Where Is the Car Insurance Used?

At some point, almost all drivers end up either moving to another state, driving across state lines, or driving in Mexico or Canada. All of these scenarios affect how your existing car insurance will apply depending on your location. Read on to learn how your coverage will apply in different states and in different areas of North America.

Mexico Car Insurance

Mexico requires drivers to have civil liability insurance, which protects you in the event you cause bodily injury or property damage in a covered accident. However, your American bodily injury liability insurance is not valid in Mexico. Whether the physical damage portion of your liability insurance will apply in Mexico is up to your individual carrier.

If you plan on driving your own car into Mexico, consider buying a short-term Mexican auto insurance policy. The policy will provide you with the liability coverage you need to drive legally in the country. You can either purchase Mexican car insurance online prior to your trip or you can buy coverage in any number of American towns that border Mexico.

If you plan to rent a car in Mexico, the issuer of the credit card you use to do so should provide coverage. Nevertheless, it is still a wise idea to purchase the Mexican auto insurance offered by the rental car company. Remember, if you have an accident and are not properly covered, you may not be able to leave the country until you have paid for the damages.

Driving in Canada

Whether you drive your own vehicle in Canada or rent a car, your existing American auto insurance should be valid. Of course, each carrier is different, so contact your agent to verify that your coverage will protect you before you drive in Canada. When you drive across the Canadian border, you will have to show proof of car insurance coverage, so have your insurance cards handy. Keep in mind that Canada’s driving laws are really quite stringent, so drive carefully regardless of your insurance coverage. For example, if you are caught driving under the influence in Canada, you may be excluded from the country.

Across State Lines

How your current car insurance policy applies across state lines depends on whether you are driving through, temporarily visiting, or making a permanent move. Of course, if you are simply driving through a different state on a trip, the policy you have from your home state will protect you regardless of the state in which the loss occurs.

If you plan to visit another state for several months, your current coverage should still protect you as well. Each carrier has different rules about visiting other states, however—some say a policyholder must reside in a state for ten months out of the year to be insured in that state. In most cases, it is a good idea to insure your car in the new state if you plan on staying for six months or longer.

If you plan on moving to another state permanently, you will need to register and insure your vehicle in that state and get a new driver’s license. The amount of time you have to do so varies from state to state, but the average time allowed is about 30 days from when you entered the state. Once you register your vehicle in your new state, you will need to insure it in that state as well. Make sure your new policy meets the state’s minimum liability requirements and includes any other required coverages, such as medical payments coverage or uninsured/underinsured motorist coverage.