When you’ve got a courtesy car, whether you should purchase separate insurance for it depends on who has provided the vehicle. Usually, if it’s been sourced by your insurance company, you would be covered under the same terms as your regular policy – after all, you’re still paying your premium. Insurers will often have a pool of reputable lenders who they work alongside, with themselves acting as the go-between; they may also insist that your car gets fixed by an approved body rather than by someone you’ve sourced yourself.
If however, you’ve found a replacement vehicle yourself, then it may be a different story. The garage or leaser themselves may require you to buy extra insurance – after all, it’s their property, plus there could also be more stringent requirements from your insurance company.