What does a 'short-term policy' typically cover?

A short-term policy is designed to provide temporary insurance coverage, making it ideal for specific events or situations such as rentals or travel. These policies are generally used when someone needs coverage for a brief period rather than an extended one. For instance, if a person is renting a car for a weekend getaway or borrowing a friend's vehicle, a short-term policy can offer the necessary protection without the commitment of a longer-term contract.

The nature of short-term insurance means it does not commit to permanent or comprehensive coverage options, which are typically associated with long-term policies. It is structured to meet immediate needs rather than offering extensive protection for all potential risks over a prolonged duration. Thus, short-term policies effectively serve the purpose of providing flexibility and convenience for situations necessitating temporary coverage.