How does my Canadian car insurance policy cover me when I’m driving internationally?

  1. In the rest of Canada or USA
  2. Outside of Canada and the USA

Car accidents are settled according to the laws in the jurisdiction where the accident occurs. For this reason, it is important to understand how your Canadian car insurance policy responds when you are driving internationally to properly protect yourself.

Your car insurance coverage is generally defined in two parts:

Section A: Third Party Liability – Liability coverage can protect you from a lawsuit brought against you for the Bodily Injury or Property Damage you do to others. For instance, while driving, you hit someone else’s car, fence or other property and damage it. They may hold you responsible for the value of the repairs. If the accident involves physical injury to a person, the costs can be much higher.

Section B: Your own car’s damage – The cost to repair or replace your vehicle in the event of a collision or non-collision related loss.

The territorial limits of the Standard Car Policy does not provide coverage outside of Canada & the USA.

When I’m driving internationally, what does my Canadian car insurance policy cover me for?

  1. If you are driving your own car in Canada or the USA, your car insurance policy will apply. If renting a car while away, your car insurance liability coverage automatically transfers to the rental vehicle but will not automatically cover you for damage to the rental vehicle itself. You will need to add that coverage to your car insurance policy before you leave on your trip. Generally, the coverage added to your policy to cover the physical damage to the rental car is far less expensive than the rental car agency will charge. Adding this coverage extends your own coverage conditions to the rental car*. This means that if your collision coverage includes a $500 deductible, those details apply to the rental car.Although not excluded, driving in the USA can be riskier for insurers.  The legal system in many states can create situations where lawsuits are more likely and settlements more costly.  As a result, Canadian insurers are more concerned about Canadians driving in the USA and will want to be made aware of your expected US driving activity.  A common guideline is the insurer will want to know if you expect to exceed 30 days per year in the USA.*Other conditions apply. Verify your specific policy conditions and circumstances with your broker.
  2. The standard Canadian Car Insurance policy will not cover your liability outside of Canada and the USA. Whether driving a rented vehicle or one borrowed from a friend or relative, you can be held responsible for a collision which causes bodily injury or property damage to others. This coverage can be provided by a Canadian personal excess liability policy.If renting the vehicle, ask the rental agency about the coverage they offer with the vehicle. Under these circumstances, you can often buy both the liability coverage and the rental car coverage directly from the rental car agency.

This information is general and for illustration purposes only. Other factors may affect your coverage. We highly recommend that you contact your broker to discuss your specific circumstances.