When You Need Car Travel Insurance, and When You Don’t

The popularity of road trips in America persists. A 2022 Vacationer survey revealed that nearly 80% of Americans planned to take a road trip this past summer.^[1]

Your car insurance policy generally provides coverage in all 50 states and Canada, even if you live in a state with higher or lower insurance minimums. If you travel to Mexico or another country, you may need to purchase country-specific insurance or add coverage to your existing policy.

Car insurance when traveling across the U.S.

Most standard auto insurance policies apply in other states, protecting you even though minimum auto insurance coverage requirements vary between states. If you get into an accident in a state with higher minimum insurance requirements than where you live, your policy limits will adjust to meet that state’s requirements. Your limits don’t decrease if you visit a state with lower minimum requirements.

For example, imagine you live in Florida but have an accident while driving through Georgia. Florida only requires $10,000 in property damage coverage and $10,000 in personal injury protection. Your insurance policy limits would adjust to meet Georgia’s requirements of $25,000 per person and $50,000 per accident in bodily injury coverage and $25,000 in property damage liability coverage.

What is the minimum coverage in each state?

Each state sets its own minimum auto insurance coverage requirements. Here’s a look at the current minimum coverage requirements for each state.

Renting a vehicle for your road trip

Renting a vehicle for road trips versus driving your personal vehicle comes with several advantages. Driving a rental vehicle helps you avoid putting extra miles and wear and tear on your personal vehicle, which may hurt its resale value. If you drive an older car, your rental car will likely be newer with better gas mileage. If you lease a vehicle, taking it on road trips could cause you to exceed mileage limits and face costly penalties.

When you rent a vehicle, the rental company will offer you what’s known as rental car insurance, which can include:

• Liability coverage

• Loss/collision damage waiver

• Personal accident insurance

• Personal effects coverage

If you rent a car, you have the option to decline rental car coverage as long as your personal auto insurance policy covers rental car use. If you don’t have auto insurance, you must purchase liability insurance through the rental car company.

Car travel insurance and rental excess

A rental excess describes the maximum amount you’ll have to pay out of pocket in case of damage to the rental vehicle. Rental companies typically hold the excess charge on your credit card until you return the vehicle. The company waives the excess charge if the car is returned without damage. If you return the rental vehicle with damage, the rental company will charge you a fee based on the damage incurred up to the excess maximum.

Does your insurance cover rental car damages?

In most cases, your personal auto insurance policy extends the same coverage limits and deductibles to rental vehicles.^[2] The coverage you can purchase through a rental car company often overlaps with personal coverage. If you don’t have car insurance, you must purchase coverage through the rental company to rent a vehicle.

Read More: Best Credit Cards for Rental Car Insurance

Best rental car insurance companies

You can buy rental car insurance from the same company where you rent the vehicle, or you can purchase it separately from a reputable rental car insurance company.

Insurance costs fluctuate based on where you live, your travel location, travel time, and other factors. Dozens of rental car insurance providers exist with different coverage, estimated costs, and customer service, so it’s important to shop around and consider what company works best for you and your insurance needs.

The table below provides a comparison of four different rental car insurance companies, using a 30-year-old Michigan resident traveling between March 4 and 18 to calculate average costs.

See Also: Rideshare Rental Insurance

What car insurance do you need when traveling abroad?

Each country requires different car insurance minimums. For example, drivers in France and Germany must have third-party liability coverage, which covers damages you or your car causes other people, cars, or property — including medical bills. If you rent a car in Italy, you must purchase the rental company’s collision damage waiver.

If you plan to drive while vacationing or staying in another country, the easiest way to get car insurance is to purchase international car rental insurance coverage through a car rental company. You can learn more about a country’s car insurance requirements by contacting the country’s U.S. embassy.

Learn More: Car Insurance for International Drivers

Do you need insurance if you’re renting a vehicle abroad?

U.S. citizens must meet driver licensing laws and minimum insurance requirements to rent a car and drive in foreign countries. Most U.S. insurance providers won’t cover you while driving abroad, regardless of the vehicle. If you rent a car abroad, you must purchase insurance from a rental car company. Some credit cards may offer coverage for international car rentals, but this often qualifies as secondary coverage. Because laws vary by country, you should research foreign car insurance requirements before traveling abroad.

What affects car travel insurance costs?

Several factors can affect the cost of insuring a rental vehicle, including:

• The rental company: Insurance pricing varies depending on which rental agency you choose.

• Location: State minimum coverages vary, so the cost may differ depending on where you rent a car.

• Vehicle type: Insurance costs vary depending on the vehicle you rent. A large truck or SUV may cost more to insure than a compact car.

• Mileage: The length of your rental period and the number of miles you drive can also affect how much it costs to insure the rental vehicle.

• Coverage type: The type of coverage you choose and whether you purchase add-on coverages affect insurance pricing.

What insurance covers your vehicle while traveling to Mexico?

While your auto insurance coverage provides sufficient protection when traveling in the U.S., “traveling abroad is a different story,” says Ben Guttman, an insurance broker at North Central Insurance Agency.

“If you are traveling to Canada or Mexico, there may be additional coverages you can easily add to your policy,” says Guttman.”If Canada is your destination, you’re probably in the clear, but since their insurance laws are different, [insurers] will provide upon request a Non-Resident Inter-Province insurance card.”

However, special insurance is required by law to drive in Mexico. Mexico insurance provides liability and asset protection while visiting Mexico. “If your plans will take you south of the border to Mexico,” Guttman says, “you may need to endorse your policy or purchase separate coverage.”

Car travel insurance FAQs

Here are answers to some commonly asked questions about car travel insurance.