Start with your own policy territory
Every auto policy defines where it applies, usually in a "policy territory" clause. Before any trip, read that clause and ask your insurer three questions: Does my liability coverage apply in the country I am visiting? Does my physical damage coverage (collision and comprehensive) apply there? What proof of insurance will local authorities accept? Get the answers in writing. Your auto insurance agent or insurer is the only party that can confirm what your contract says.
Driving in Canada
Canada requires all drivers to carry third-party liability insurance, and minimums are set by each province or territory. According to the Insurance Bureau of Canada, the minimum is $200,000 (Canadian) in most provinces and territories, including Ontario, Alberta and British Columbia's basic Autoplan; Manitoba and Nova Scotia require $500,000; and Quebec requires $50,000 in civil liability from a private insurer. If you drive a US-registered car into Canada, ask your insurer to confirm that your limits meet the minimum in every province you will visit and to provide proof of insurance you can show to police. Carry your registration and driver's license.
Driving in Mexico
Mexico is the destination where US and Canadian drivers most often get caught out. Canada's official travel advice for Mexico (Global Affairs Canada) states that Mexican liability insurance is mandatory and that Canadian automobile insurance is not valid in Mexico. US drivers should assume the same and buy a Mexican liability policy from an insurer authorized in Mexico before crossing. The same advice warns that, after an accident, drivers may face serious legal problems, including detention, and that without Mexican liability insurance you could be prevented from leaving the country until compensation is agreed. It also notes that you must enter Mexico with the proper vehicle import permit and insurance, because they cannot be obtained once you are in the country. Consider full coverage, including legal assistance, rather than liability only.
Europe and the Green Card system
In the European Union, the compulsory third-party liability insurance of a vehicle registered in one EU country is valid in all other EU countries, according to the European Commission's Your Europe portal; optional cover, such as damage to your own car, may be limited and should be checked. The wider Green Card system, an international certificate proving that a vehicle has the compulsory motor liability insurance required in the visited country, was established in 1949 under the UN Economic Commission for Europe and is coordinated by the Council of Bureaux in Brussels. It covers Europe and several neighboring countries. The United States and Canada are not part of it, so a US policy does not come with a Green Card. If you ship your own car to Europe, you will need local insurance or border insurance; most travelers rent instead.
Renting a car abroad
- Liability. Rental rates abroad usually include the local compulsory liability insurance, but limits vary by country. Ask whether supplemental liability is available.
- Damage to the car. Collision damage waivers (CDW) and theft protection limit what you owe the rental company, often subject to a high deductible.
- Credit card benefits. Some cards provide rental car damage coverage abroad, but many exclude certain countries or vehicle types and do not include liability. Read the benefit guide before declining the rental company's cover.
- Documents. Some countries require an International Driving Permit, which is a translation of your license and is valid only together with it.
Visitors driving in the US
Foreign visitors who drive in the US must follow the insurance laws of the state where they drive. Global Affairs Canada notes that many states have mandatory automobile insurance requirements and that a valid Canadian driver's license can be used to drive in the US. Visitors who rent should check the liability limits included with the rental and consider supplemental liability; those who borrow or buy a car need their own policy. Minimum limits differ by state; see our guide to state minimum auto insurance requirements.
Travel insurance is not auto insurance
A travel insurance policy can pay your medical bills after a road accident abroad, but it does not cover your liability to other drivers or damage to the vehicle. Treat travel medical and motor liability insurance as two separate needs.
Checklist before you go
- Confirm your policy territory and get proof of insurance for each country.
- For Mexico, buy Mexican liability insurance and the vehicle import permit before crossing.
- Check whether you need an International Driving Permit.
- Decide in advance which rental car protections to accept.
- Carry your insurer's 24-hour claims number and know local accident reporting rules.
Polis Re can help you compare auto and travel options and request quotes; policies are issued by licensed insurers and placed through licensed producers. Request a quote.