Car insurance for foreign drivers in USA

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According to Pew Research, the foreign population reached almost 45 million people in the U.S. by 2018. Many of those foreigners own or lease vehicles, are held to the same state-specific requirements for auto insurance and operate vehicles on U.S. roads daily.

It is possible to get a car insurance policy when you are in the country long-term or temporarily as a tourist, on an F1 student visa or an H-1B specialty worker visa. If you are looking for car insurance for foreigners in the USA, Bankrate can help you navigate car insurance requirements and connect you with some of the best car insurance companies in the U.S.

U.S. car insurance for short-term visitors

Short-term visitors include individuals in the country for a few days or weeks. The visit may be for business or personal reasons. It is likely that you will be renting a vehicle, which is most likely the easiest option. When you rent a car, you can purchase additional insurance on a daily basis that provides you with financial protection if the vehicle was damaged, stolen or vandalized, or you caused an accident and damage to others.

Although renting a car is the most convenient way to access a vehicle, look out for charges that can affect your car rental cost, such as rental car insurance. For example, Enterprise charges (per day):

  • $5.13 to $13 for personal accident insurance and personal effects coverage
  • $8 to $17 for supplemental liability protection
  • $11.99 to $16.99 for a collision damage waiver, although some vehicle models could cost more

As you can see, adding a collision damage waiver to your rental vehicle can end up doubling the daily rental cost you were expecting to pay. To save on rental car insurance, check with your credit card company about whether you have extended rental vehicle coverage. You may be able to skip the expensive rental car insurance many people buy at the car kiosk and opt for your credit card’s coverage instead. Make sure your credit card offers international insurance that applies to the United States.

Canadian drivers can typically use their home country’s auto insurance while in the U.S. Check with your agent before you travel to confirm. It is worth noting that, while your Canadian car insurance will cover a car you drive while in the U.S. in certain circumstances, that does not include rental cars, which will require rental car insurance.

U.S. car insurance for long-term visitors

Longer-stay visitors on a visa, such as a student or specialized worker, may have trouble getting affordable insurance coverage if they do not have a U.S. driver’s license. The insurance company will have less information to work with about the driver, potentially flagging the foreigner as higher risk.

Longer-term visitors should apply for a U.S. driver’s license. Having an American driving record may help you save on your car insurance when it is time to buy a policy.

International drivers permits

If you plan on temporarily driving in the USA with a driver’s license from your home country, be aware of the local rules about how long you may legally drive on a foreign license. You may only be able to drive on an overseas driver’s license for up to three months.

It may not be an issue if you are only visiting for a short period. But if you intend on staying stateside longer than a handful of weeks, some states advise you to get an international driver’s permit. Even if an IDP is not mandatory, having one is a good idea. The document doesn’t replace your foreign-held driver’s license — it serves as an accompanying translation of it. If you get pulled over, the officer can look up the translation of your foreign driver’s license in the IDP booklet in the language of his or her choice.

To get an international driver’s permit, contact your home country’s traffic or motor vehicles agency to apply for one before you plan to leave. It takes approximately two weeks to receive your IDP, so be sure to apply well in advance. An IDP is typically valid for one year from when you get it and includes your information displayed on the driver’s license. You will need to provide a passport-style photo that the agency can attach to the IDP.

U.S. drivers permits

A U.S. driver’s permit is not as difficult to get compared to other parts of the world. Many states provide study materials (online and printed) and tests in multiple languages. The cost of getting a driver’s license is also affordable compared to other countries. For example, preparing and getting a driver’s license in Germany could cost up to $3,700 vs. as little as $20 in the U.S.

U.S. car insurance requirements

Car insurance for foreign drivers in the U.S. also depends on where you plan on staying. Each state in the U.S. has its own rules and insurance requirements. Most states only ask for liability insurance to legally drive, which pays for the damages and losses you cause to others. A small number of states also require you to have underinsured/uninsured motorist insurance, which steps in to pay your expenses if the party at fault did not have insurance.

Another type of coverage some states will require before you can legally drive is personal injury protection. Also known as no-fault insurance, it pays for medical and burial costs, regardless of who was at fault in the accident.

Do I need to buy car insurance if I visit the U.S.?

Car insurance is legally required for all foreign visitors operating a vehicle in the U.S. (except in New Hampshire), regardless of how temporary your stay may be. If you plan on driving a rental car in the U.S., most rental companies will offer the option to purchase coverage for the entire rental period, as the protection extends to the rental vehicle itself. However, long-term insurance may require the purchase of a separate car insurance policy that can ensure adequate coverage throughout your extended stay.

Some foreign visitors choose to ship their foreign vehicles to the USA instead. This is an option that will require you to purchase a separate car insurance policy before you can legally operate your vehicle on U.S. roadways. Many of the cheapest car insurance companies can help you find the right amount of coverage for your foreign vehicle at an affordable rate, so you can begin driving as soon as it arrives here in the U.S.

Frequently asked questions

What is a REAL ID?

A REAL ID is a driver’s license that can also be used as identification when you fly. The U.S. is phasing out traditional driver’s licenses and replacing them with REAL IDs.

Do I need to buy car insurance if I visit the U.S.?

If you are only visiting America for a short period and plan on renting a car, you will not need to buy a separate car insurance policy, but you will likely be required to have insurance provided by the rental agency to provide liability coverage. Your rental vehicle comes with some coverage and you can always pay a daily fee for additional coverage.

Can I use an international driver’s permit without a license?

The IDP only serves as a translation of your foreign driver’s license. You cannot replace your foreign driver’s license with an international driver’s permit.

Written by
Cynthia Paez Bowman
Personal Finance Contributor
Cynthia Paez Bowman is a finance and business journalist who has been featured in Bankrate, Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com. She regularly travels to Africa and the Middle East to consult with women’s NGOs about small business development and works with select startups and women-owned businesses to provide growth and visibility.
Edited by
Insurance Editor