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Does my car insurance cover me if I cross the US border?

If you're planning a road trip north or south of the border, you've hopefully remembered to pack your passport, a few changes of clothes and a toothbrush -- but when you're driving your car out of the country, it's also important to confirm that your auto insurance policy will cover you for any damage, accidents or thefts that might occur while you're abroad.

car insurance cross borderBefore you pack your bags and drive off, here's what you need to know about car insurance coverage when crossing international borders.

International car insurance coverage

Driving in Canada

When crossing the U.S. border into Canada as a nonresident tourist, all United States-based auto insurance carriers will still cover your vehicle while you are in the country, according to the U.S. Bureau of Consular Affairs.

"The personal auto policy that you and I and everyone else in the United States has defines the coverage area as the U.S., its territories and possessions, and Canada," says Kevin Foley, a New Jersey insurance agent with PFT&K Insurance Brokers.

However, you should contact your insurance provider before your trip to obtain a "Motor Vehicle Liability Card / Canada Inter-province" insurance card, which is available at no additional charge from your insurance carrier. If you do not have the Canada-specific insurance card, you may be liable for a fine if a Canadian police officer requests your proof of insurance.

If you are moving to Canada as a permanent resident, you will need to swap your current car insurance policy for a Canadian policy. If you are traveling on a tourist visa, however, your current policy -- with a Canadian insurance card -- will cover you for any damage or liability claims during the course of your vacation.

When traveling to Canada in your own car, you will need to pack several important documents. These are: proof of U.S. citizenship (most often a passport, but you may also use a birth certificate for children younger than 16), your vehicle registration and your Canadian insurance card.

Driving in Mexico

If you plan to head south of the border, your car insurance situation is not as straightforward.

A number of car insurance companies do offer coverage for physical damage to your car when driving a short distance into Mexico -- generally only 25 to 50 miles south of the border, although Progressive offers an RV policy that extends physical damage coverage throughout all of Mexico, but must be supplemented with a Mexican liability policy.  U.S.-based insurance companies are not permitted to offer liability insurance in Mexico; this type of policy must be purchased separately from a Mexican insurance carrier.

What do you need to buy? When driving in Mexico, it is mandatory to purchase a liability policy, which will provide a specific amount of liability coverage for damage to other cars, property or people, typically covering 50,000 pesos’ worth of damage (approximately $3,800). Because this dollar amount won’t cover much more than a simple fender-bender, you may wish to purchase additional liability coverage to increase your limits. A federal law states that in the event of any death resulting from a car accident (whether passenger, bystander or someone in another vehicle), the responsible party must be able to pay a minimum of $25,000, so it's a good idea to extend your insurance coverage to at least that minimum, if not considerably higher.

Under Mexican law, drivers must be able to demonstrate proof of financial responsibility in event of a car accident, and U.S.-issued insurance policies don't meet this requirement. According to the Arizona Department of Insurance, failure to purchase a Mexican-issued insurance policy could result in hours in a Mexican jail or a substantial fine.

You should consider purchasing a temporary Mexican car insurance policy for your vehicle that includes the following:

  • Civil liability coverage.
  • Legal assistance.
  • Travel assistance (such as towing).
  • Medical expense coverage.

Such policies can easily be purchased online in advance of your trip, and are relatively affordable: For instance, based on quotes from several Mexican insurers, a 2011 Subaru Forester could be insured for six months for between $318 and $413, depending on the provider you choose and the types of coverage you wish to include.

When entering Mexico, make sure to bring your driver's license, passport and proof of Mexican insurance. If you are planning to travel any farther than the Border Zone (approximately 12 miles past the U.S. border), you will also need to fill out a temporary import permit with a security deposit for your vehicle. You can learn more about this at the Mexican consulate website.

Check with your agent first

Before venturing to either Canada or Mexico -- or lands beyond, such as Belize or Guatemala -- it's important to check in with your insurance agent to let him know about your trip and find out any specific details regarding what is covered or not on your policy. By determining if there is any specific documentation you'll need when crossing the border, and making plans to purchase international car insurance if necessary, you'll be well-prepared in the event of a car accident or car damage in a foreign land.

If you are leaving the country with your vehicle for an extended period (such as six months or more), you might also consider contacting your agent for your U.S.-based car insurance to ask about canceling or suspending the policy while you are out of the country with your vehicle.

"I would consider canceling, but before you cancel make sure you are in a healthy competitive market where you can get coverage without a problem," Foley says. Additionally, he adds, if you’ve received a loyalty discount for sticking with your insurer for a long period of time, you would lose that discount, leading to increased pricing.

If you are traveling for a shorter period or don't want to risk facing problems when you reinstate insurance, consider dropping your insurance to the minimum coverage level by raising your deductible and eliminating any riders for the period you'll be away.

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