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All You Ever Wanted to Know About Insurance

Getting Auto Insurance With a Foreign Driver’s License

If you’re one of the millions of foreign nationals who visit the United States every year, you may want to be able to drive while you’re here.

International students, foreign visitors and non-U.S. residents are all permitted to drive in the States, but you’ll need a valid license or permit as well as proof of insurance.

The legal requirements vary from state to state and depend on how long you plan to stay in the country. Your insurance needs will also depend on whether you’re renting a car, driving someone else’s or purchasing one of your own. Your insurance professional can help you understand these requirements and recommend options for auto insurance.

International driving permits

There are a few items you should take care of before coming to the U.S. if you plan to drive a car here. Make sure you have a current driver’s license from your country. Unless you are from Canada or Mexico, you may also need to get an international driving permit (IDP). Check with the motor vehicle departments in the states where you plan to drive to see what’s required.

You must obtain an IDP from your home country. It’s not a driver’s license on its own; rather, it serves as proof that you possess a valid driver’s license from your country. You may need both your license and an IDP to drive legally in some states.

Rental car or personal coverage

If you are renting a car in the U.S., the rental company will offer insurance as part of the agreement you sign for use of the vehicle. These policies are convenient to purchase, but they can be expensive and usually provide only limited coverage. You may be better off buying your own policy, which can be obtained through your insurance professional.

If you are borrowing a car from a friend or family member, make sure you are covered on their automobile insurance policy. They may need to add you as a driver, or you may need to obtain your own coverage.

Non-U.S. residents can drive up to a year in most states with a valid IDP or foreign license, but at some point, you’ll need to get a state-issued driver’s license. To get this license, you must pass a written test and a practical driving test. Keep in mind that some insurance companies will not insure you unless you are getting a U.S. license within a certain period of time.

How to save money on insurance

Auto insurance coverage is often more expensive for nonresidents than for U.S. citizens, but your insurance professional can point out factors that may reduce your insurance costs. Those might include:

  • Good driving history. Some companies will give you credit for a good driving record in your country. You may need to provide documentation that indicates you have a safe record and the number of years you have been driving. Accidents and moving violations can hurt your chances of getting coverage and increase your premiums.
  • Deductibles. The deductible is what you owe before the insurance company begins paying on a claim. Carrying more of the financial risk from an accident yourself can lower your premium. Raising a deductible by several hundred dollars may save you quite a bit on the cost of insurance.
  • Type of vehicle. The model and year of the vehicle you plan to drive makes a big difference in pricing. A sports car will cost more to insure than an SUV or minivan, for example, and a new car is more expensive to insure than an older car. If you are thinking of purchasing a car or have a choice in what you’ll drive, consider the cost of insurance in your selection.
  • Get more than one quote. Your insurance professional can help you shop for coverage by getting quotes from different companies and explaining the differences in coverage.

U.S. citizens abroad

Many of the same restrictions noted above for foreign drivers apply to American drivers when they travel outside the U.S. While some countries will accept a valid U.S. license, you may want to get an IDP. In the U.S., IDPs can be obtained through the AAA and the National Auto Club.

You’ll need to purchase additional insurance since U.S. auto policies generally don’t cover you while driving in another country (except in Canada). Your insurance needs will also be affected by the countries you’re traveling to and how long you plan to stay. Here are a few tips:

  • Know foreign-country requirements. If you are driving through several countries, you need to know the rules for each one. Some may require that you obtain special permits or have certain insurance coverages. Rental car companies have age restrictions as well.
  • Get enough coverage. While the countries you’re traveling in may require only minimal coverage, the U.S. State Department recommends you buy coverage that is at least equivalent to what you carry at home. You’ll want a policy that protects you against personal injury, liability, collision damage and theft.
  • Know the rules of the road. Take the time to familiarize yourself with each country’s rules and customs. What side of the road do you drive on? Is it legal to honk your horn? Are you required to carry emergency gear? Do you need a special road permit to drive on a divided highway?

Whether you’re visiting the U.S. or you’re an American traveling abroad, don’t take driving for granted. Talk to your insurance professional well in advance to secure the coverage you need. Then you can hit the road, confident that you’re in compliance with the law and insured against any potential mishaps.