Summer. The time of year when we all try to get away from our regular schedules and travel. Are you planning on driving to another province or U.S. state? If so, it’s vital to consider the implications of your trip on your car insurance. Does your coverage remain intact when you cross borders? Or do you need additional coverage for your policy to remain valid? Therefore, before you embark on your trip, reviewing your policy is wise to ensure you have the protection you need. Let’s review some helpful tips for car insurance when traveling out of province and to the U.S.
Validity of Your Car Insurance Policy When Traveling
Your car insurance policy generally follows you no matter where you travel. More specifically, so long as it’s within Canada or the U.S. As a result, you don’t need to purchase extra car insurance when traveling out of the province. Legislation in Ontario mandates that insurers offer drivers coverage for road incidents that originate anywhere in Canada and the U.S.
Should You Inform Your Insurance Provider?
While you may be preoccupied with finding affordable accommodation or preparing a list of fun activities, don’t ignore your insurance. There’s nothing more stressful than discovering you’re responsible for paying a stack of legal, medical, or repair bills because you lacked the proper car insurance coverage. It’s important to note that although driver coverage for road incidents is mandated, your insurance policy may contain limitations and exclusions that take effect when you cross into a new jurisdiction. Therefore, it is always a good idea to contact your isure representative before leaving for verification. We can go over what’s covered and what’s not when it comes to car insurance and travel.
Duration of Your Trip
Short Trips: You don’t need to inform your insurer if you’re driving to another province or the U.S. on a short trip. A short trip qualifies as anything under six months.
Longer Trips: You should notify your insurance provider if taking an extended vacation, which is six months or longer. You may not know that your coverage may become invalid if you drive outside your home province for too long.
If you plan to be outside your province beyond the maximum allowable period outlined in your policy, you may have to pay a higher insurance premium for your policy to remain in effect.
Do not cancel your car insurance when traveling!
One of the more helpful tips for car insurance when traveling is not to cancel your insurance. If you’re leaving your car at home while traveling for a few months, canceling your car insurance is not recommended. This is because car insurance companies will flag you and your vehicle for months that go uninsured. These will leave you with increased rates when the time comes that you decide to resume your policy. Instead, you can save money by downgrading your insurance policy to stored or parked car insurance or to a simple basic comprehensive coverage plan. This way, if your car experiences flooding or a break-in while you are gone, you will still have coverage. At the same time, you won’t be paying the usual price of a full coverage package while you are away.
Can you cross the border in a borrowed vehicle?
In the wake of increased car theft globally since the start of the pandemic, customs officials in the U.S. and Canada are always on the lookout for stolen vehicles. Additionally, they are keeping an eye out for people trying to avoid duties on cars or trucks they purchased out of the country. As a result, alarm bells will go off anytime someone tries to cross the border in a vehicle that is not theirs. “If you wish to borrow a vehicle, you must obtain explicit permission from its owner. When crossing an international border with a borrowed vehicle, ensure you have written permission from the owner and their direct contact information if [we need it],” an IBC spokesperson says in an email statement.
Can I drive my friend or family member’s car in the USA?
Is it legal to drive someone else’s car in another country? Yes, driving someone else’s car is legal, as long as it is insured and you have consent. In other words, if you are driving your friend’s car and an accident occurs, the expenses of the damage will receive coverage under your friend’s policy. However, be aware that if you are borrowing someone else’s car, you are going to be subject to closer scrutiny. Because officials are on the lookout for stolen vehicles, you may be delayed at the border if the name on the vehicle registration is different from your own. Particularly, if the car owner’s address also differs from yours. Furthermore, you will need to have a valid driver’s licence to be able to operate a vehicle at all.
Car insurance and travel: Is additional coverage necessary?
Though purchasing extra car insurance isn’t necessary for travel across Canada and the U.S., you may have gaps in coverage that can expose you to dire financial risks. This is how you can combat this:
Increase your Third-Party Liability coverage
In Ontario, the minimum amount required by law is $200,000. This can prove insufficient if you happen to get into a collision in the U.S., where insurance payouts are typically higher. For this reason, most insurance providers recommend obtaining third-party liability coverage between $1-$2 million.
Family Protection Coverage
This optional coverage (or endorsement) protects you and eligible family members from under- or uninsured drivers. This is especially true if you are unfortunate enough to be in an accident and sustain severe injuries. If the driver’s liability coverage isn’t enough to cover your medical bills, your family protection coverage will kick in and cover the shortfall.
Some provinces, like Ontario and B.C., mandate a minimum level of compensation for drivers who incur injuries or damages from uninsured drivers.
What happens if you’re involved in an accident outside of your province?
In general, car insurance claims are settled based on the laws of the jurisdiction where the collision occurred. That means, the laws of that province will govern the legal proceedings and subsequent insurance payout. Some provinces, like Ontario and New Brunswick, operate under a no-fault insurance system. This means that in the event of a collision, you receive compensation from your own insurance company, whether you’re at fault or not. In other provinces, like Saskatchewan, a policyholder can opt for a tort system instead, where they can sue the at-fault driver for extra damages.
The procedure for filing a claim in another province or U.S. state is the same as filing one in your home province. You can contact your insurance broker and provide them with all the necessary details to process your claim.
The right car insurance coverage for your trip
As mentioned above, your existing car insurance policy applies across Canada and the U.S., so you can rest easy knowing you’re fully protected when you hit the road. Before planning your trip, be sure to review your policy to become familiar with any limitations in your coverage, such as your destination and the length of time you’ll be away. Need assistance interpreting your policy? Contact your isure representative and ask them to clarify anything you don’t understand. They can also recommend options to enhance your coverage so that you have the appropriate car insurance when traveling out of province and to the U.S.
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