What Car Insurance Do I Need While Traveling Abroad?

Last Updated on April 22, 2023

If you’re traveling abroad and planning to rent a vehicle, you may need special car insurance.

Depending on the country, your US car insurance policy could follow you. In some countries, all rental cars automatically come with car insurance.

Keep reading to find out everything you need to know about your car insurance needs when traveling abroad.

Key Takeaways:

1. Most US car insurance policies don’t cover trips outside the United States, Canada, and Mexico.
2. Consider buying personal liability insurance from the rental car company, a third-party company, or rental car insurance from your credit card company.
3. A personal umbrella insurance policy can provide additional protection when driving abroad but does not replace personal liability insurance.
4. You may need an International Driving Permit (IDP) to rent a car outside of English-speaking countries, and you can obtain it by meeting three basic requirements.

Most US Car Insurance Policies Don’t Cover Trips Outside the United States, Canada, and Mexico

A standard US car insurance policy covers you anywhere in the United States, and some policies cover you in Canada and Mexico. Beyond these three countries, however, your insurance is unlikely to cover you.

Most US car insurance policies – but not all – extend coverage to Canada. If you make a road trip to Canada, for example, then your US car insurance policy should cover your vehicle on your trip.

Some US car insurance policies also cover trips to Mexico. In most cases, however, you must buy supplemental car insurance when driving to Mexico from the United States.

In most other countries, your US car insurance policy will not follow you. You’ll need to buy car insurance abroad – say, from a local insurance company or your rental car agency.

What Insurance Do I Need for Traveling Abroad?

If you’re traveling outside of the United States, Canada, or Mexico, then it’s important to consider your insurance needs. Your US car insurance policy will not cover you. However, other insurance you already have could cover you.

Consider the following coverage options when traveling abroad:

Personal Liability Insurance from the Rental Car Company: If traveling abroad, it may be best to buy personal liability insurance from the rental car company. In fact, many countries – particularly in Europe – bundle the costs of insurance with your ordinary rental car rate. They are required to include insurance costs by law.

Personal Liability Insurance From a Third-Party Company: If you don’t want to buy personal liability insurance from your rental car company while traveling abroad, then you can also purchase from a third-party company. In fact, some drivers buy both because the rental car insurance is too low. If you want added peace of mind, then compare insurance quotes for your country of destination.

Rental Car Insurance from Your Credit Card: Many credit cards provide car insurance when traveling abroad. If you pay for the entire rental car with your credit card, then you may have good coverage on your rental car. However, check your credit card to verify if it’s primary or secondary coverage.

Personal Umbrella Insurance: If you have a personal umbrella insurance policy, you may be covered when traveling abroad. A standard personal umbrella insurance policy covers you anywhere in the world. Umbrella policies protect you against liability. If you injure someone while driving in Greece, for example, and that person wants to sue you for $1 million, then your umbrella policy could protect you. Even if you have umbrella insurance, however, you still need to buy personal liability insurance from the rental car company (or another source). Umbrella insurance covers any remaining expenses after using up your personal liability insurance.

You May Need an International Driving Permit (IDP) to Rent a Car Abroad

In many English-speaking countries, you can rent a car with your US driver’s license and no other documentation.

However, if you’re planning to rent a car outside of English-speaking countries, then you may require an International Driving Permit (IDP).

An IDP is a legal document accepted around the world. It’s a translation of your US driver’s license into ten common languages. The IDP is not a driver’s license; instead, it’s an official translation of your US driver’s license.

Before renting a vehicle, for example, your rental car company may require your IDP and your valid US driver’s license. The combination of the two documents verifies you are a legal, licensed driver.

Or, if you are pulled over in a foreign country, you may need to provide your US driver’s license and IDP. Otherwise, the law enforcement officer may not be able to verify you are legally allowed to drive.

IDP Requirements

To obtain an IDP, you must meet three basic requirements:

• Be at least 18 years of age
• Have a valid driver’s license
• Bring two passport-sized photos

Many drivers get IDPs through AAA and similar organizations. AAA charges a small fee, then provides you with an IDP permitting you to drive in 150+ countries worldwide.

Rental Car Insurance from Your Credit Card

While you travel, you most likely will bring along your trusty American Express, Discover, or Visa. Call your credit card company and ask about rental car coverage when traveling abroad. Most credit card companies offer rental insurance on cars booked while using their card.

For example, Visa automatically provides renters with “Auto Rental Collision Damage Waivers”. These cover theft and collision losses up to the cash value of the rental vehicle. However, the car must be rented with your Visa card that has your name embossed on the card and you listed as the driver. In the rental agreement, you may indicate authorized drivers. If you include them in the rental agreement, Visa will cover those drivers too.

While Visa offers this protection, they do not provide it in every country. Therefore, call Visa directly and let them know where you intend to travel and see what coverage they offer before assuming you have full protection.

Lastly, inquire about coverage protection length. If you are on an extended trip, Visa may not offer coverage beyond a specific travel period.

Visa is not the only service providing you with rental coverage. Other credit cards that may cover you, according to CreditCards.com, include Chase Sapphire Preferred and Chase Sapphire Reserve, along with United MileagePlus. American Express may offer primary coverage if you enroll in their service program beforehand.

Does My Car Insurance Cover International Rentals?

If you have car insurance in the United States, then that car insurance generally extends to any cars you rent in the United States. But it may or may not extend to rental cars abroad.

Generally, here’s how your car insurance policy covers rental cars:

• A standard US car insurance policy covers rental cars you rent in the United States. You get similar coverage on your rental car as you carry on your personal vehicle.
• Most US car insurance policies also cover you when renting a car in Canada. If you rent a car in Canada, then your US car insurance policy should cover the duration of that rental. However, check with your insurer to make sure.
• If renting a car in Mexico, your US car insurance policy may or may not cover you. Some do, but most don’t. Contact your car insurance company to verify you have car rental coverage in Mexico.
• In most other countries, your US car insurance policy will not extend to cover your rental car. You need to buy insurance from the rental car company (or your credit card company or a third party) to maintain coverage.

Buy Your Coverage Directly Through the Rental Company

Another option, though more expensive, is purchasing your insurance coverage through the rental car company. Rental companies sell their insurance coverage with the rental, but these are in the form of waivers (i.e. collision damage waivers).

Just realize that the cost is usually on a per-day basis and will add up quickly if you plan to stay longer than a couple of days. Furthermore, read the fine print on your policy to avoid any surprises with additional fees.

Rental car companies have caveats and fine print that you might be tempted to go over quickly, but before you skim, realize the fine print might have exclusions. If you notice terms like “secondary” or “supplementary,” you may not receive the necessary coverage.

Find out how much coverage you need, then review the policy to ensure it gives you that coverage before signing up for a daily fee.

How to Buy Overseas Insurance from a Third-Party Company

GEICO and several other major US insurance companies also offer overseas insurance. Depending on your insurance needs and country of destination, overseas insurance from a US-based insurer could be the right choice.

GEICO markets its overseas insurance coverage specifically to people like:

• Military personnel
• Government employees
• Expatriates

If you are an American residing, traveling, or living abroad, you may want to buy overseas insurance through GEICO or another major insurance company.

Alternatively, your destination country has local insurance companies that could serve your needs. Your destination country has insurers catering to visitors and residents. Depending on your destination, these insurance companies could be your best option for coverage.

Final Word: Check Local Car Insurance Requirements in Your Destination Country

Ultimately, different countries have different rules for rental cars.

Some countries require rental car companies to include car insurance with all rentals, while others require you to pay extra if you don’t have valid car insurance. Some US car insurance policies cover you when driving a car in Canada or Mexico, while others deny any claim outside of the United States.

Rules may also vary depending on whether you’re driving a rental car or bringing your own vehicle.

By doing your car insurance research, you can avoid any surprises when traveling abroad.