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Car insurance for Americans overseas

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Get coverage for your international road trips

Driving overseas isn’t always as simple as getting behind the wheel and hitting the open road. Depending on the destination, your American driver’s license and insurance might not be accepted, and you’ll also need to be aware of the differences you’ll encounter on the roads and what to do if you have an accident.

Overseas car insurance options for Americans

The most important forms of coverage you need are medical and personal liability. Travel insurance will generally be the most cost-effective way of finding these types of coverage, but you should check your policy to make sure it includes coverage while you’re driving overseas. And since many policies only provide coverage when driving in the US, Canada and Mexico, you may want to consider an international car insurance policy. However, it depends on how you’re planning on driving:

  • If you’re renting a car: You can get car insurance through the rental company. If you plan on doing this, it may be a good idea to consider zero deductible rental car insurance to reduce the cost of your deductible in the event of an accident. In most cases, this is available as a standalone policy or included with travel insurance.
  • If you’re borrowing a car: Check what kind of policy the car owner has. It might not cover you, or it might not have enough coverage for your needs. Once again, travel insurance can provide liability and medical coverage when you’re abroad. The ideal option may be to contact the car insurer and see if you can adjust the coverage or add yourself to the policy.
  • If you’re traveling outside the US with your car: International car insurance will generally be required. You will also typically need a carnet, which should be available through the same organizations that offer overseas car insurance.

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International Driving Permits

Not all countries will recognize an American driver’s license. If you are pulled over in one of these countries and don’t have an International Driving Permit (IDP), you may be treated as if you were driving without a license. IDPs require a full American driver’s license but are universally recognized, valid for 12 months, and will let you drive legally almost anywhere in the world.

Which countries require an International Driving Permit?

  • IDPs are valid in over 150 countries. Check with the DMV to find out if you’ll need one for your upcoming trip.

What you need for an IDP. IDPs are valid for 12 months and have the following requirements:

  • You must be over 18 years of age.
  • You must have a valid US driver’s license (not a probationary or learner’s permit).
  • You need two recent photos of yourself (passport-sized and signed on the back)
  • You need to pay the application fee. This varies depending on your method of application, where you are traveling, which agency you obtain the IDP through and more.

Where to get an IDP. There are only two agencies that are authorized to issue IDPs in the US.

  • American Automobile Association (AAA)
  • American Automobile Touring Alliance (AATA)

International Driving Permit FAQs

Carnets are your car’s passport for getting across the border

You can think of a Carnet de Passages en Douane, or carnet for short (pronounced car-nay), as a passport for your car. You will generally need one if you’re temporarily taking a car outside of the US. Without it, you’ll need to pay customs charges in the local currency when bringing your car across a border.

When you get an ATA carnet in the US, you will avoid paying duties and import charges on property (in this case, your car) that will be re-exported within 12 months.

A carnet is not required for US-made cars, campervans or motorcycles entering most countries in Europe or North America for holidaying purposes. For all other vehicles, and most other countries, you will either need a carnet or you will need to pay the local import duty. Check the USCIB website for a list of countries where you could use a carnet.

What kind of coverage do I need for driving internationally?

Most countries will require at least liability coverage. You’ll want to check with the country you’ll be traveling to to find out their specific requirements. But the risk for obtaining only liability is the same overseas as the risk is here in the US. So weigh your options and choose wisely.

If you’re renting a car, you can obtain insurance through the rental company. But if you’re driving your own car, you’ll need to make sure you’re covered through your own insurance or through an insurance policy you purchase from the country you’re visiting. Consider a short-term policy. Most US insurance policies are valid in Canada. Check with your provider for any special requirements. But if you’re driving in Mexico, you’ll need to purchase a Mexican insurance policy. You can purchase one online or along the border in both the US and Mexico.

Tips for driving overseas

Driving overseas carries significant risks, and you should exercise great caution on unfamiliar roads. Keep these

    1. Know how to contact your travel insurer. Keep your travel insurance info with you while traveling so you can easily get in touch with your insurer as needed. Take down their emergency contact number and keep it in your phone or somewhere safe just in case you lose the papers.
    2. Know how to use your insurance: Make sure you know how to use your overseas coverage. After an accident, it’s important to contact your insurer as soon as possible.
    3. Consider an International Driving Permit even if you don’t need one. It’s another form of internationally recognized identification in case your passport goes missing. It’s also the only type of formal identification that comes in nine languages, making it useful almost everywhere.
    4. Watch out for counterfeit IDPs. These are available online and are usually sold at inflated prices. If it costs more than $20, it might be fraudulent. If it’s being sold on eBay, it’s probably also a fake. The AAA and AATA are the only two authorized issuers.
    5. Remember that some countries have different driving laws. If you’ve only driven in North America, you’re probably used to driving on the right side. Many places in Europe drive on the left, which will cause issues if you fall into old habits. You might also need to change how you merge, pass or read speed limit signs.
    6. Watch out for dangerous road conditions. You can expect dangerous roads in many other countries. Poorly maintained roads, reckless drivers, pedestrian traffic and bad road lighting can be the least of your problems, not to mention transport crime or corrupt local police.
    7. Consider travel insurance. Unfamiliar traveling conditions means things are more likely to go wrong for travelers, and personal liability and medical expenses can be potentially devastating. For the coverage it delivers, travel insurance can be exceptionally cost effective. Keep your travel insurance info with you while traveling so you can easily get in touch with your insurer as needed.

    Bottom line

    Driving abroad can be tricky, but it doesn’t have to be. Know the rules for the country you’re traveling to, and make sure you’re prepared.

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    Andrew Munro

    Andrew writes for finder.com, comparing products, writing guides and looking for new ways to help people make smart decisions. He's a fan of insurance, business news and cryptocurrency.

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