Car Insurance in Foreign Countries: Everything You Need to KnowCar Insurance in Foreign Countries
Between packing, sight-seeing, dining, and making memories, the last thing on your mind while you’re traveling in a foreign country is going to be car insurance, until you need it. You may not expect to include a photo of your fender bender in your vacation scrapbook, but car damage is always a risk when you drive, no matter where you are. And while it may be funny to joke about not being able to drive on the left side of the road or read foreign traffic signs, these excuses don’t help when it comes time to file a claim.
Because vacationing in a foreign country doesn’t usually come with automatic coverage from your auto insurance policy, you need answers and solutions to ensure you’re protected while in another country. While providing and obtaining all the documentation needed for an auto insurance transaction overseas may seem difficult and confusing, with the right amount of research and assistance from our insurance agents, you can find exactly what you need to make your trip run as smoothly as possible.
What are the basics of overseas car insurance regulations?
To take the first step toward securing car insurance for your international travels, call your insurance company to find out exactly what type of coverage you should have. You can then do the research you need ahead of time to save you money, time, and hassle. Waiting to secure insurance until you arrive can mean issues with language barriers, exchange rates, and even jetlag, plus you may miss out on the price comparisons and hidden discounts that you only get by preplanning.
In addition to coverage research, acquiring car insurance starts with a valid driver’s license. While many English-speaking countries will allow you to get by with an American driver’s license, many others will require you to obtain an International Driving Permit. This permit translates your information into 10 different languages, 150 countries recognize it, and it is important to have to present along with your official state license when needed. Obtain an authorized permit from either the American Automobile Association (AAA) or the National Automobile Club, but be wary of other companies or organizations who arrange them because they are sometimes fakes.
Credit card companies offer another option for securing car insurance in a foreign country, as many of them, including the four major credit card networks, often provide qualifying cardholders with some form of insurance that covers renting a vehicle internationally. However, you need to check your agreement carefully, as many exceptions apply for different countries. For example, MasterCard won’t allow you to drive on unpaved roads, and some card companies do not insure cars at all in certain countries. For instance, American Express disqualifies cars in Italy, Australia, and New Zealand.
It is crucial to understand that every country has its own laws and requirements for drivers and insurance. Let us help you research the laws and requirements that country expects you to abide by before leaving for your vacation.
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What are the car insurance requirements in North America?
The two most accessible countries for U.S. drivers, Canada and Mexico have laws and requirements that are worth knowing before taking that trip across the border.
Mexico, for example, does not accept U.S. car insurance, which means that the government mandates that you purchase international car insurance from an authorized Mexican auto insurance company. To purchase this insurance, you’ll need a photocopy of the current registration of the vehicle(s) you plan to insure, your state driver’s license, and an International Driving Permit if you drive 300 miles or more into the country. (For more information, read our “Understanding Car Registration: Do You Need Insurance?“).
If you finance, lease, or borrow a vehicle, you need a notarized document from that person or company to authorize that you can drive that vehicle into Mexico. You also typically need a variety of pieces of information about the car, coverage details, the trip itself, and more, details for which you can find at DMV.org. At the very least, you need to purchase liability coverage as Mexico’s national laws mandate, but you can buy more if you think it might be necessary.
Renting and driving your own vehicle in Canada requires you to jump through less hoops, as in many cases, your existing U.S. coverage will allow you to drive in Canada. However, make sure that your insurance company covers driving your vehicle in Canada. Also see which parts of your insurance coverage carries over into Canada’s insurance policies, as sometimes comprehensive coverage or collision coverage will not carry over to a rental car.
As for required documents, you need your current insurance ID card, and in most cases, authorities require you to obtain a Canadian Insurance Card as well. You must also have your current state driver’s license and your vehicle registration.
Your best bet is to research before you leave on your trip, with at least a few weeks of lead time. Extra time enables you to sort out paperwork, make phone calls, and secure documents you need, which may have to be mailed.
We hope this was a helpful guide for all you travelers out there. If you have additional insight or related questions, don’t hesitate to chime in the comments below.