If you frequently travel outside the country or are thinking or renting a car in another country when on vacation, then international car insurance is something you will need to consider. International car insurance will protect you when renting outside of the country, particularly since you will likely be driving on roads that you are unfamiliar with and engaging drivers with different driving patterns and habits than you are used to.
Policies for international car insurance coverage are written for various periods of time, stretching from one month to one year. If you are taking a brief trip in a foreign country and it is one of the few times you will be traveling in the year, then it is usually better to rely on public transportation and taxis. However, if you will be staying for an extended period of time, then having your own vehicle or rental car may be the right option.
The price for international car insurance varies widely between countries, depending on how safe or how dangerous it is to drive in a particular place. For example, Mexico is considered a fairly expensive and dangerous place to drive, so the rates there are higher than in other countries. Canada, however, is considered a safe place to drive, and rates there are low.
International Car Insurance: Advantages & Disadvantages
When trying to decide on whether or not to purchase international car insurance, it is important to consider all of the advantages and disadvantages of this type of coverage:
- Protection for At-Fault Accidents: International laws vary regarding licensing and insurance. If you take the necessary steps prior to traveling, you can ensure you have the right insurance for the country you will be in. In most cases you can purchase insurance for your trip so that in case of an accident that ends up being deemed as your fault you will be covered. Most of the time you can choose options just like you can in the U.S.
- Rental Car Protection: If you are renting a car, car insurance will be offered through the rental agency. The rates are almost always higher than what you would pay going through your insurance company for an international policy though. You may even want to check with your credit card company and see if they offer international rental protection. If you choose to use the insurance offered with your credit card provider you can bypass your insurance company altogether in the event of an accident. The advantage to this is you don't have to worry about your premiums jumping up if you do need to file a claim. It's important to note however that not all credit cards offer rental protection, and in some countries they are not allowed to. For instance, if you are traveling in Italy, you will need to purchase your own policy as the credit card companies won't be able to offer you insurance.
- Short Term Policies Available: Most people who travel and need transportation while traveling won't be abroad for long. Your insurance company can set up a policy for as little as one week. This will keep the premium you pay for the extra insurance low and you will have the peace of mind in knowing you are covered during your travels.
- Split Policies: If you are going to have vehicles operating in the U.S. during your travels, you will be able to set up policies for just the international driving and keep your U.S. policies the same. This is an advantage if you will be traveling and leaving family in the U.S. You won't have to transfer everything over to a new policy, just add the policy for the international insurance to the current policy.
- Cargo Insurance: If you choose to get your international insurance with a larger carrier, ask about cargo insurance if you are shipping your car. This is generally something that is extremely affordable and it will protect your car while it's in transit. The insurance you've taken on the car will not cover any damage or loss while the car is on a ship. Unfortunately there are a lot of things that can happen when the car is in route and if you're not covered, then you're out of luck.
- Higher Costs: International car insurance will cost you a lot more than your stateside policy will. As an example, a one month policy on a 1999 Plymouth Breeze with the lowest coverage available for Europe would be over $300 when compared with three different insurance agencies, which is more than what the policy would cost for six full months stateside. Driving while overseas may be a necessity, but it will cost you more.
- Limited Availability: There are only a handful of agencies that offer insurance for vehicles traveling internationally. There are a few larger agencies that offer the insurance, but you may end up having to get a policy from an agency that you aren't currently insured with. The reason for this is that it's much harder for an insurance carrier to get underwriting for international travel and many insurance companies don't see it profitable to go through the effort.
- Vehicles in Transit: If you are taking your car with you while you travel, the vehicle won't be insured while in cargo. The cargo company will offer you a policy to cover the vehicle, and you can also purchase a separate policy from the actual insurance company as well. This is highly advisable. If something happens while the car is on the cargo ship, without this separate policy, the damages or loss inflicted will become out of pocket expenses.
- Fleet or Business Vehicles: Most insurance companies stateside won't offer policies for those using company cars or wanting to send a fleet internationally. These policies are very difficult to find and are extraordinarily expensive. Chances are, if you are taking a business vehicle with you, the insurance will need to be set up directly with the company who the car belongs to. There will be more red tape and paperwork involved. Ultimately, if it's their vehicle, they should be insuring it.
- Insurance Only for the Driver: International policies will only cover one person driving one specific car. If you are traveling with your family, then only one person can be insured per policy. That's very different than what you may be used to in the U.S., where the insurance will cover any driver. This can be expensive if you want to insure another driver and can be inconvenient if one person gets stuck doing all the driving. If you are taking several people with you on your travels, you may want to consider renting a car since the car rental agency can insure it and all the licensed drivers associated with, rather than getting separate policies for each driver.
Buying International Car Insurance
Now that you've decided to purchase international car insurance, you're probably wondering about the best way to go about it. Here are some helpful steps to get you on your way to getting the right amount of coverage at a reasonable rate:
Step 1 - Call Your Current Car Insurance Company
The first step in finding international car insurance is to call your current insurance provider. Most drivers who travel outside of the country are not covered by their own car insurance. Few domestic carriers provide international car insurance as part of the standard coverage to clients, but several of them offer a separate international policy for their clients who drive in foreign countries. If you are insured with a large company the chances of them offering insurance overseas is better. In most cases you will only need basic information, like your policy number and vehicle information if you already have a policy.
Step 2 - Choose the Right Amount of Insurance Coverage
Just as in U.S. policies, international policies are available in several forms. You can get liability, comprehensive, and collision coverage in most countries. The policy may differ by country, but the insurance company will be able to give you all the pertinent information. Purchase a policy for your international vacation that is somewhat equivalent to what you have at home.
Step 3 - Complete the Paperwork
Once you've spoken with your insurance carrier and chosen your coverage, you will be ready to get the policy started. Just as in a local policy, the insurance company will require some paperwork from you. In most cases this can be filled out online. If this isn't available, you can visit a local office or have the paperwork mailed or faxed. Sign the forms, and you're set. Most countries require insurance on the actual car and not the person. This means you need to know what car you are taking, or what car you will be picking up when you get to your destination. If you are unsure about this you need to try to set up the transportation first since the insurance company will need the specific car information before they can begin writing a policy for you.
Even if you are using the same insurance company for your international needs as you do for your stateside needs, the underwriting on the policies will be different. This means you may have to submit information that has already been submitted for your stateside policy. Not filling out all the required fields can delay the process and cause more of a headache. If you have any questions about any of the information they are asking for you should ask about this before you submit the application.
Tips for Getting the Best International Car Insurance Rates
The cost of international policies is generally higher than those for domestic policies - sometimes a great deal higher. Many foreign countries do not have a legal requirement for auto insurance coverage. However, if you are driving in another country on a regular basis, it would be wise to have coverage so you are protected from other drivers, from any quirks you may not know about concerning laws, as well as protect you from theft.
- Shop Around: The first thing you want to do is research some international car insurance companies. There are only a handful of big name companies that even offer international insurance, so the comparisons won't take you too long.
- Check with Your Credit Card Company: In many cases your credit card company will offer you international car insurance if you are renting a car. If you have a great card, the rates for this may be much cheaper than going through a traditional car insurance company. The other plus to this is that in the event anything happens, you can keep your personal policy out of the picture. This will help your rates stay where they are at with your existing policy.
- Look into Bundles: You can save money if you choose to bundle a package with car and medical insurance. You will need medical coverage while you are traveling internationally since most insurance companies will only offer minimal, if any medical coverage for you. By combining the policies together you can save quite a bit of money.
International Car Insurance Companies
Perhaps the easiest way to get international insurance is to go online and search among the reputable insurance providers in the United States. Some of these companies provide international coverage through cooperation with partners in other countries. Going through these companies will provide you with not only good coverage, but peace of mind because you are dealing with reputable companies who have been around for many years, have a history of paying claims and care for their customers.
- GEICO is one of the companies that provide this international coverage. They work with a subsidiary called International Insurance Underwriters to find local auto insurance companies in the area where you will be living and provide you coverage through them.
- AIG also provides international service for autos through American International Underwriters. They specialize in insurance for those living temporarily in other countries.
Whatever method you choose for finding international auto insurance coverage, it's important to have some kind of insurance if you are going to drive in a foreign country. If you don't have it, you'd be better off taking a train or a bus.