Going on a Road Trip? Car Insurance Tips for Every Destination

Going on a Road Trip? Car Insurance Tips for Every Destination

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America is a country full of potential road trips. Every year, thousands of drivers get in their cars to explore the United States, but lost in the excitement may be the issue of car insurance.

Any time you set out on the road, there's a chance that you could get into an accident. It's crucial that your car insurance is all set and ready to go before embarking on your trip. Here are a few things you should know:

If you’re taking your own car

There are two things you should know about car insurance when road tripping with your own car: who’s covered and what happens if you get into a crash in another state. To address the first topic, your policy allows other people to drive your car — unless they are unlicensed, drunk or specifically excluded from your policy.

Car insurance follows the car, so if your friend is behind the wheel and he crashes, your policy is the primary source of coverage for everyone involved in the accident — including the other driver. If you hit your policy’s limits, then your friend's policy will be used next.

When it comes to interstate travel, different states have varying car insurance minimums. So if you start your trip in Florida, which only requires $10,000 of property damage liability and no personal injury coverage at all, then get into an accident in New York, where minimums are about $50,000 greater, you would be very underinsured to cover a New York driver's damages.

Luckily, car insurance companies recognize that you shouldn't be penalized for having the legal limit of insurance in one state and crashing in another with higher limits. As long as you are not intoxicated or behaving in a way that would invalidate your policy, your company will bump your limits up to the state in which you crashed. This also applies if you crash north of the border in Canada. It does not apply in Mexico, however; see below for more.

If you’re renting a car

If you rent a car, you need some sort of rental car insurance. When you rent a car, be it from Enterprise, Hertz, Avis or another rental company, you have a few options for insurance coverage.

The first is the one the company offers. Rental companies offer a Loss Damage Waiver (LDW), Supplemental Liability Coverage (SLC), Personal Accident Insurance (PAI) and Personal Effects Coverage (PEC). Of those four, you may only really need the first two. You pay for the LDW, about $9 to $20 per day, depending on the rental company, which essentially says the rental company will cover any damage that happens to the car.

If you have collision insurance on your policy, however, you may opt out of the coverage. If you have a credit card as well, you may charge the entire rental to the card, and your card provider may cover the LDW at no charge to you. Paying for the LDW or using a credit card may be a good way to go because if you do get into an accident, you won't have to file a claim with your insurance company, thus risking your rates going up.

The SLC is mandatory if you do not have car insurance. Liability insurance is the minimum amount of insurance you need to legally drive. On the other hand, if you have car insurance, you do not need to pay for SLC. However, if you have low limits, like the state minimum, going with SLC may be a smart move. SLC may cover you up to a million dollars. You don’t really need PAI if you have PIP or health insurance, and PEC is ultimately not worth the price in most cases.

If you’re driving to Mexico

If you drive to Mexico, your American car insurance will no longer be valid and you will have to buy Mexican car insurance. Driving without car insurance in Mexico is illegal and could land you in jail.

Buying Mexican car insurance is quite simple. Both Geico and Progressive allow drivers to purchase policies online through one of their partners. Plans come in daily, six-month and year-long terms. We found that a six-month policy is usually the best deal, costing around $300 to $400. Remember to account for that expense when calculating the cost of your Mexican road trip.

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