Do you need additional auto insurance to travel out of province or to the United States?

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Before you set off on your trip, review your policy to make sure you have the protection you need

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Are you planning to travel to another province or US state? If so, you may be preoccupied with finding affordable housing, preparing a list of fun activities, and remembering to bring a jack to change a flat tire, just in case.

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However, it is also essential to consider the implications of your trip on your car insurance. Does your cover stay intact when you cross borders? Or do you need additional coverage to keep your policy valid?

There’s nothing more stressful than finding out you’re responsible for paying a pile of legal, medical, or repair bills because you don’t have the proper auto insurance coverage. Therefore, before embarking on your trip, it is wise to review your policy to ensure you have the protection you need.

Is your auto insurance policy valid for travel anywhere in Canada and the United States?

Your car insurance policy usually follows you no matter where you travel, as long as it’s in Canada or the United States. Therefore, you do not need to purchase additional coverage from your insurance provider.

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Legislation in Ontario and BC requires insurers to provide drivers with coverage for motor vehicle accidents that occur anywhere in Canada and the United States. However, since auto insurance is provincially regulated, the coverage you qualify for will vary depending on where you live.

Additionally, your insurance policy may contain limitations and exclusions that take effect when you enter a new jurisdiction. Therefore, it is always a good idea to contact your insurance provider to check what is covered and what is not. They can assess your policy and advise you of any restrictions that apply once you leave your province.

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Do you have to inform your insurer when driving outside your province of residence?

You no need to inform your insurer whether you’ll be driving across interprovincial borders or heading south into the United States. However, this rule only applies to short journeys. You should notify your insurance provider for extended trips, usually those lasting six months or more. This is because your insurance coverage may become invalid if you drive too long outside of your province of residence.

Suppose you plan to stay outside your province beyond the maximum allowable period stated in your policy. In this case, you may have to pay a higher insurance premium to keep your policy in force.

Why You Should Consider Additional Out-of-Province and USA Travel Coverage

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Although additional auto insurance is not required for travel within Canada and the United States, you may have gaps in coverage that can put you at serious financial risk.

First, you should consider increasing your liability insurance. Although each province requires drivers to have a minimum level of coverage, the threshold is generally low. For example, in Ontario, the minimum amount required by law is $200,000. That might not be enough if you’re involved in a collision in the United States, where insurance payouts are generally higher. If the court decides that you are liable and enters a judgment against you for $500,000 and your car insurance will only cover $200,000, you will be liable for the remaining $300,000. For this reason, most insurers recommend getting liability coverage between $1 million and $2 million.

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Second, determine if adding family protection coverage to your policy is worth it. This optional coverage (or rider) protects you and your eligible family members against underinsured or uninsured drivers. This is especially advantageous if you plan to visit a place like New Hampshirewhere drivers are not required to have car insurance.

For example, let’s say you are seriously injured in an accident for which the other driver is found at-fault. However, their maximum liability coverage is not enough to cover your medical expenses. In this scenario, your family protection coverage would kick in to cover the shortfall (up to the limit specified in your policy).

Some provinces, such as Ontario and British Columbia, require a minimum level of compensation for drivers who injury or damage caused by underinsured or uninsured drivers. So your existing auto insurance policy may already provide the protection you need. However, the maximum coverage you are entitled to may not be enough in some cases, so consider adding the Family Protection Rider to your policy to enhance your protection.

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Road Trip #1 - Canada
Road Trip #1 – Canada Photo by Kijiji Autos

What happens if you are involved in an accident outside your province?

In general, car insurance claims are settled according to the laws of the jurisdiction where the collision occurred. So if this happened in Manitoba, the laws of that province would govern the legal proceedings and the subsequent payment of the insurance.

Some provinces, such as Ontario and New Brunswick, operate under a no-fault insurance system. This means that in the event of a collision, you are compensated by your own insurance company, whether you are at fault or not. In other provinces, such as Saskatchewan, a policyholder can opt for a tort system instead, they can sue the offending driver for additional damages.

The procedure for filing a claim in another province or US state is the same as for filing one in your province of residence. You will contact your insurance broker and provide them with all the necessary information. details to process your request.

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How to Get the Right Car Insurance Coverage for Your Trip

Your existing auto insurance policy applies across Canada and the United States, so you can rest easy knowing you’re fully protected when you hit the road.

Still, it’s wise to review your policy to familiarize yourself with the limitations of your coverage, such as where you’re going and how long you’ll be away. You should also assess the unique risks you will face on your trip and identify any gaps in your coverage that could spell financial disaster.

If you can’t decipher your policy, contact your car insurer and ask them to clarify anything you don’t understand. They can also recommend options to upgrade your coverage so that you have the appropriate level of protection you need for your trip. This way, you won’t be hit with a massive bill if you’re involved in a collision or other traffic incident.

LowestRates.ca is a free, independent rate comparison website that allows Canadians to compare rates for various financial products, such as home and auto insurance, mortgages and credit cards.

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