For decades car insurance has been bought 12 months in advance. This suited the insurance companies; they had the money from the policy right from the start and were able to invest it and make a decent return on their investments. That all changed with the coming of the computer.
Working out premiums was a very time consuming task in the early days and this added to costs considerably. Computerising the whole process not only meant that the whole process of creating and delivering a quote could be done in a fraction of a second, but it also meant that not only could yearly premiums be worked out, but also the costs for other time periods too. It was not long before short term car insurance policies started being issued; cheap temporary car insurance had become a reality.
At the same time a new generation was growing up, with fresh ideas. Young people found the cost of insuring a car was often well beyond their means; but many started to wonder whether or not they really needed one! After all a car spends most of it's life sat parked up, whilst a combination of road salt and rain water eats away at the metal; and maintenance costs are not cheap with such highly technical machines! borrowing a car from time to time, and relying on a short term policy, started to make good sense. Particularly when, thanks to companies like Uber, the cost of taxi transport was falling.
It was not long before car sharing clubs and apps started to arrive. Rather than pay out a lot of money for a car, and watch it deteriorate in value whilst paying out for very high insurance rates, many millennials now choose to simply have use of a car when it suits them, insuring it just for a few days or even a few hours. With the salf driving car on the horizon, the need for insurance may evaporate completely; and it might be a good time to sell any shares you may have in insurance companies!