Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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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 Chris Harrigan

UPDATED: Apr 13, 2022

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Here's what you need to know...

  • There are two main differences between driving in North America and Europe
  • The carriers use credit scores as one factor in determining vehicle insurance rates
  • Mexico has fairly strict laws about car insurance coverage

The simple answer to this question is it all depends on where you are going to be driving.

There are two main differences between driving in North America, where you might be driving your own vehicle, and Europe, where you are probably driving a rental car.

The other option is you may be taking a vacation where family or friends are kind enough to let you borrow their car.

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Car Insurance for North America


If you live nowhere near the borders of the United States and Canada or Mexico, then you may be surprised to find out how our neighbors treat our insurance coverage.

The border is pretty easy to cross in a car, and for that reason, you may not realize the potential personal financial and legal can of worms you could unwittingly be opening when driving to Mexico, in particular.

Mexico has fairly strict laws about car insurance and does not accept coverage from the USA.

You have to contact insurance carriers that actually sell Mexican car insurance. Without it, you may face jail time, hefty financial fines, and even steep legal fees.

Buying Mexican car insurance when going south of the border will save you from a lot of problems if you plan on driving to Mexico.

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Heading to Canada?

Canada is similar in many ways to its southern neighbor, the U.S. It shares the same credit reporting agencies, which Mexico does not, again surprisingly.

It means there is already a comfort level among the insurance and financial sectors between Canada and the U.S.

Insurance companies check consumers’ credit reports for any signs of financial stress or bad habits.

The carriers use credit scores as one factor in determining vehicle insurance rates. What does that mean for driving in Canada?

It means that your insurance will automatically adjust to Canada, much the way it flexes to suit your needs if you were to drive from New York to California.

Here are pertinent roadway laws to abide by, straight from the United States Embassy in Ottawa:

  • Seatbelt use is mandatory
  • Road speeds limits are posted in metric units (your speedometer has both gauges on it, though you may never have noticed.)
  • Proof of auto insurance is required
  • Valid driver’s license is obligatory
  • No right turns on a red light anywhere in Montreal

European Sojourn


Bravo, if you are setting foot in Europe and taking behind the wheel of a car over there. Maybe you waited a lifetime for your trip, and are enthusiastically anticipating all the tourist trappings.

Here are two ways to get behind the wheel of a car:

  • Rental car
  • A friend or family lending you a car

Basically, for either of those methods, you may find that you have a different way of getting insurance. If someone is lending you a car instead, you may want to find out about being added to their insurance.

However, you would not be able to help your overseas friend, as only North Americans from Canada and the U.S.A. have an even exchange on insurance.

That said, there is car insurance rental insurance, just like you could buy specifically if you are renting a car from an agency.

The idea is to mitigate all risks possible when renting a car, and that is where insurance plays a big role.

If you have a 5-year old S.U.V., you may automatically be underinsured for a new rental car. However, your collision or comprehensive would only cover the costs of your car to whatever degree you had specified.

Newer cars may meanwhile run 20,000 dollars, and you are already on the hook for 10,000 dollars cash if your rental is wrecked and totaled out by a rental company’s insurance.

Collision Damage Waivers

In addition, you may not be alone in a crash as it could involve injuries and damages to other peoples’ vehicles. When insuring in Europe, you need to report what countries you will be visiting the European insurance company.

That way, they can make sure you have covered appropriately for each of the countries you will be visiting.

For instance, you will need a collision damage waiver at the least.

In Italy, for instance, you have to add theft insurance, in addition to purchasing the collision damage waiver.

What you may not expect is that your credit card, which many wrongly rely people exclusively for their insurance coverage on rentals, excludes coverage in Ireland, and Northern Ireland.

You will need to get a copy of your credit card agreement that specifies what is covered wherever you go. It will list limits, such as capping insurance coverage on the rental at 50,000 dollars.

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Securing an I.D.P


You will need to get a copy of your credit card agreement that specifies what is covered wherever you go

An International Driving Permit, or I.D.P., may sound like a made up document, but it actually exists. It translates your driver’s license information into other languages.

However, many sites will claim to offer up an I.D.P., though there are only two agencies in the U.S. that offer up legitimate documents.

For those driving in non-English-speaking nations, including South and Central America, Mexico, and Europe,  it is a way to prove that you are a licensed driver.

Check out A.A.A., or the National Auto Club to apply for your International Driving Permit.

Another idea is to contract with a car dealer who provides short-term leasing, though that may be too involved for you if it is a short stay overseas.

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