Will my car insurance cover an accident in another country?
Some people travel outside of the country regularly for business or pleasure. Whether they take their own car across the border or rent a car in the foreign country, drivers are faced with the conundrum of how to handle auto insurance coverage. People who will be staying in a foreign country for a long time will have different insurance needs than individuals who only visit, and drivers in Mexico or Canada will have different needs than those in other countries. No matter where you are, any time you’re behind the wheel, you’re at risk for an auto accident.
Of course, an accident in is never convenient, but foreign accidents pose a unique set of problems. Liability can be more severe in other countries, and an accident can be disastrous if it is not covered by insurance. You could just as easily end up in jail for causing a collision in some countries as you could get sued for causing damage. Before you depart for another country, be sure to take the time to understand how your insurance policy will transfer to accidents on foreign soil so that you can prepare yourself accordingly.
Will American Insurance Transfer to Mexico or Canada?
The question of whether your auto insurance will cover you in a foreign country depends in part on what country you’re traveling to and how the individual insurance company chooses to handle it. For example, some insurance companies work in multiple countries, and will handle claims accordingly, while others only operate in the United States.
Additionally, some policies written in border states may handle foreign claims differently than states further from the border. For Americans, Canada and Mexico are the two countries where foreign car insurance claims come up most frequently. Each country is handled differently due to laws both in the United States and in the neighboring country.
Many American insurance companies provide coverage to Canadians as well. For example, Allstate sells policies in Canada and has a Canadian claims department and network of repair sites. Because of this, any accident an Allstate insured gets into while in Canada will be covered; similarly, any visiting Canadians with Allstate will also be covered. Other insurance companies that provide coverage in Canada should handle this similarly.
For accidents occurring in Mexico, the laws are different. Most insurance policies designate a limit on how far a driver can be from the Mexican border before the insurance no longer covers a claim. For example, an accident occurring in Juarez may be covered while one in Oaxaca might not be. The mileage limit will vary from one policy to the next, so you will need to check with your insurance company to find out. Some policies exclude Mexico entirely, especially if the driver is from a border state, due to the increased risk of being in a drunk driving accident or having the car stolen.
What About Car Accidents in Other Countries?
For car accidents not occurring in neighboring countries, auto insurance will be handled differently. Because you will most likely be renting a car when driving overseas, you will be able to take out coverage for the rental vehicle. This may be more expensive, but it’s more likely to provide full coverage to the vehicle. Most insurance companies do not provide coverage that will extend to distant foreign countries.
Be sure to ask before renting a car in a foreign country how the insurance will work. You may be held liable for things out of pocket that you don’t expect, and traffic laws may be handled differently there as well. In some cases, it might be smart to avoid driving altogether and utilize public transportation instead; if you cannot get reliable local coverage from a local insurer, it’s best not to drive at all.
If you’ll be overseas for a long time and will be buying or leasing a car, it’s worth looking into buying an auto policy. Depending on the country, there may be limitations to buying car insurance if you aren’t a permanent resident. You should check online to see about available auto insurance companies and the cost of premiums in the country you will be staying in to get an idea of how much to budget for insurance.
By reviewing your options in advance, you can prepare for the journey and ensure that you are always fully covered. This will keep you from being caught unaware by a lawsuit after an accident or legal action if you’re found to have insufficient auto coverage.