May 30, 2017

Does my auto insurance travel with me?

picture of auto insurance premium In the state of Florida, like most other states, insurance coverage follows the car – not the driver. Your auto insurance generally does travel with you, but first think of insurance following the car before it follows the driver.

Suppose your car is in the shop and you borrow your mother’s car to run a few errands. Sure, you might have your own insurance policy, but your mother’s coverage is primary on her car. If you rear-end another driver, any claim that driver files will first go against your mother’s insurance and not yours. The same applies across the board. If mom borrows your car, any accident claims arising from an accident she causes will go against your policy first.

Coverage Out of State

Now, forget about borrowing cars but remember that insurance follows the car. This is also true when you drive a car out of state. Suppose you drive your own vehicle up to Asheville, NC for a two-week stay in the mountains. During your stay, the roads ice over and you slide slightly off the road and collide with a tree. Your car is damaged and requires $2,500 worth of repairs. Will your insurance protect you in the same way as if the accident happened in Tampa? The short answer is YES.

In Florida and nearly all other US states, policies are portable and in full force whenever the driver is travelling across state lines in his/her own car. Coverage benefits are based on the driver’s home address of record. Whatever coverage options you purchase based on your home state will be afforded to you in the event of an accident out of state. Your rates could still increase if you’re determined to be at-fault, but your coverage protection will be no different than if the accident had occurred a few blocks away from home. Your coverage travels with you remains in force in all 50 US states.

With regard to the Asheville, NC example, many auto insurance policies offer provisions specially designed to cover drivers travelling out of state. Some policies will even reimburse a driver for lodging while his/her car is being repaired, assuming the accident occurs outside of a designated radius. Drivers should check their policy to see if this coverage applies.

Generally, the only time out-of-state car insurance might be contested or deemed invalid is when the driver moves to a new state permanently. In that case, the driver is required to purchase a policy based in the new state to satisfy its unique coverage requirements. If your current provider also policies in both your old and new states, you must still notify your carrier of the address change. In most cases, your carrier will issue you a brand new policy to coincide with your new state of residence.

Coverage Outside of the US

Drivers should review their policy for applicable coverage outside the US. Most policies list provisions for coverage in Canada and Mexico. The majority of US policies extend their coverage into Canada, but not into Mexico. Canada upholds many similar traffic laws and safety standards as the US. Mexico is considerably less regulated and it may be far more difficult to pursue a property damage or theft claim in Mexico.

US states bordering Mexico (Texas, California) may offer auto insurance policies with optional coverage for those who frequently drive their own car in and out of Mexico. If this option is not available, separate supplemental insurance specifically underwritten to protect US drivers’ cars in Mexico should be purchased before crossing the border. Remember to review your specific coverage for policy details and ensure you’re properly protected before driving across any international borders.

References:

Esurance – http://blog.esurance.com/driving-out-of-state-does-your-car-insurance-travel-with-you/#.UoKCmPmsim4

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