Short Term Car Insurance

and how it evolved

I was brought up in an era when short-term car insurance simply didn’t exist. Much of the reason for that is because although computers did exist they cost millions of pounds, required dust free and temperature and humidity control atmospheres, and filled a small warehouse. The coming of the personal computer change many things, not least of all car insurance, and made temporary policies possible.

In those far-off days short-term car insurance companies like didn’t exist. To buy a policy for a car we would go down to a broker who would take our details and promise to get back to us. The broker would then ring around several insurers to see who wanted to take the policy on. A few days later this person would send us a quote or several quotations then we would revisit the office, pay for a year’s insurance and go happily on our way. The broker would take a commission from the premium and pass the rest onto the underwriter.

The whole operation was time-consuming and expensive. It was worth the while of the broker and the insurer because the premiums were substantial enough to make it an economical proposition; but asking for a policy for just a few days was a complete waste of time. It would probably take the broker longer to arrange temporary cover than it would to set up a conventional 12 month policy and someone would have to pay for that extra time.

Come the day of the universal computer and all things changed. Up until then IBM had ruled the roost; and initially personal computers were known as IBM – compatible PCs. Then Microsoft came along, realising that the real money lay not so much in selling the hardware, but selling the programs which up until then IBM had practically given away. Others jumped on the bandwagon; we started by having simple computer games available (everybody wanted to buy space invaders!) But then more sophisticated programs such as word processors and spreadsheets proliferated. It was inevitable that sooner or later someone would invent car insurance price comparison systems.

The system could be automated very cheaply, from creating quotations based on accumulated statystical data to actually issuing the policy. All of a sudden it was possible to not only arrange multiple quotations simultaneously but they could also be broken down into short-term policies. Instead of having no choice but buying a policy for a full year it was possible to buy one for a month, a week, a day, and now it is possible to even split that down to a few hours. Short-term car insurance companies proliferated.

We are now assured that the day of the driverless car is almost upon us; instead of owning our own vehicles in the future we may simply call one up whenever we need one using our mobile phone. Car insurance may become almost overnight a thing of the past, together with drunken driving and speeding convictions. Oh what would I give for a crystal ball!