Driving to Mexico or Canada: what your insurance covers

In Canada, a U.S. auto policy generally covers you with the same coverages you have at home, and you just need to carry proof. In Mexico it does not: the U.S. Embassy in Mexico says plainly that "your U.S. insurance is not sufficient and you must have a separate policy," so you need Mexican auto insurance from an authorized Mexican insurer before you cross (U.S. Embassy & Consulates in Mexico). Driving in Mexico also requires a vehicle import permit beyond the border zone.

Canada vs Mexico at a glance

Driving in Canada

Standard U.S. personal auto policies define their coverage territory to include Canada, so liability, collision and comprehensive usually follow you across the border. Progressive says that if you drive to Canada in your own car or a rental, your U.S. insurance will usually protect you with the same coverages and limits you have at home (Progressive).

What to bring:

• Proof of insurance. Your regular card usually suffices, but you can ask your insurer for a Canadian non-resident inter-province motor vehicle liability insurance card. Carry a printed copy in case your phone has no signal.
• Registration. Border officers may ask for it to confirm the car is not stolen.
• Identity documents. A passport, passport card or NEXUS card for U.S. citizens.

Provincial minimums. Each province sets its own required liability. Allstate, citing the Insurance Bureau of Canada, reports that most provinces require at least $200,000 (Canadian) in third-party liability, while Manitoba and Nova Scotia require $500,000 (Allstate). Standard U.S. policy forms include an out-of-state provision that raises your limits to a province's required minimum if yours are lower, but a serious crash can still exceed them. how much liability coverage do you need? covers how to set limits.

Long stays. Policies are written for drivers who live in the U.S. If you will stay in Canada for months or move there, ask your insurer how long coverage continues; you may need a Canadian policy and license.

Driving in Mexico

Why your U.S. policy does not work

GEICO's page for its Mexico program states that your U.S. policy will not cover your car there and will not comply with Mexican requirements, and that Mexican law requires vehicles on federal roads to carry third-party liability insurance (GEICO). Liberty Mutual similarly says most U.S. policies are invalid or very limited in Mexico and that you need coverage from an admitted, authorized Mexican insurer (Liberty Mutual).

Some U.S. insurers extend limited physical damage coverage just across the border. For example, Progressive notes that physical damage coverage is available for its Texas policyholders who make occasional trips into Mexico within 25 miles of the border (Progressive). That covers damage to your own car only; it does not satisfy Mexico's liability requirement.

What a Mexican tourist policy covers

Several U.S. insurers refer customers to brokers that place Mexican policies. These are short-term policies, from a day to a year. Typical options include:

• Third-party liability, the legal requirement. GEICO's program advertises limits up to $1,000,000.
• Physical damage and total theft for your car, the Mexican equivalent of collision and comprehensive.
• Medical payments for you and your passengers.
• Optional vandalism or gap coverage.

If your car has a loan, GEICO notes your lender will likely require physical damage coverage while the car is in Mexico. Progressive's disclosures note that the Mexican insurers it refers customers to are surplus lines carriers not backed by any U.S. state guaranty fund.

Permits and papers

According to the U.S. Embassy, most travelers driving beyond the border zone need:

1. A Temporary Vehicle Importation Permit (TVIP), obtained at Banjercito modules at major crossings or online 10 to 60 days before entry. The cost is a non-refundable processing fee of $45 to $59 plus a refundable deposit of $200 to $400 depending on the vehicle's age. You must cancel the permit at the border when you leave, or lose the deposit.
2. An FMM entry permit for each traveler, unless you stay in a border city for less than 7 days.
3. A passport book or card.

The embassy lists areas where a TVIP is not required: the Baja California Peninsula, the Sonora Free Zone, Quintana Roo, and the border zone, generally within about 12 miles of the U.S. border. Liberty Mutual warns that traveling beyond the border zone without a permit is illegal and can lead to a denied insurance claim.

Rentals

GEICO notes that U.S. insurers generally cannot cover a Mexico-registered rental car, so rent with coverage from the Mexican rental agency. Not every U.S. rental company lets you take its cars into Mexico, and those that do may require you to buy their Mexican coverage. See accidents in a rental car: whose insurance pays for how rental coverage works in the U.S.

If you crash in Mexico

1. Call 911 for police or ambulance; the embassy lists that number for emergencies.
2. Call the claims number on your Mexican policy before leaving the scene, and follow the adjuster's instructions.
3. File the claim while you are in Mexico, as GEICO advises; waiting until you are home can complicate it.
4. For roadside breakdowns on highways, the embassy notes the Green Angels can be reached at 078.

Key takeaways

• A U.S. policy usually covers you in Canada with the same limits; carry printed proof and your registration.
• Most Canadian provinces require at least $200,000 (Canadian) in liability, so state-minimum limits may be thin.
• Your U.S. policy does not satisfy Mexican law; buy a Mexican tourist policy before you cross.
• Beyond the border zone, Mexico requires a Temporary Vehicle Importation Permit with a refundable deposit.
• After a crash in Mexico, call your Mexican insurer from the scene and file there.