Auto Car Isurance System in Canada, United States, and Europe
Canadian Car Insurance
Car Insurance in Canada
If you’re thinking of taking a trip up to Canada and you know you’ll be driving, international car insurance is probably on your mind.
It’s important to know the basics when it comes to car insurance for foreign drivers in Canada. Whether you’re driving your own car or renting a vehicle in Canada, there are several factors to consider.
Determining Your Coverage
Car insurance in Canada is mandatory, regardless of whether you’re driving your personal vehicle or renting one. So if you’re planning on driving in and around the country, make sure you obtain car insurance for driving in Canada, or expect to pay a large fine.
In most cases, you are covered by your existing U.S. car insurance coverage to drive in Canada.
However, it’s important to take a look at your individual policy to ensure your specific auto insurance company covers your car in Canada. Always confirm your coverage before you leave on your trip.
Once you’ve confirmed coverage, inform your provider of your travel plans. They’ll mail you proof of insurance for your trip. (See “Required Documents” below).
Renting a Car in Canada
If you choose to rent a car in Canada, your policy will likely cover you; however, your coverage may not be as robust. For example, you may be covered only for:
- Liability expenses.
- Medical costs.
You also have the option to secure basic coverage on the vehicle from the rental company.
Credit Card Coverage
You may be able to obtain insurance from the credit card company you use to pay for your Canadian car rental. Call the number on the back of your credit card before traveling to see if they offer coverage, and what their coverage entails.
Required Documents
Proof of U.S. Citizenship
While abroad, you’ll need to have proof of citizenship and ID. This includes:
- U.S. passport.
- Passport card.
- NEXUS card.
Proof of Insurance
You may need a current insurance ID card when driving in Canada. In most cases, you’ll need to obtain a Canadian Insurance Card before leaving. Call your insurance company in advance of your trip to:
- Let them know of your intent to travel to and drive within Canada.
- Confirm your coverage.
- Request a Canadian Insurance Card.
- You’ll generally need to leave about 5-7 business days for the company to mail the card, so it’s best to call a couple weeks before you leave. The Canadian government will not accept e-mailed or faxed cards.
Valid License
You must have your current state driver’s license with you to prove your eligibility to drive.
Make sure to check the renewal date before you leave so you don’t end up with an expired license while traveling.
If you do need to renew your license, check out our Renewing Your License section to learn how.
Vehicle Registration
When driving your vehicle across the border into Canada, make sure to have your vehicle registration with you.
This will help you prove you aren’t driving a stolen vehicle into the country.
In Case of an Accident
Whether it’s through your insurance company or through a major credit card, your car insurance will cover you in case of an accident.
Simply call your insurance company, go to the claims department on their website, or contact your credit card company and report the accident as you normally would.
NOTE: If you obtain coverage on a rental car through the rental company, make sure you understand the coverage in case of an accident.
United States Car Isurance
Car insurance
Which insurances do you need for your car in the US?
One of the most surprising things about car insurance is that it isn’t mandatory in some states, e.g. Alabama, Iowa, Mississippi, New Hampshire, Pennsylvania, etc. These states have ‘financial responsibility’ laws, requiring you to post a bond, cash deposit or approved self-insurance with the state to cover damages if you’re involved in an accident.
Motorists in states where car insurance is compulsory must provide proof of insurance at the time of vehicle registration and may be required to carry it in their vehicles at all times. Buying car insurance is more complicated in the US than in most other countries and may include the following types of cover:
Liability Insurance
Liability insurance includes bodily injury liability, i.e. injuries you cause to someone else, and property damage liability, which is damage caused to someone else’s property, including other vehicles. In most states, liability motor insurance is compulsory, although it doesn’t necessarily include unlimited liability. Most states have laws setting minimum levels for liability insurance, but these are usually woefully inadequate. ‘Responsibility’ limits are set by each state for death or injury to one person, death or injury to more than one person, and property damage in excess of a certain amount.
If your liability after an accident exceeds your amount of insurance and you have personal assets, these are used to pay damages, if necessary, until you’re bankrupt.
Lawsuits often run into millions of dollars and litigation lawyers are among the richest legal vultures. Liability limits can usually be raised significantly for a modest extra premium. To protect yourself against astronomical damages, you can also take out a personal liability umbrella policy which increases your liability limits to a level that covers almost any event.
No-fault Insurance
Around 25 states and the District of Columbia have some form of Personal Injury Protection (PIP) or no-fault insurance law. This means that if you’re involved in an accident, you can claim (up to certain limits) from your own insurance company for personal injury sustained in an accident, rather than go to court and try to prove that the other party was at fault. In states without a no-fault law, the victim files a claim against the other driver, irrespective of whether or not the driver is insured, and is paid only if it can be proved that the other driver was responsible for the accident. If you weren’t to blame and can prove it through witnesses or a police prosecution of the other driver, make sure your insurance company is informed, or you may lose your good driver (no-claims) discount.
Where applicable, PIP insurance is usually compulsory and covers bodily injury only and not vehicle damage. Those insured under PIP insurance receive prompt payment from their own insurance company, but their right to sue for general damages is usually restricted. Motorists insured in states with liability laws should ensure that their insurance covers them when travelling in states with no-fault laws. Most insurance companies automatically extend their policies to cover states with no-fault laws.
PIP cover may duplicate insurance provided by health or disability insurance policies. PIP insurance provides benefits for medical and hospital costs (the level depends on your policy), plus lost wages or income continuation, replacement/essential services, survivors’ loss/death benefit, and funeral expenses. Lost wages and replacement services are payable up to a maximum amount for maximum periods.
PIP Medical Expenses Insurance
It’s possible to buy Personal Injury Protection cover for medical expenses only. PIP medical expenses pays the medical expenses of anyone injured when travelling in your car, irrespective of fault. Depending on your policy, it may also pay your medical bills when you or your family members are travelling in someone else’s car, or if you’re hit by a car while walking. Unlike other health policies, the medical payments part of a vehicle policy pays for all medical expenses incurred, without excesses (deductibles) or co-payments (called ‘first dollar coverage’).
If you have comprehensive health insurance, you may not require this protection, although it also covers anyone travelling in your car. In some states, you can choose your PIP health insurance provider, who can be someone other than your car insurance company, e.g. your employer’s health insurance company.
Catastrophic Medical Expenses Insurance
Some insurance companies offer catastrophic medical expenses cover, protecting you against abnormally high medical bills. Whether or not you have this type of insurance depends on the level of your health insurance. If it has limitations, you’re advised to have catastrophic medical expenses cover.
Uninsured Motorist Insurance
To protect yourself against accidents with uninsured motorists and hit-and-run accidents (whether driving or walking), you should have uninsured motorist insurance. Uninsured motorist laws have been enacted in many states, requiring insurance companies to include in their basic policy cover against damage caused by motorists who aren’t insured. Uninsured motorist cover is usually equal to the minimum financial responsibility limits set by a state and is compulsory in some states. If you have collision insurance, you usually don’t need uninsured motorist insurance.
In many states, the penalties for driving without insurance are derisory, and there may be no penalty at all unless you have an accident. However, when the paltry financial penalties are compared with the often high insurance premiums, it’s hardly surprising that there are so many uninsured motorists. If you have an accident involving another vehicle, the chances of the driver being uninsured are extremely high in some cities, so it’s important to calculate the financial consequences of an accident involving an uninsured motorist.
Under-insured Motorist Insurance
This is similar to uninsured motorist cover and covers you when another motorist is responsible, but has insufficient insurance to cover the injuries or damage to property (although, if he has sufficient assets, you can still sue him).
Collision Insurance
Collision cover is for damage caused by you to your own vehicle, irrespective of who was responsible for the damage. Collision cover usually has an excess (deductible); the higher the excess, the lower your premium. Whether it’s necessary (or wise) to have collision cover usually depends on the value of your car. Collision and comprehensive cover are usually required by a car loan or a leasing company. With collision insurance, you usually don’t need uninsured motorist insurance.
Comprehensive Insurance
Comprehensive cover is for loss of the vehicle resulting from fire, theft, vandalism, collisions with animals, storms, floods, riots, explosions, earthquakes, falling objects, plus accidental glass breakage, e.g. from a stone thrown up by another vehicle. It doesn’t cover you against accidents involving other vehicles or objects, for which you require collision cover. Comprehensive cover usually has a lower excess than collision cover.
Miscellaneous Extra Insurance
This insures you against a wide range of costs, including a rental car when your car is being repaired, and towing and labour in the event of an accident or breakdown (also provided by automobile clubs). If you frequently use rented cars, you may be interested in a policy that includes collision damage waiver (CDW) for rented cars, which may also be provided free by a credit card.
Premiums
Insurance premiums are high, particularly for men under 27 and those who live in inner cities, where driving conditions are more hazardous and where car theft is endemic. Many factors influence the cost of car insurance, including:
- The make and type of car (and how expensive it is to repair);
- The type of insurance cover required;
- The age and value of the car;
- Your age, sex (some companies offer a discount to women drivers) and occupation;
- What you use your car for (e.g. business or pleasure);
- Your driving experience and driving record;
- Your accident record and no-claims bonus (good-driver discount);
- Who will drive the car;
- Your health (you may be required to pay an excess if you suffer from epilepsy or diabetes);
- Where you live and whether your car is stored in a locked garage overnight;
- The number of miles you do each year;
- Any extras required, such as a rented car when your car’s being repaired after an accident.
Some ways to reduce your insurance are to:
- Make comparisons - shop ’til you drop!
- Insure your car with your household insurance company, which may yield a discount of 5 to 10 per cent.
- Take advantage of insurer’s discounts, usually 5 or 10 per cent of the premium. Most insurance companies offer discounts for cars fitted with air bags, automatic seat belts, anti-theft devices or anti-lock brakes. Many also provide low-mileage discounts and discounts for more than one car, no claims (good-driver discounts, e.g. if you make no insurance claims in three years), drivers aged over 50 or 55, driver training courses (e.g. defensive-driving), and even good student grades (are diligent students safer drivers?). Drivers aged over 65 can complete a ‘mature driving course’ in some states, guaranteeing them a three-year discount on their insurance premiums.
- Don’t get uninsured motorist cover unless required by state law. If you’re hit or injured by an uninsured motorist, repair and medical bills are covered by your collision insurance (provided you have it!), PIP cover and other medical insurance.
- Drop your reimbursement for a rented car. If you’re a two-car (or more) family, you may be able to do without a rented car while one car is being serviced or repaired. Insurance companies have limits on what they pay for a rented car.
- If you have an employee hospitalisation plan, you could drop your car insurance medical payments, which duplicates medical insurance you already have.
- Drop the emergency towing service, which you probably don’t need unless you have an old car susceptible to breakdowns. Insurers often limit what they provide for a tow, which is too little anyway. Join the AAA or another automobile club providing an emergency towing service.
- If your car isn’t a status symbol, consider buying a ‘low profile’ car with a low insurance rating and, if you’re considering a house move, choose a low insurance area.
- One thing not to do in order to save money on car insurance is reduce your liability limits!
When completing your insurance proposal form, make sure that you state any previous accidents or driving offences; otherwise your insurer can refuse to pay out in the event of a claim. Drivers who have been banned for drunk or dangerous driving must usually pay at least double the standard premium for three years (even penalty points on your licence increases your premium). Your insurance company may cancel your policy if you’re found guilty of drunk driving, speeding or recklessness resulting in injury or death. For general information on car insurance contact the Insurance Information Institute, 110 William Street, Floor 24, New York, NY 10038 (212-346-5500, www.iii.org).
Auto Isurance in United Kingdom
Driving in the United Kingdom requires a valid driver’s licence, a registered vehicle, and insurance. When you buy a new car, vehicle taxes will be paid during the purchasing process, which may also include the registration taxes and fees. If the taxes are not paid by the dealership when you provide the car payment, you will pay all the taxes when you go to register for car tags at the Drivers and Vehicle Licensing Agency (DVLA).
UK registered vehicles are taxed a Vehicle Excise Duty or VED. This tax includes hydrocarbon oil duty as well as the vehicle tax. There will be a VAT tax on fuel purchases. You may also see VAT tax on your import, depending on where you have imported the vehicle from. You will see a first time car registration fee on your registration payment to the DVLA when you buy a new or used car.
Insurance Requirements
The United Kingdom requires you to have car insurance if you drive or own a vehicle. The type of insurance you elect to have is up to you, although you must have at least third party car insurance. Third party car insurance is the minimum government requirement, and is also known as liability insurance.
Third party insurance will only pay for damages to another person’s property, any injuries the other party might have sustained, or an incident in which the driver is found at fault. It will pay out in the event you cause an incident where there is damage or injury to the car and driver, or to their passengers. You will not be covered for your own vehicle. It does not cover theft or fire. It is the least expensive policy you can obtain in the UK. However, the costs of repairs to your own vehicle if you have an accident may be high enough to negate any savings you make.
Third Party Fire and Theft Insurance
You do also have the option of taking out third party fire and theft insurance. This provides you with more coverage than regular third party insurance. You still have the same level of cover as the regular policy, however you are now also covered for theft or fire, ensuring that if you suffer damage or loss you will be covered. Again, there are limitations to this type of policy. You will not have comprehensive cover, but that might be unimportant depending on the age of your car. It is important to consider all potential issues when purchasing car insurance in the UK.
Comprehensive Car Insurance
This is the third level of coverage for car insurance. As an expat you may be inclined to take out this insurance if you import a newer vehicle. Comprehensive insurance will provide cover for damage to your vehicle and other vehicles. It has a range of cover for fire, theft and accidents if you are at fault. Comprehensive cover can vary from company to company. It is important to compare the different policies under comprehensive cover to determine the best level of coverage. You want to have cover that fits your situation and needs. Some companies provide additional services such as breakdown cover.
Gaining Enough Cover
Recent studies have shown that UK drivers tend to be underinsured, which can cause financial problems after an accident. Vehicles are becoming more expensive to repair and associated costs are also rising. When you look for insurance cover in the United Kingdom, you want to make sure you are paying for services you will actually use, but also that you are fully covered.
In the event that the other driver is at fault but does not have enough cover, you may need to seek help from your insurance company for repairing the damage to your car. Online comparison tools will help you to find the right amount of cover for your car.
Auto Isurance in Europe
Many car insurance policies give you cover for driving in Europe for up to 30 days, just remember to speak with your insurer before you leave to confirm this.
The standard cover for driving in Europe provided by many insurers is often the most basic third party cover, so make sure to check with your provider first to see what level of cover you have, and to make sure they know when you're going to be heading there so they can issue your green card.
If you have a car that's expensive to repair you may want to consider upping your level of cover from the standard third party. Your insurer may charge you for this but without additional cover, if you're involved in an accident that's your fault or where the fault is unknown, you won't be able to make a claim for repairs needed to your car.
Some insurers offer European car insurance as an optional extra when taking out a policy. When it comes to getting a quote through Confused.com, once you have your list of prices, click on the 'About Provider' button next to each provider to see whether they include EU cover or a green card.
A green card is issued to you by your insurer for use whilst driving abroad. It's a motor insurance certificate valid in Europe that can help making a claim or exchanging details with another driver or the local police whilst abroad, easier. Make sure to keep it safe with your other travel documents as it proves your car is insured.
Temporary insurance for Europe
As well as standard policies, it's possible to drive in Europe on a temporary policy. With short term insurance arranged through Confused.com it's possible to get cover for 1-28 days arranged instantly, so whether you fancy a week in the south of France or a quick weekend away to Germany, you'll be covered on a temporary policy.
To get a quote for temporary insurance, head to our temporary insurance page which has lots of information about short term policies and what they offer.
What else should I know about driving in Europe?
- Apart from remembering to drive on the opposite side of the road, it's worth reading up on the road rules including speed limits and drink drive limits for your destination so you don't fall foul of the law or end up in an accident.
- Many countries require you to carry certain things in your car or modify it for driving abroad. In France for example it's compulsory to carry a warning triangle, reflective jacket and alter headlamps so they don't dazzle oncoming drivers. The AA have produced a helpful guide displaying the EU driving requirements for many countries.
- If your number plate isn't in the new EU style that shows which member state the car was registered in, you're required to attach a GB sticker to your car.
- For more information, here's what you need to know before hitting the road.
- European breakdown cover isn't a legal requirement, but it could help you if you run into problems with your car when driving around Europe. Without cover in place, you could end up with a costly bill for recovery.