Your insurance history abroad could have a lot of influence on the rates you pay for an expat car insurance policy when you return to the United States.
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.
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Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from October 31, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
If you’re coming back to the United States after time spent living in a foreign country, you’re naturally going through a process of re-adjusting to many things. And one of those will involve re-acquiring U.S. car insurance.
Here’s what you need to know about the U.S. insurance market at a high level, what to consider upon returning, and how your time spent abroad could affect your rates here.
Quick Facts
Every state except New Hampshire requires drivers to carry a minimum amount of car insurance.
Expats might pay more for their car insurance than people who haven’t lived abroad.
Your insurance coverage abroad could affect your rates when you return to the United States.
How does car insurance for expatriates work?
When you return to the U.S., you’ll be allowed to travel the road on a foreign driver’s license or an international driver’s permit for a limited amount of time.[1] The rules depend on which state you move to.
You can also buy a temporary car insurance policy if you hold a foreign driver’s license. This could be your best option because it lets you drive with coverage in the U.S. for three months. You can also purchase a one-year policy if you hold an international driver’s permit.
Beyond the one-year mark, you must obtain a U.S. driver’s license and seek new coverage. The rate you pay for coverage in the U.S. can be dictated, in part, by your insurance coverage overseas.
If you can provide contact information and documents and demonstrate you had international car insurance, you’re more likely to pay a lower rate to insurance companies in the U.S. This is because you’re showing your insurer your ability to carry insurance, and the company can see how frequently you’ve filed claims.
Important Information
If you can’t prove you carried insurance abroad with a third party or had a period when you didn’t carry international auto insurance, insurers will see this as a gap in coverage. This could cause you to pay higher rates than you would have otherwise.
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Car insurance basics
When you pay a premium for your car insurance policy, you’re buying protection from your insurer. A standard liability policy covers injuries or damage you cause in a car accident up to a certain dollar amount. It won’t cover damage to your personal property.
Every state except New Hampshire has a legal requirement for motorists to carry the state’s minimum amount of car insurance. In New Hampshire, if you don’t want insurance, you must be able to demonstrate your ability to meet your expected liability requirements out of pocket instead.
Some states may require additional coverage, such as personal injury protection or uninsured/underinsured motorist coverage. And if you’ve taken out a car loan or lease, the lender might require you to buy comprehensive and collision coverages to insure your car and protect against a total loss.
Claim: This is what you file with your insurer after you’ve been in an accident or in case of theft. If your claim is approved, you may receive funds from your insurer to help cover the cost. But if your insurer denies your claim or you don’t have enough coverage, you could be financially responsible for some or all costs.
Declarations page: A car insurance declaration page summarizes your auto insurance policy, including your specific coverage details, term length, policy number, and information about your car.
Deductible: Before your insurance kicks in, you’ll have to pay a set amount out of pocket. This is known as a deductible. If you opt for a higher deductible, you may be able to save on your premium.
Discounts: Many insurers offer savings with a wide range of discounts, like safe driving, being a good student, or bundling your auto policy with your home insurance.
Endorsements: Also known as riders, endorsements are changes or additions to your policy. A few examples of car insurance endorsements include roadside assistance and rental car reimbursement.
Exclusions: These are circumstances or perils your policy won’t cover, and they’re outlined in a section of your policy. For example, if you have a liability-only policy, your insurance won’t cover you for glass damage, vandalism, or accidents with animals.
Policy: Also known as an insurance plan, a policy is a contract between you and an insurance company that helps protect you financially if you’re in an accident or your car is damaged or stolen. Policies typically last for six months or one year.
Premium: This is what you pay for your insurance policy, sometimes referred to as an insurance rate. You typically pay your premium on a monthly basis, but some insurers will allow you to pay for the whole period up front (often for a small discount).
Types of car insurance
Whether you’ve been away from the U.S. car insurance market for an extended period of time or you’re looking as a first-time customer, here’s a rundown of some common types of car insurance coverage so you can find the best value for you:
Bodily injury liability coverage
Bodily injury liability covers medical expenses for injuries you cause to the other driver and passengers involved in an accident.
Property damage liability coverage
Property damage liability helps pay for damage you cause to someone else’s property or vehicle.
Personal injury protection (PIP) coverage
PIP covers medical expenses for your and your passengers’ injuries suffered in an accident, regardless of who caused it. PIP is sometimes called “no-fault coverage.”
Uninsured/underinsured motorist coverage
Uninsured motorist coverage pays for your medical bills and repair bills if you’re involved in an accident caused by a motorist without car insurance. Underinsured motorist coverage kicks in when a driver who caused an accident doesn’t have enough coverage to pay for your medical bills and repair bills.
Collision coverage
No matter who’s at fault, collision coverage pays repair bills when your car is damaged in a crash. If you financed your car, the lender might require you to have collision coverage.
Comprehensive coverage
Comprehensive coverage pays to repair or replace your car when it’s been damaged in an incident other than a collision. For instance, it typically covers damage caused by hail or a fallen tree limb. Lenders often require you to have comprehensive coverage.
How much car insurance coverage you need
Every state except New Hampshire requires drivers to carry a minimum amount of liability-only coverage. While this type of insurance covers injury to another person and damage to their car when you cause an accident, it doesn’t cover your medical bills or damage to your vehicle.
Full coverage, on the other hand, is a collection of different types of insurance, including liability insurance, collision coverage, and comprehensive coverage. In general, most drivers choose full-coverage insurance. The National Association of Insurance Commissioners (NAIC) estimates that 75% of insured drivers purchase collision insurance, while 79% buy comprehensive coverage.
A serious accident can lead to property damage, medical issues, or more. When deciding on how much insurance you need, make sure you have enough coverage to protect your finances in a worst-case scenario. Be sure to consider where you live, your assets, how much deductible you can afford, your car’s value, and your healthcare situation.
An insurance agent or your insurance company representative can help you determine the best coverage for your needs.
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Factors that affect your car insurance rates
Your insurance coverage while living abroad isn’t the only thing that can affect your car insurance rates. Insurance companies review several details, including your:
Driving history: This includes whether you’ve recently caused a car accident or received a traffic ticket, both of which can cause your car insurance price to go up. Some insurers will check your U.S. driving record and records from abroad, while others will consider you a new driver, which could also cause your rates to go up. The same may hold true if you have no driving record at all, as a brand-new driver has no behind-the-wheel experience, and insurers may see them as higher-risk.
Type of car: The kind of car you own can affect how much you pay for car insurance. For instance, your premium might be higher if you drive a car that’s prone to theft or that costs a lot to repair.[2]
Age: Younger drivers with less on-the-road experience usually pay more for coverage than older drivers with more experience. That’s largely because drivers younger than 25 tend to get into more accidents than older drivers do. Senior drivers also generally pay higher rates because of reduced reflexes and the increased risk of serious injury in the event of an accident.
Location: If you live in an area where car thefts, vandalism, or accidents are more common, you might pay a higher price for car insurance.
Lapses in coverage: Going without coverage can result in higher car insurance rates because an insurer might see you as a high-risk driver.[3]
Credit history: Most states allow insurers to use your credit history when determining your quote. Insurers see drivers with higher credit scores as less likely to file an insurance claim, so you can expect to pay a lower premium if your credit score is higher.
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*Quotes generated for Insurify users within the last 10 days. Last updated on October 31, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from October 31, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on October 31, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from October 31, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
Expat car insurance FAQs
Car insurance for expats might be more expensive than it is for other drivers. But expats can keep their costs down by opting for only the minimum amount of required coverage and by comparing quotes from different insurance companies to find the best deal.
If you still have questions, review the information presented here.
Does your U.S. car insurance policy cover international travel?
In most cases, your U.S. car insurance policy doesn’t cover international travel because the car you drive in another country isn’t likely to be the same car you drive in the U.S. Unless you move abroad and have your own vehicle shipped there, you won’t be covered.
What is the minimum amount of car insurance coverage you need to buy upon returning to the U.S.?
Each state has its own minimum requirements, so be sure to check these when you plan your move back to the U.S. In most cases, you’ll need to carry liability coverage, which includes bodily injury liability if you hurt someone else while driving a car, and property damage liability for any damage you cause.
Do you need to buy additional car insurance on top of the state minimum?
In most cases, you only need the state minimum in auto insurance coverage. But if you purchase a new car, your lender may require you to carry collision and comprehensive coverages. In either event, several categories of insurance add-ons might be helpful if you want extra coverage and peace of mind.
What’s the best way to get the cheapest auto insurance policy?
Shopping for car insurance quotes offers you the best opportunity to find the most affordable auto insurance rates. By comparing quotes from several insurers, you can find the best rates and secure your next policy for your return to the United States.
The Hartford. "What happens if car insurance lapses?."
Sarah Archambault
Sarah Archambault enjoys helping people figure out how to manage their finances and credit. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans. Her work has been featured on Credit Karma, Experian, LendingClub, Sound Dollar and USA Today Blueprint. She also writes for national insurers, banks and financial institutions like Aetna, MassMutual, Stripe, and UnitedHealthcare.
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Konstantin HalachevVP of Engineering & Data Science
7+ years experience in data analysis
Ph.D. in Computational Biology
Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.