Auto Insurance Basics for Driving in Canada and Mexico

Auto Insurance, Insurance
Auto Insurance Basics for Visiting Canada, Mexico

As our nearest neighbors, Canada and Mexico offer Americans the chance to visit by car. Before you go, though, you’ll want to make sure you understand the auto insurance basics for driving in these countries.

Here’s what you need to know about car insurance coverage in each country.

Canada

Canada is the easier country for Americans to drive in, because your car insurance will generally cover you north of the border.

You can use your U.S. auto insurance as long as you’re just visiting Canada, the State Department says.

The Canadian Tourism Commission suggests that U.S. drivers planning to visit Canada ask their auto insurance company for a free “Non-Resident Inter-Province Motor Vehicle Liability Insurance Card,” which serves as evidence of insurance coverage. If you plan to rent a car in Canada, the commission advises bring a copy of your insurance policy.

If you’re driving a borrowed car or trailer, bring a letter of permission signed by the owner. If you want to rent a car in the U.S. and drive it into Canada, make sure the rental company allows that and then bring along a copy of the rental contract.

Moving to Canada? Some big U.S. insurers also sell policies there.

Mexico

If you want to drive in Mexico, you’ll need Mexican car insurance.

“U.S. automobile liability insurance is not valid in Mexico, nor is most collision and comprehensive coverage issued by U.S. companies,” the State Department advises.

Many auto insurance companies offer a Mexico travel add-on, or apply it automatically in border states like Arizona and Texas. This provides limited coverage within 25 to 75 miles of the border, but it does not meet Mexican liability requirements.

You can buy Mexican insurance online or in cities and towns along the border, on both sides. Your insurance company may recommend a Mexican provider. Geico and Esurance, for instance, direct customers to International Insurance Group.

The State Department warns that insurance “is considered invalid in Mexico if the driver is found to be under the influence of alcohol or drugs.” Also, police may take you into custody after an accident until they determine whether you are liable and whether you are financially capable of paying any judgment against you, although Mexican insurance generally covers bail.

You’ll also need a “Temporary Import Permit” if you want to drive your car beyond the free-trade zone that generally extends about 25 miles from the border and takes in all of Baja California, according to the Mexican government. The permit costs $51 ($45 online), plus a deposit of $200 to $400, depending on the model year of the car. The Mexican border state of Sonora offers a special permit that is free for certain areas and discounted for others.

That’s what you need to know to extend your road trip north or south of the border. Now you just have to remember the speed limits are in kilometers per hour.

Aubrey Cohen is a staff writer covering insurance and investing for NerdWallet. Follow him on Twitter @aubreycohen and on Google+.


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