Am I Covered If I Drive Outside of the Country?
Whether you’re crossing the border into Mexico or Canada or renting a car in Europe, you may be wondering if you’re covered while driving outside the country.
Are you covered when you rent a car in a foreign country? Does your insurance provide the same coverage on a road in Canada or Mexico? Today, we’re explaining everything you need to know about staying covered while driving outside of the country.
Most American Car Insurance Plans Cover Canada and Mexico
The United States borders two countries: Canada and Mexico. Most American car insurance plans will provide identical coverage while driving on any road in Canada or Mexico. You have the same liability limits and coverage in most cases and with most insurance companies.
However, don’t expect similar treatment in other countries. Most American car insurance plans cover Canada and Mexico, but they don’t extend to any other countries. If you’re renting a car in Europe, Asia, Australia, or elsewhere, for example, then you may need additional insurance.
Contact your Car Insurance Company
Contact your car insurance company before you travel abroad. Make sure you’re covered – even if you’re just going to Canada or Mexico. Your policy might have unique exclusions that prevent coverage in a foreign country.
Your car insurance company might also have special insurance products for drivers traveling overseas.
Contact your Car Rental Company
Alternatively, talk to your car rental company in the foreign country. They likely have experience renting vehicles to foreign drivers.
Your foreign car rental will almost certainly include the costs of liability insurance – which is the bare minimum required to drive on roads. However, they might also upsell you on collision-damage waiver insurance – which could be worth it if you’re not covered by your current car insurance or credit card company.
Contact your Credit Card Company
Call your credit card company as well. If you rent a vehicle in a foreign country and pay with VISA, for example, then you may be covered against theft and collision. Contact your credit card company and ask if your card covers overseas rentals. Ask if it excludes certain countries. In general, most major credit card companies offer free insurance coverage for car rentals in Europe. In fact, this is typically your cheapest – and simplest – option for car insurance abroad.
The main downside of getting foreign car insurance through your credit card company is that this insurance doesn’t cover injuries and other liabilities. You may want to call your car insurance company to add these policies to your plan before traveling abroad.
Foreign auto insurance from your credit card company might also exclude certain European countries.
Another thing to remember is that if you’re involved in a collision abroad, then your car rental company will likely charge all damages to your credit card. This could max out your credit card, making it difficult to access funds while overseas.
Purchase a Standalone Insurance Policy
Ultimately, if you want to ensure you’re covered while renting a car abroad, then purchase a standalone policy. You can buy a policy from your rental car company or research insurance options in the country you’re visiting.
There are various companies that specialize in insuring rental vehicles abroad. You can expect to pay about $15 to $25 per day for these plans, although discounts may be available when buying insurance for a week or month.
Can You Drive a Friend’s Vehicle While Staying Covered?
You may be borrowing a vehicle owned by a friend or family member while in Europe. In this case, you have two options for insurance coverage. You can tell your friend or family member to add you to their insurance plan. Or, you can purchase standalone insurance for yourself using that vehicle. Ask your friend or family member to contact their insurance company to see if their plan covers you. In most cases, they’ll need to add you to their insurance policy as a temporary driver.
Purchase Insurance from the Rental Car Company
Sometimes, the simplest option is to just purchase insurance from the rental car company. Rental car companies in Europe and other foreign countries will typically sell collision-damage waiver insurance for an extra fee. This fee can be anywhere from $10 to $50 per day.
These waivers don’t function like ordinary insurance. Instead, they just reduce the deductible you pay if you damage the vehicle you’re renting.
If you buy car insurance from your car rental company, it may add 30% to the cost of your rental. In most cases, it will be cheaper to buy standalone car insurance or get insurance through your credit card.
Getting involved in an accident in a foreign country can be a stressful experience. Talk to your insurance company or credit card company before you travel abroad to make sure you’re covered.