Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 15, 2020

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Key takeaways...

  • Traveling in a foreign country is difficult enough, and not having the right insurance may complicate things more
  • If you’re only planning to cross the U.S. state line, keep in mind that in Mexico, they only accept auto insurance from Mexican carriers
  • It is highly recommended that you also get an International Driver’s Permit when abroad
  • We have three tips that will ensure you are adequately covered abroad while still saving money

One of the great pleasures of driving abroad is being able to escape urban congestion. Automobile travel gives tourists the opportunity to explore the countryside and escape the crowds.

Driving in a foreign country, however, where the laws of the road may be very different and other motorists don’t necessarily behave the way you expect them to behave, can be challenging.

Accidents happen. Your U.S. auto insurance policy won’t protect you in most instances, and even if it does, it may not meet the minimum coverage required by the country you’re touring by car.

If you’re going to be driving while traveling in a foreign country, make sure you’re insured first. Enter your ZIP code above and compare at least three to four policies today!

Table of Contents

Overseas Auto Insurance

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The first thing to do is to determine whether or not your existing auto insurance policy provides international coverage. Read your policy over carefully.

If the language confuses you, call your insurance agent or contact your insurance company and ask them directly.

Traveling In Neighboring Countries

Your current auto insurance policy is likely to provide coverage if you’re traveling in neighboring countries like Canada or Mexico. However, Mexican law only recognizes the validity of insurance issued by Mexican carriers.

If you’re operating a motor vehicle in Mexico, you need to carry $20,000 in liability coverage from a Mexican insurance company. Carry proof of insurance with you at all times.

In Mexico, drivers who are involved in accidents are routinely taken into custody at the site of the accident.

Proof of liability will greatly reduce the amount of time you spend in custody and may prevent time in jail in Mexico.

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International Driver’s Permit

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Most countries prefer U.S. drivers to carry an International Driver’s Permit (IDL) in addition to their state-issued licenses. The U.S. State Department recently issued a travel advisory to this effect.

The permit costs $15 and can be issued to anyone who holds an American driver’s license in good standing; they are valid in 150 countries.

An IDL may not be a requirement for issuance of an overseas auto insurance policy, but it will greatly simplify the process of reimbursement should you happen to become involved in an accident while driving abroad.

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Three Tips For Finding Cheap International Car Insurance For  Drivers

Below are listed a few tips for saving money on international car insurance:

Compare Foreign Insurance Quotes From Many Carriers

Shop for international auto insurance on a website that allows you to compare the relative costs of policies issued by a variety of different carriers. Comparison shopping saves you time and money.

In general, overseas auto insurance is more expensive than domestic auto insurance, because the insurance carrier must underwrite a higher level of risk.

Additionally, competition among carriers brings prices down in the domestic market, but fewer agencies offer insurance for driving abroad. More or less, make sure you understand the pricing models you’re reading about.

Is the policy less expensive, because it carries a higher deductible? If so, how easy will it be for you to pay that deductible out-of-pocket expense when you’re in a foreign country?

Perhaps the policy is more expensive because other types of insurance are bundled with the auto insurance. If so, it may actually represent savings to you in the long run despite the price tag.

Review Insurance Offered By Rental Car Agencies

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If you are renting a car abroad, consider purchasing insurance through your rental car agency. Most rental car agencies offer:

  • Liability
  • Comprehensive
  • Collision

A bundling policy through your rental car agency can be considerably cheaper than insurance purchased through a third party.

The reason? In the U.S., auto insurance policies are routinely written to cover any driver who is driving a specific car. If you are interested, there are other ways you can save on rental coverage.

International auto insurance policies, on the other hand, only insure one driver who is driving one specific car.

With an international policy, if more than one person will be driving a car, you will need to buy separate policies to cover each driver.

Since the rental car agency is able to insure all the licensed drivers associated with the car, purchasing insurance through a rental car agency may be a cheaper option.

Some credit cards offer rental car insurance as one of the extras they provide cardholders.

Check with your credit card company to see if this pertains to your card, and if so, whether the insurance extends to rentals in a foreign country. If it does, be sure to use that card when renting the car.

Bundle Your Overseas Auto Insurance With Other Trip Insurance

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Overseas auto insurance is often bundled with other types of travel insurance such as trip medical insurance.

In these cases, your point of comparison is not the cost of the combined policies but what you would be paying for the individual policies if you bought them separately.

Bundling is always a good way to save money on car insurance.

In general, health insurance policies only reimburse for health care expenses incurred in the country where the policy is issued.

Trip medical insurance pays for emergency medical and dental treatments and covers the cost of emergency evacuation back to the U.S. if the treating physician deems this necessary.

Unlike auto insurance, trip medical insurance is not mandatory, but it is well worth purchasing.

If you’re planning a trip abroad and want to be sufficiently covered, enter your ZIP code below and start comparison shopping today!

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