesn’t have enough, or you're involved in a hit and run, this covers your injuries and damages.

Collision coverage (optional)

Collision coverage pays to repair or replace your vehicle if it's damaged in a crash, either by another vehicle or a stationary object, regardless of who’s at fault.

Comprehensive coverage (optional)

Comprehensive coverage covers non-collision damage like theft, vandalism, fire, falling objects, and weather-related events.

Accident benefits coverage (optional)

Accident forgiveness can help protect your driving record and help prevent your insurance premiums from increasing after your first at-fault accident claim.

Keep in mind, not all temporary policies include optional coverages like collision, comprehensive, or accident benefits by default, especially for short-term use like driving a borrowed car or trailer. If you need extra protection, talk to your insurance company or insurance broker.

How much do temporary car insurance policies cost?

Temporary car insurance plans can vary widely in cost depending on your personal circumstances and where you live. Just like with standard auto insurance, there’s no one-size-fits-all rate.

In provinces where short-term coverage is offered, prices are typically calculated based on:

• The type of vehicle you’re insuring

• Your age and driving history

• Where you live

• How much coverage you choose

• Your claims history

• The length of the policy (e.g., 30 days, six months)

For example, according to SGI, a one-day permit in Saskatchewan costs $26.66. MPI states that a Temporary Registration Permit in Manitoba varies in cost depending on the number of days the permit is valid. British Columbia and Quebec also offer temporary permits through their provincial systems, but rates vary based on vehicle type and insurance needs.

It’s also worth noting that temporary insurance can sometimes be more expensive per day than a traditional policy because you’re paying for flexibility. Contact BrokerLink today to speak with a licensed insurance broker who can help you understand your options.

How do you purchase temporary car insurance in Canada?

Buying temporary car insurance in Canada depends heavily on where you live, since not all provinces allow short-term policies. In provinces where it is available, like British Columbia, Manitoba, Saskatchewan, and Quebec, the process usually involves applying through your provincial insurance authority or an authorized broker. Here’s a general step-by-step to help you purchase temporary car insurance:

1. Check that it's available in your province

2. Contact a licensed insurance broker, insurance provider, or visit your local service centre

3. Provide any required documents, like your driver's licence and proof of ownership

4. Select your coverage and term length

Alternative insurance options to temporary car insurance in Canada

If you live in one of the many provinces that do not offer temporary car insurance, you still have a few options:

MyPace pay-as-you-go insurance

If you don’t drive often, a great alternative to temporary car insurance is the MyPace program from the Canadian Automobile Association (CAA). It’s a pay-as-you-go insurance option designed for anyone who drives under 9,000 kilometres per year.

Once you enroll, a small device is installed in your car to track how much you drive. Your car insurance premium is then adjusted based on your actual mileage. So even if you're not on the road much, you’re not stuck paying the same rate as someone who drives daily.

You’ll still need a valid insurance policy in place to use MyPace. But for people who work from home, own a second car, or only drive seasonally, it can be a great way to save money without sacrificing coverage. Unlike other usage-based insurance programs that monitor your speed, braking, or habits, MyPace is focused purely on distance.

Cancel your car insurance policy early

Another option, though not always ideal, is to cancel your car insurance policy before the term ends. Since most car insurance providers only offer six- or twelve-month policies, some drivers buy a standard policy and then cancel it after just a few months, depending on how long they actually need coverage.

While you're allowed to cancel your insurance at any time, you will likely have to pay cancellation fees. These can be steep, and they vary between insurance providers, so it’s a good idea to talk to an insurance broker first to understand what it might cost you.

Also, if you're planning to cancel but still intend to drive afterward, make sure you have another policy lined up to start the same day your current one ends. Any gap in coverage, even for just a single day, can lead to serious problems later on, like being uninsured on the road or facing higher premiums in the future.

Add an endorsement to your policy

Another option to help reduce costs during the off-season, but without cancelling your policy completely, is to add an endorsement to your policy, like the Ontario Policy Change Form (OPCF) 16 in Ontario and the Standard Endorsement Form (SEF) 16 in Alberta. These endorsements let you temporarily remove certain road coverages (like liability or accident benefits) while your car isn’t being driven. That way, you’re not paying for coverage you don’t need, but you still keep your policy active.

It’s usually not recommended to cancel your insurance during storage. Even when your car is off the road, it’s still vulnerable to risks like:

• Theft

• Vandalism

• Fire

• Water damage

• Falling objects

By keeping comprehensive coverage in place year-round, you’ll have protection against these non-collision threats. Speak to your local BrokerLink broker to learn more about endorsements available in your province.

Ask to be added to an existing car insurance policy

Depending on your situation, asking to be added as a driver to an existing car insurance policy could be a solution. For example, if you are borrowing a car from a friend or family member for a temporary period, find out if they would be willing to name you in their policy. This might increase the cost of their coverage, but it would ensure you were covered while driving their car, which is important if you plan to drive it regularly, and allow you to avoid purchasing your own policy.

Rent a car

One final alternative to purchasing temporary car insurance is renting a car. Renting a car is typically more expensive. However, with a rental car, you would be able to purchase short-term rental car coverage directly from the rental car company without having to pay any cancellation fees.

Learn more about car insurance with BrokerLink

Temporary car insurance isn’t easy to come by in Canada. Many insurance companies avoid offering it altogether, or they attach stricter conditions, because these short-term policies tend to attract higher-risk drivers. That’s where working with an insurance broker, like BrokerLink, can really make a difference. We’ll walk you through what options actually exist in your province and help you explore alternatives that can still save you money.

You can reach us by phone, email, or in person at any one of our locations throughout Canada. No matter how you choose to get in touch, a BrokerLink insurance advisor will be happy to assist you. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.

Get an auto insurance quote

FAQs on month-to-month car insurance

Is an annual car insurance policy cheaper than temporary car insurance?

Temporary car insurance might be the most cost-effective option if you only need car insurance for a number of hours, days, or weeks. However, if you need car insurance for over a month, it would likely make more sense to purchase an annual car insurance policy and cancel it early. Shop around to find a policy with no or minimal cancellation fees and to ensure you get the most competitive rate for your coverage.

Do I need temporary car insurance if I have homes in two different provinces?

If you are frequently driving between two provinces in Canada, temporary car insurance likely will not be required, so long as your auto insurance policy meets the minimum coverage requirements in both provinces.

I am a student who is studying outside my home province. Do I need temporary car insurance?

Students who are away from home temporarily for school likely do not need to purchase a separate temporary car insurance policy. Rather, if your permanent address is still your parent’s home address, you can continue receiving coverage in your home province. Most insurance providers allow post-secondary students to remain covered according to their home address rather than their school address, though we recommend confirming this with your insurance company directly.

Do I need temporary car insurance for my RV?

If you are going on a vacation in your RV and only need insurance for a short period of time, contact your insurance company and ask about your options. Some insurers offer part-time RV insurance for campers, trailers, and caravans since it is common for these vehicles to only be driven for part of the year.

Does my car insurance policy cover a rental car?

Some car insurance policies cover rental cars but others do not. If you have basic coverage, chances are it doesn’t. Thus, if you choose to rent a car, you will need to purchase rental car insurance from the rental car company. You may also get rental car insurance through your credit card company, though you will need to verify this with them.

Do I need short term car insurance if I'm borrowing a friend’s car for a couple of days?

Typically, no. Short term car insurance would not be required in such an instance. If the owner of the vehicle has given you permission to drive and has their own valid car insurance plan, then you should be covered by their policy. That said, it would be wise to check with your insurance company directly before lending out your vehicle. Oftentimes, when a vehicle is lent it means that you are also lending your insurance, so in the event that something were to take place, your policy would respond to cover the damages, not the policy of the person driving the vehicle.

Can I get a one-week car insurance policy?

Some temporary car insurance plans may offer coverage for one week or less. However, you will need to shop around to find a provider that will offer this, as this is not standard. If you only need a vehicle for one week and you do not own the vehicle, renting a car and purchasing rental car insurance for that one week might be a better idea.

How can I add someone to an existing car insurance policy?

If you decide that you would like to add another driver to your car insurance policy rather than purchase a separate temporary car insurance plan, you can do so by contacting your insurance provider. You can typically add another driver to your policy online, over the phone, or in person at an insurance office. Be prepared to provide information about this driver.

Does temporary car insurance coverage begin immediately?

Yes, just like with a traditional car insurance plan, temporary car insurance plans can begin immediately or on the date you select. However, there may be a waiting period to make a claim, especially for optional coverages like comprehensive and collision coverage.

How long does short term car insurance last?

Short term car insurance policies vary in length, though you can expect them to have terms shorter than the typical 12 months.

Can I drive without car insurance in Canada?

No, you cannot drive without car insurance anywhere in Canada, whether you live in Prince Edward Island, British Columbia, or anywhere in between. Car insurance is a legal requirement throughout Canada, which means choosing to drive without it is illegal. Penalties for uninsured driving vary between provinces but may include fines of up to $50,000, jail time, having your vehicle impounded, and having your driver’s licence temporarily suspended. Please note that the consequences for driving without insurance only increase the more times you are caught. Given these very serious consequences, driving without insurance is not worth it. Thus, before you get behind the wheel, make sure you have a valid car insurance policy that meets the minimum coverage requirements in your province.

Do I need temporary car insurance when renting a car?

If you are renting a car, then you can likely purchase rental car coverage directly from the rental car company, which will be cheaper and less of a hassle than trying to purchase a separate temporary car insurance policy. If you already have a traditional car insurance plan, it might even cover rental cars. Some credit cards also have perks such as rental car coverage when travelling.

If you have any questions, contact one of our local branches.