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 18, 2020

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Key takeaways...

  • It’s illegal to drive overseas without the appropriate insurance coverage
  • If unsure, you can check with the local embassy for minimum insurance requirements
  • The US Department of State also offers some traveling tips for American residents going overseas

International car insurance provides protection for people who travel overseas on a regular basis, be it for work or recreational purposes.

Much like state laws that require coverage, many countries also require some form of drivers’ insurance coverage.

In effect, international coverage works as a type of all-purpose policy that offers protection in any country. As insurance laws can vary from country to country, coverage requirements may differ from country to country.

Researching a destination country’s insurance requirements can help ensure an international policy includes all the necessary coverages.

International car insurance policies can cover rental cars and also primary vehicles in cases where travelers opt to ship their own cars overseas.

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Table of Contents

International Car Insurance

The economic and political conditions present within a country can have considerable effects on insurance costs and coverage requirements within a particular country.

Conditions within a particular country may increase the overall cost of insurance when purchased from that country.

And while many people decide to purchase car insurance once they arrive in an overseas country, it may be cheaper for travelers to purchase an international policy instead.

International insurance policies provide coverage regardless of the country’s location or political climate.

As different countries may differ in the type and amount of coverage required, information regarding a specific country’s requirements can be obtained from embassy or consulate offices within a particular country.

And while international car insurance is designed to cover drivers wherever they are, some countries may still require overseas drivers to purchase their own insurance.

This means travelers can end up paying for two types of policies depending on a country’s insurance laws.

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Policy Pricing and Coverage Periods

In general, the more dangerous a country is the higher the cost to purchase insurance in that country, whether it’s home, life or car insurance coverage.

And while an international policy purchased in the U.S. may run cheaper than oversees plans, the costs for international car insurance is considerably higher than stateside coverage.

When compared to other stateside insurers, this price tag amounts to six months worth of insurance coverage for the same car when driving inside the United States.

When purchased on a short-term basis, the cost of coverage is typically lower than long-term policy coverage.

Coverage Options

Unlike regular car insurance policies, international policies only cover one driver for a specific car. This means travelers who take their own car oversees must purchase another policy to cover any family members riding in the car.

People who decide to rent a car while overseas can take advantage of the rental insurance offered through the agency.

Rental car insurance covers any licensed drivers in the car, which can help reduce the cost to insure family members.

Rental car insurance purchased abroad tends to run higher than the rates charged for an international policy, though the additional coverage protection for other passengers may help to cancel out the additional cost.

Travelers may also consider using the insurance options provided by their credit card company.

Some credit card companies offer international car insurance coverage for car rentals.

Using credit card coverage means a person’s car insurance premiums won’t be affected if a car accident does happen overseas.

International car insurers may also offer policyholders a split policy option that provides coverage for driving overseas and at home during the same coverage period.

This comes in handy in cases where family members remain in the U.S. while another goes overseas.

Instead of transferring everything over to a completely new policy that includes international coverage, policyholders can simply add international coverage to their existing car insurance policy.

Consider Additional Coverage Options

When considering international car insurance protection, the insurance laws in the destination country dictate what types of coverage are needed.

For instance, cab companies may only cover their drivers and not the passengers who ride in the cabs.

In these cases, travelers may want to consider adding passenger insurance coverage if they plan to travel by cab on a frequent basis.

The US Department of State offers some traveling tips for American residents going overseas.

If traveling in countries with volatile political environments, travelers should consider adding risk protection coverage to an international policy plan.

A standard international policy includes a “standard war exclusion,” which means any claims related to a war-affected environment are not covered under an international policy.

As unusual situations can arise, such as kidnapping or other incidents of violence, risk coverage provides added protection when unusual or war-related circumstances affect an insurance claim.

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References:

  1. https://www.geico.com/overseas-insurance/
  2. https://www.statefarm.com/insurance/auto/rental-car-insurance
  3. http://www.investopedia.com/articles/pf/11/using-credit-cards-in-other-countries.asp
  4. https://www.nolo.com/legal-encyclopedia/passenger-injury-claims-after-car-accident.html
  5. https://www.state.gov/
  6. https://www.irmi.com/articles/expert-commentary/attack-on-america-the-insurance-coverage-issues-(part-1-war-risk-exclusions)