What’s needed to drive with US car insurance in Canada, when you need to get Canadian insurance, and things to consider while driving in Canada.

American auto insurance works in Canada, eh? Beauty!

Have you ever wanted to take a road trip to Toronto, Montreal, Vancouver, Winnipeg or even Alaska?

To do so you need to drive in Canada. While you may think you need to buy additional insurance at the border as you do in Mexico, the fact is in Canada you don’t need to worry about it in many cases.

However, there are several other things to consider before driving in the Great White North. It’s why US car insurance in Canada may not work in all situations.

Driving with US Auto Insurance in Canada

Canada is the only foreign country where U.S. auto insurance is generally recognized nationwide. As long as you’re traveling to Canada on a short-term basis as a “tourist,” purchasing Canadian auto insurance is not required provided you already have a valid U.S. license, registration and auto insurance policy.

As you do back home, as a U.S. drivers you are required to carry your license, registration and proof of insurance with you in Canada. Canadian officials also require you carry a “Non-Resident Inter-Province Motor Vehicle Liability Insurance Card” issued by your insurance company. To get this, just call your agent and tell him or her you need a Canadian insurance card

(yes, they should know what it is, or at least know who to call about it).

Oh yeah, you need a passport or a federally-approved travel document to get into (and out of) Canada in the first place. The days when you could cross the border without this documentation are a thing of the past.

Getting Canadian Auto Insurance (If You Need To)

You don’t need to worry about it if you’re only in Canada for a few days. However, if you plan on moving to Canada or or otherwise driving there for any length of time as anything other than a tourist, such as for college or an extended work-related excursion, you may very well have to get Canadian auto insurance.

While Canadian auto insurance is somewhat similar to auto insurance in the U.S., bear in mind all provinces and territories employ some form of “no fault” auto liability insurance, or auto insurance where your policy pays for your own liability-related damages.

Minimum liability limits in the Canadian provinces and territories are significantly higher than in U.S. states. Most provinces and territories require a liability minimum roughly equivalent to a $200,000 combined single limit (CSL). Although this is in Canadian dollars, it’s still considerably more than required anywhere in the U.S. Canadian auto insurance also often includes components of disability insurance and even life insurance in the form of final expense coverage not seen in American auto insurance coverages.

In some provinces auto insurance is partially or entirely a government operation. Ontario’s state-run auto insurance program is comprehensive, but particularly complex. Private auto insurance is available in other provinces, however, such as Alberta and Nova Scotia.

Canadian Things to Watch For (Other Than Moose)

Speed limits in Canada are expressed in kilometers per hour and considerably lower than in the U.S. The standard highway speed limit in Canada is 80 kilometers per hour, or just under 50 miles per hour. Posted speed limits on rural highways can be up to 100 kilometers per hour, but even that’s only around 62 miles per hour. Also bear in mind road signs may be in French, particularly in Quebec.

DWIs are dealt with very severely in Canada. In fact U.S. citizens found driving in Canada with any alcohol-related offense on their records are subject to immediate deportation, no matter how minor or how long ago the offense was. Americans with any prior DWI conviction must apply for a waiver from the Canada Border Services Agency, the Canadian Embassy in Washington, D.C., or any Canadian consulate in the U.S. before they can drive legally in Canada. This process can take weeks or even months.

Radar detectors are illegal in Quebec, Ontario, Manitoba, the Yukon and the Northwest Territories. If you are caught with one in these areas, even if it’s off or broken, it may be confiscated and you may be heavily fined. All the more reason to review your US car insurance in Canada – before driving there. Leave your detector at home if you plan on driving at all in these areas.

How auto insurance is different from state to state, when it’s OK to drive between states, and when it’s time to switch your state coverage.

Got auto insurance? You need not fear this sign.

In the United States, auto insurance is necessarily a state-level concern. Each state has its own laws. But this begs the question:

If you drive to another state are you still covered?

Fortunately the good news for road trippers everywhere is that answer is a resounding “yes” … probably.

Know Your State Limits

State minimum liability coverages vary rather dramatically. They range from a paltry 10/20/5 in Mississippi (that is, in a single accident $10,000 for bodily injury to one person, $20,000 for bodily injury to any group of people, and $5,000 for property damage) to a somewhat more substantial 50/100/25 in Maine. Several states other than Mississippi, including California, Massachusetts and New Jersey, still only require $5,000 in property damage coverage. Seriously, when was the last time a new car cost $5,000 anywhere?

To address this most policies have a built-in “out of state coverage” which automatically covers you at state minimums in another state should those minimums be above your policy. Before driving out of state, and especially if you live in a state with low liability requirements, check with your insurance agent to verify this coverage before crossing the border. Chances are you’re fine, but it doesn’t hurt to check.

Note if you carry liability and corresponding uninsured and underinsured (UM/UIM) limits of at least 50/100/50 – which many insurance professionals recommend in the first place regardless of what state you live in – you satisfy even the toughest state legal requirements for auto insurance, thereby rendering the issue irrelevant. The bottom line is given adequate coverage, if you’re in another state and just visiting you’re good to go.

When to Switch Insurance Between States

The general rule is you should carry your auto insurance in the same state your vehicle is registered in. Indeed, many states including Nevada and Florida require you to purchase in-state auto insurance before you register your vehicle. Most states require you switch your registration within 90 days of moving.

If you’re staying with the same company, switching insurance should be a rather seamless process. However only the largest insurance companies are active nationwide, and even some of them aren’t in all 50 states. For example Farmers Insurance is a major, established auto insurer in the western states, but has a much smaller presence on the east coast.

If you are switching companies either by choice or by necessity after moving to a new state, be sure to notify your old insurance agent of your cancellation date as soon as possible so you can be properly credited for any unused premium.

A Temporary State? Better Stay Where You Are

When it comes to picking up and moving to a new state, switching auto insurance should be a no-brainer. However, there can be a considerable gray area when it comes to a temporary move such as for college, especially if you don’t intend the move to be permanent.

The quandary is, while actually in school is a college student considered a resident of his home state, or the state where he or she is in college? In many cases as far as the insurance company is concerned the answer is the latter, particularly if that company isn’t licensed in the state where the school is.

While switching insurance can result in the student losing discounts associated with being on the family policy, sometimes it’s the only way to stay covered. Check with your agent to see how such a situation applies to you before you find yourself in a particularly nasty claim dispute.

How to avoid inaccurate quotes by providing specific information, verifying your driving record, and running your credit check sooner than later.

When quoting auto insurance, there's no such thing as TMI.

Have you ever been given a quote for auto insurance only to find that when the policy is written the premium is nowhere close to what you were told?

This happens to a lot of people, and often times it’s because the insurance company found information which wasn’t provided but ultimately had a profound impact on the price. Doing your homework before shopping for insurance quotes can save you money – and a big headache – later on.

Basic Information for an Insurance Quote

Getting the best auto insurance quote relies entirely on the information provided. While it should be obvious to provide basic information on drivers and vehicles, some other bits of information may not be. For example, knowing how many miles you drive to work one-way or what ZIP code your car is parked in can make a difference as well.

While year, make and model of your vehicle is sufficient to run a quote, providing the full VIN during the can uncover some sometimes surprising differences. In addition to identifying your specific vehicle, a VIN also provides detailed information regarding your vehicle’s specifications. While not terribly common, there can be significant differences in insurance ratings between nearly-identical vehicles. If that’s the case with you, a quote using a VIN will identify the issue right away.

Also make sure you’re quoting the same liability and full coverage levels from company to company. Insurance agents call it “comparing apples to apples,” and it’s important.

Check your Driving Record Before Quoting

When looking for the best quote it’s better to have too much information than not enough when it comes to tickets, accidents and claims. List all accidents, tickets and claims you’ve incurred in the last five years, no matter how trivial you think they may be. While some companies will look at the full five-year history, others may only be interested in the last three years. Also, not all companies look at the same things. This can potentially result in a substantial difference in quoted premiums.

Many states provide online driving histories on their DMV web sites for a small fee. If you need to refresh your memory on things that happened several years ago, this can be a good resource.

But you don’t have to do that.

Instead, have an insurance agent run a full driving history profile on you. These histories not only include tickets, but also include claim information that won’t be found in state DMV databases. These are also the reports that insurance companies use when rating their auto insurance policies. Knowing what’s on the source documents definitely helps.

These driving history reports can and do have occasional errors. Don’t be afraid to ask your agent for a copy of this report and point out any problems. A good agent will work with you to ensure any negative, erroneous information is disregarded by underwriting.

Give Yourself Some Credit

Many insurance companies offer discounts based on credit. While bad credit usually just means there’s no discount, people with particularly good credit can get very substantial discounts of up to 40 percent with many companies. Typically the information needed for a credit score is a full Social Security number and current address.

Keep in mind, credit checks made by insurance companies are not the same as a full credit check made by a bank. Insurance agents don’t have access to or use your standard FICO credit score. Instead the credit score they use for quoting and rating purposes is typically determined by proprietary means. In other words, there’s really no way to determine your credit score from an insurance quote. What information the agent can provide you generally has no relevance outside the insurance company.

While the credit check is not actually necessary until the policy is written and goes to underwriting, getting it done at the quote stage gives you the most accurate quoted premium. In terms of knowing exactly what you’ll pay, running the check sooner than later is far superior to simply saying your credit is “good.”

Why there isn’t a “woman’s discount,” how women can save money on car insurance, and how to best utilize discounts.

Women have the advantage!

While many things in today’s marketplace are geared towards women, the fact is car insurance really isn’t.

While rates among the sexes may not be entirely equal, the auto insurance shopping process by and large is.

One might be tempted to look for auto insurance discounts specifically tailored towards women.

However save yourself the energy: they don’t exist.

An Even Playing Field for Women… sort of

Insurers have to be very careful to tailor their rates and discounts based on tangible statistical data. Giving special discounts to women or making cheap car insurance for women (or to men, for that matter) without any other statistical qualifiers is considered discrimination, and that’s illegal.

That said auto insurance rates for women do tend to be slightly lower than they are for men, all other things equal. This is just as true at age 18 as it is at age 65. The reason for this goes back to statistics. Across the board women are involved in slightly fewer accident and claim situations than men are. Therefore, they pay less in premium. Rest assured the old sexist stereotype of a “woman driver” simply doesn’t wash in the insurance world. If anything, the opposite is true.

Women: Do Your Research

The best way to get cheap car insurance for women is to shop around. Rates from company to company can and do vary a lot, so a little research can do a whole lot of good. When shopping for car insurance, be sure to provide the full VIN for all vehicles, how many miles you drive to work, who drives your vehicle and how many accidents or claims you’ve had in the past five years.

Don’t lie on the latter point, underwriters will find out if you do.

Make sure you quote the same deductibles and liability limits when you shop for auto insurance. A good benchmark to use is a 50/100/50 split limit or $100,000 combined single limit (CSL) for liability, and a $500 collision and $100 comprehensive deductible for full coverage.

Sensible automobiles are cheaper to insure than exotic sports cars. While it may bruise your ego a bit to drive a minivan, at least you can take solace in the fact it’s nowhere near as expensive to insure as a sports car.

Remember different insurance companies look at different things when considering quotes. Too much information is better than not enough.

Ladies Should Look for Discounts

Auto insurance discounts are commonly available for women who bundle insurance coverages with the same company. Insurance carriers routinely offer auto insurance discounts to individuals who buy homeowners or renter’s coverage from them.

Some companies also offer auto insurance discounts with a life insurance purchase. By the way, all things equal women get better life insurance rates than men because – statistically speaking – they tend to live longer.

Many insurance companies offer discounts designed to attract business from young families. For example, some companies offer a “new parent” discount for women (and men) who have small children, typically preschool age or younger. Older drivers can take advantage of discounts by taking defensive driver courses.

How to get cheaper auto insurance, when you should lower your liability limits, raise deductibles, or drop full coverage altogether

When to consider cutting auto insurance out of the budget.

No one wants to pay too much for car insurance. After all, if one can save some money by eliminating unnecessary expenses, why not consider your insurance bill?

It’s not always a good idea to skimp on car insurance. Being cheap is great – being dumb is not. The ideal is to purchase coverage that will be there for you in a worst-case scenario in the most cost-effective manner possible.

In order to properly budget car insurance, the trick is to know how car insurance works. The main ways people save on their premiums are to either lower their liability limits or raise their collision and comprehensive deductibles.

Other types of coverage, such as uninsured and underinsured coverage (UM/UIM), and medical payments in states that don’t have “no-fault” laws, represent a small percentage of the auto insurance premium and therefore don’t generate significant savings when changed. These are best left alone.

Lowering Liability Limits If It Makes Sense

Liability limits are often expressed in a group of three numbers, such as 25/50/15. This example represents limits of $25,000 in injury coverage to one person in an accident, $50,000 in injury coverage to any number of persons involved in a single accident, and $15,000 in property damage. This 25/50/15 level is the state liability minimum in Idaho and several other states. Some states have even lower minimum liability requirements.

In other words, keeping your insurance at state liability limits is often insufficient for anything other than minor accidents. If you’re found at fault totaling a new Mercedes and injuring three people, the state minimums will be exceeded very quickly. You will probably be personally liable for the difference. Accordingly many insurance agents recommend carrying liability limits of no less than 50/100/50 – often more in metro areas.

Raising Deductibles if You Can

If you’re still making car payments, your bank will require you to carry full coverage. If you don’t, your lienholder has the right to “force place” insurance on your car and bill you for it. Force placed insurance is almost always very expensive. Keeping your own full coverage is a much cheaper alternative.

Fortunately most lienholders only require deductibles of $1,000. In addition, most personal auto insurers offer $1,000 as their highest deductible. This gives you some leeway in maximizing your insurance value.

When considering your deductible, ask yourself how much you are willing to personally pay to get your car fixed and then set your deductible accordingly. Deductibles are typically available in $0, $250, $500 and $1,000 levels, although your company may offer something different.

To minimize your insurance cost don’t set your deductible any lower than what you’re comfortable with, and to give you peace of mind don’t go any higher. Also remember collision and comprehensive deductibles are different and separate. Many insurance companies cover glass repair (but not replacement) at a $0 deductible for a small cost or even no additional cost at all. Many people keep their comprehensive deductible lower than their collision deductible.

Consider Dropping Comprehensive and Collision?

No state requires collision or comprehensive coverage. Once the car is paid off, you can consider dropping full-coverage entirely. However, if you do this know there’s no coverage if your car is stolen or vandalized, and no coverage to fix your car unless someone else hits you and is found at fault.

In this situation ask yourself if you would be OK walking away from the vehicle if something major happened to it. If you can afford it, then dropping full coverage may be a good idea. Alternatively, it is often possible to drop collision coverage but keep comprehensive, or vice versa. Talk to your agent for more information on that.