Car Insurance for Immigrants: What to Know

Getting car insurance as an immigrant doesn’t follow just one process, as each state has its own requirements.

Jess Ullrich
Written byJess Ullrich
Jess Ullrich
Jess UllrichInsurance Writer
  • 10+ years writing insurance and personal finance topics

  • Former associate finance editor for Investopedia

Jess is a subject matter expert in insurance, banking, and other personal finance topics. Her byline has appeared in numerous top web media, including Investopedia.

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Chris Schafer
Edited byChris Schafer
Chris Schafer
Chris SchaferSenior Editor
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  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Amber Benka
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Amber Benka
Amber BenkaLicensed Insurance Agent

Amber Benka is a licensed insurance agent specializing in auto, home, commercial, life, and health insurance. She has owned the R.A.L Insurance Agency for four years.

Konstantin Halachev
Data reviewed byKonstantin Halachev
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Konstantin HalachevVP of Engineering & Data Science
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  • 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.

Updated July 18, 2024

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Whether you’re moving to the U.S. or just visiting, you’ll need car insurance to legally operate a vehicle. Even if you have a license from your home country, U.S. insurers will still consider you a new driver, and you’ll pay higher rates.

Finding affordable car insurance as an immigrant can be complicated. Below, you’ll learn how to navigate the process so you can secure the coverage you need to drive safely and confidently.

Quick Facts
  • Most insurers only consider U.S. driving history when making policy decisions.

  • New drivers typically face higher rates than more experienced ones.

  • You can reduce costs by comparing quotes from multiple companies and bundling your insurance policies.

How car insurance works in the U.S.

Car insurance protects drivers from the costs of accidents, damage, and other unforeseen incidents on the road. It also covers property damage and medical treatment for injuries sustained by drivers and passengers. If you don’t have car insurance, you’ll be responsible for covering vehicle expenses out of your own pocket.

These are the main types of car insurance coverage:

  • illustration card https://a.storyblok.com/f/162273/x/169fdfde11/liability-coverage.svg

    Liability

    Liability insurance includes coverage for bodily injury and property damage. If you cause an accident, bodily injury pays the injured person’s medical expenses and property damage helps cover the repair costs of the other person’s vehicle or other damaged property.

  • illustration card https://a.storyblok.com/f/162273/x/665da91bf7/comprehensive-coverage.svg

    Comprehensive

    You’re not required to carry comprehensive coverage, but it’s often included in car insurance policies. It covers damages caused by noncollision incidents, such as theft, vandalism, fire, hail, and animals.

  • illustration card https://a.storyblok.com/f/162273/x/7b43b14514/damage-from-aircraft.svg

    Collision

    Like comprehensive, collision coverage is also optional. It covers vehicle damage from a collision with another car or object, such as a tree or fence.

  • illustration card https://a.storyblok.com/f/162273/x/abffe6238f/financial-protection.svg

    Personal injury protection

    Also known as no-fault insurance, PIP coverage helps with medical bills, lost income, and funeral expenses for you and your passengers, regardless of fault.

  • illustration card https://a.storyblok.com/f/162273/x/5285c4cd74/uninsured-or-underinsured-motorist-coverage.svg

    Uninsured and underinsured motorist

    These coverages protect you if a driver who doesn’t have auto insurance hits you or if you’re the victim of a hit-and-run.

Driving without car insurance exposes you to various financial and legal risks. If you’re caught driving without an active insurance policy, you’ll receive a fine, and some states will even revoke your license. And if you cause an accident while driving without insurance, you’ll be liable for property damage and bodily injury costs.

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Factors that affect car insurance for immigrants

You’ll face unique challenges when trying to get car insurance as an immigrant, such as possible language barriers, the lack of a Social Security number, and limited driving experience in the U.S. But you’ll also feel the effects of factors common to all drivers, such as age, location, and the type of car you drive.

Below, you’ll find an overview of the factors affecting car insurance for immigrants.

Immigration status

Immigrants in the U.S. fall into two main categories: documented and undocumented. A documented immigrant is a person who has legal authorization to reside in the U.S., while an undocumented immigrant doesn’t. It may be more challenging for undocumented immigrants to get car insurance, as only 19 states allow undocumented people to get a driver’s license.

States that allow undocumented immigrants to obtain a driver’s license include:

Driver profile

Various factors make up a driver’s profile, and each can affect car insurance rates, including:

  • Age: Insurers typically charge higher premiums for drivers younger than 25.

  • Location: If you live in a city, you’ll probably pay more for insurance than someone living in a small town.

  • Gender: Women generally pay less for car insurance than men because they have a lower accident rate.[2]

  • Marital status: Married couples may receive better car insurance rates than single people in some instances where they qualify for discounts.

  • Claims history: You may pay higher premiums if you’ve filed claims in the past, depending on the type and cost of the claim.

  • Vehicle use: How you use your vehicle can affect rates, such as whether you use it for work or pleasure. Drivers who work for a rideshare company may pay more for insurance.

Driving history

Your driving history will significantly affect your insurance costs, as it’s the clearest indicator of what kind of driver you are. Insurance companies consider accident history, traffic violations, and DUIs to determine your overall insurance risk.

Credit status

Some states allow insurers to consider your credit score and other credit-related information when making insurance decisions. Insurers factor your credit into a credit-based insurance score and use it to predict the likelihood of an insurance loss.[3]

The states that ban or limit the use of credit in insurance decisions are:

  • California

  • Hawaii

  • Maryland

  • Michigan

  • Massachusetts

Type of car

Your vehicle type and cost can also affect your insurance rates. For example, if your car has a strong safety record, your premiums may be lower. On the other hand, if your car is a type that’s commonly stolen, your costs may be higher.

Learn More: How Much Car Insurance Do You Need?

Learn More: How Much Car Insurance Do You Need?

How much does car insurance for immigrants cost?

The average cost of car insurance in the United States is $212 per month. And since insurance companies treat immigrants as new drivers, their rates may be more expensive than rates for other U.S. drivers. Maintaining safe driving habits, taking advantage of discounts, and comparing car insurance quotes are some of the best ways to save money on your policy.

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How immigrants and noncitizens can save money on car insurance

Navigating the insurance system in a new country can be challenging. Immigrants and foreign visitors can maximize car insurance savings by taking the right steps. Here’s how.

How to buy car insurance

  • Research your state’s laws. The process for obtaining car insurance varies by state. Check with your local department of motor vehicles for your state’s requirements.

  • Get a driver’s license. You’ll need a U.S. driver’s license to get car insurance. If you’re in the U.S. temporarily, you may be able to use an international driver’s license to purchase insurance.

  • Figure out how much insurance you need. Aside from your state’s minimum coverage requirements, you may want to purchase additional coverages, such as comprehensive and collision, for broader protection.

  • Request quotes from multiple insurers. Compare quotes from several insurers to find the best deals and coverage options.

  • Choose your policy. Once you find coverage that meets your needs, contact your broker or apply directly with the car insurance company. You can typically choose to pay the cost of your policy up front or break it up into monthly payments.

How to lower your car insurance costs

These are some good ways to lower your car insurance costs:

  • Ask about discounts. Ask your insurance company about discounts, such as discounts for being a safe driver, being a good student, and completing defensive driving classes.

  • Bundle policies. Many insurers offer discounts when you purchase multiple insurance policies with them, such as auto and homeowners insurance.

  • Increase your deductible. One way to save on car insurance is to increase your deductible.[4] Keep in mind, though, that while increasing your deductible can reduce your insurance costs, you may pay more out of pocket for a covered loss.

  • Review your policy. Review your insurance policy every six months or annually to ensure it aligns with your current needs. Adjust coverage limits, remove unnecessary riders, or explore other insurance companies if your situation has changed or you find a better deal.

Read More: High-Deductible Car Insurance

Read More: High-Deductible Car Insurance

Car insurance for immigrants FAQs

Moving to a new country is overwhelming; purchasing car insurance shouldn’t have to be. Below, you’ll find answers to some commonly asked questions about getting car insurance as an immigrant.

  • How much car insurance do you need?

    The amount of car insurance you need depends on your state’s requirements and your individual coverage needs. You may only need enough insurance to meet your state’s minimum requirements. If you need extra protection, consider increasing your policy limits and purchasing comprehensive and collision coverage.

  • How can you get a U.S. driver’s license?

    The process of getting a U.S. driver’s license varies based on your state of residence. Undocumented immigrants are unable to get a driver’s license in certain states. Contact the department of motor vehicles in your area or visit its website to learn about your state’s rules.

  • Can you get a license without a Social Security number?

    Yes. You can get a driver’s license in the U.S. without a Social Security number, depending on your state of residence. Some states let you apply for a license with an Individual Taxpayer Identification Number or a letter from the Social Security Administration stating that you’re ineligible for a Social Security number.

  • How much does car insurance cost for immigrants?

    Car insurance costs for immigrants depend on various factors, such as your driving record, age, and location. Generally, however, because insurers consider U.S. driving experience, immigrants pay more for car insurance, as any driver with less driving history would.

  • Do you need car insurance if you’re a short-term visitor?

    Yes. Tourists and other short-term visitors need insurance to legally operate a vehicle in all states except New Hampshire. If you rent a car during your visit, you can purchase insurance directly through the rental company. If you bring your vehicle to the U.S. from another country, you must purchase a separate U.S.-based policy.

Sources

  1. National Conference of State Legislatures. "States Offering Driver’s Licenses to Immigrants."
  2. Insurance Institute for Highway Safety, Highway Loss Data Institute. "Fatality Statistics - Males and females."
  3. National Association of Insurance Commissioners. "Credit-Based Insurance Scores."
  4. Insurance Information Institute. "Understanding your insurance deductibles."
Jess Ullrich
Jess UllrichInsurance Writer

Jess is a personal finance writer who's been creating financial and business content for over a decade. Her work is published on Investopedia, MoneyWise, NextAdvisor, The HuffPost, and more. Prior to freelancing full-time, Jess was an editor at Investopedia, The Balance, and FinanceBuzz. Connect with her on LinkedIn.

Chris Schafer
Edited byChris SchaferSenior Editor
Chris Schafer
Chris SchaferSenior Editor
  • 15+ years in content creation

  • 7+ years in business and financial services content

Chris is a seasoned writer/editor with past experience across myriad industries, including insurance, SAS, finance, Medicare, logistics, marketing/advertising, and many more.

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Amber Benka
Reviewed byAmber BenkaLicensed Insurance Agent
Amber Benka
Amber BenkaLicensed Insurance Agent

Amber Benka is a licensed insurance agent specializing in auto, home, commercial, life, and health insurance. She has owned the R.A.L Insurance Agency for four years.

Konstantin Halachev
Data reviewed byKonstantin HalachevVP of Engineering & Data Science
Headshot of Konstantin Halachev, VP of Engineering at Insurify
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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