When you live in a country like Canada, with thousands upon thousands of kilometres of the open road, it makes perfect sense that a road trip is a classic, much-loved experience. Whether you're staying in Ontario or heading out to another Canadian province to find out what other parts of Canada have to offer, there's nothing quite like throwing your bags in the trunk and heading out for an adventure with your trusty car, truck or motorhome to spend some quality time on the road with your family or friends.
But there's no need to limit yourself to just Canada—the United States is just across the border, and Canadians love heading south to enjoy warmer weather, excellent shopping opportunities and the exciting, unique culture of the U.S.A. Before you drive off into the sunset, though, confirming a few things is essential. First, don't forget your Ontario driver's licence, vehicle registration and proof of insurance. But also stop and consider a few critical matters—not least of all, the question of whether you'll still have full auto insurance coverage when you're travelling outside of Ontario or outside of Canada entirely.
This guide from the knowledgeable brokers at Morison Insurance explains the answers to frequently asked questions about automobile insurance while travelling. Find out what you need to know to be fully protected before you head out into the wild blue yonder.
In Canada, your standard auto insurance policy applies in all parts of Canada and the United States. However, it's important to note that it only partially applies to other countries besides Canada and the U.S.A. If you decide to keep driving all the way down to Mexico, purchasing additional coverage on a Mexican car insurance policy is necessary. That's because no matter how comprehensive your Canadian auto insurance policy is, it simply can only give you third-party liability coverage in Canada and the United States.
You'll still need to have your Canadian auto policy in place and supplement it with further coverage in Mexico to protect against financial losses if you are liable for causing third-party bodily injury or third-party property damage to your vehicle. Coverage for liability claims that don't involve your vehicle would typically be handled under your home insurance, tenant insurance or a condo insurance policy, regardless of where you are in the world.
If you are involved in a car accident in Canada or the United States, you will be covered by your Ontario auto insurance policy. In fact, Ontario and British Columbia legislation mandates that insurance companies must provide policyholders with coverage for vehicular accidents that occur anywhere in Canada or the U.S.
That being said, there are some caveats you should be aware of. Automobile insurance claims are typically settled in the jurisdiction where the incident occurred, and various provinces and states have their own laws and regulations that may affect how you access insurance compensation. An example of this is that some provinces, including Ontario, operate under a no-fault insurance system for car insurance. That means if there is a collision, you'll receive compensation from your insurance company regardless of whether you're at fault for the accident or not. Other places, such as Saskatchewan, have a tort system that allows the driver who is not at fault to sue the at-fault driver for further damages. Suppose you are at fault for a collision with a tort system in a province or state. In that case, the other driver has the right to sue you for more damages, and your auto insurance would apply to the costs of that litigation up to the coverage limits on your policy.
This is an excellent question because the length of time you're away from your home province can affect your coverage. Suppose you're going on a regular trip for a few weeks or an extended period of time. In that case, there's nothing to worry about—your auto coverage will still apply for the entire time as long as you remain within Canada and the United States.
It'll still apply for the entire time as long as you remain within Canada and the United States.
If you're embarking on a significantly more extended trip, however—usually for six months or longer—you will exceed the allowable period for your policy and be considered invalid. To avoid that, you must return to Ontario before the acceptable period expires and stay there for a certain length before leaving again. The allowable time will vary based on your insurance provider and unique policy. If you plan to be outside of Ontario for longer than that period and can't (or don't want to) return before it expires, speak to your broker at Morison Insurance about extending your coverage for a longer time before you leave.
Each insurance company is different, so remember to check your expert Morison Insurance broker to ensure you are covered.
It's optional to pay anything extra to extend your coverage while you're travelling province to province or the U.S.A. because the coverage you already have in Ontario is automatically in effect throughout those two countries. That being said, if you travel to the United States for an extended period each year because you have a snowbird home in one of the warmer states, your premiums may increase to cover the additional risk exposure.
For third-party liability insurance coverage on your automobile insurance, our brokers recommend a minimum of $2 million whether you're travelling or not—but it can be particularly critical when you're driving in the United States because insurance compensation is typically higher in the U.S.A. than it is in Canada when you're the at-fault driver in a collision. Suppose a judgment is issued against you that exceeds the coverage limit on your vehicle insurance policy. In that case, you will be responsible for paying the overage out of pocket, which could easily exceed $100,000. With a $2 million coverage limit, you can be reasonably sure that won't happen, and your limit will be sufficient to cover the associated costs of the collision and subsequent settlement.
That was the case back before driving records and traffic infractions were digitally recorded because sending tickets to other countries was a hassle and not worth the effort in the long run. That has now changed because sharing information across the border is much simpler and can be sent electronically without much human input. Due to reciprocal agreements between provinces and states, it is now much more likely that a traffic infraction you are ticketed for in the U.S.A. will follow you home to Canada and impact your driving record here.
You already know your existing vehicle insurance policy will apply when you're travelling in the U.S.A. or Canada—but is there additional, complementary insurance coverage that you should know about when preparing to travel? The answer is yes. Here are some important endorsements that are well worth considering before you take off on your driving trip.
If you're driving around your home city and you are involved in a collision that damages your vehicle to the point where it can't be driven, that's a significant inconvenience. But if it happens while you're in another province or country, it's downright disastrous. You're left at the side of the road with a pile of your stuff—sometimes literally—with no means of transportation to get home or get anywhere else. Loss of use coverage prevents that from happening by providing you with a temporary replacement vehicle, such as a rental car or reimbursing your travel costs so you're not forced to pay out of pocket to get home or wherever it is that you need to go.
This additional coverage is added to your existing vehicle insurance policy, which protects you and your family should you be in a collision where the at-fault driver doesn't have adequate coverage or is entirely uninsured.
This is particularly important when driving in the United States because mandatory liability limits are generally much lower there than in Canada—and car insurance is not compulsory at all in New Hampshire. That means the at-fault driver may not have sufficient coverage to provide you with the insurance compensation you're entitled to. In that case, your family protection coverage would make up the difference, up to the limits of your policy.
Maybe you don't want to spend the time to drive to the place where you'll be vacationing—or your vacation is somewhere like Hawaii that would be pretty difficult to drive to—but you'll still need a car while you're there. The obvious solution is to hire a rental vehicle, but does your existing car insurance also apply to your rental car? It does if you are liable for damage to a non-owned automobile endorsement, also known as OPCF 27 in Ontario. It essentially provides physical damage coverage for any personal vehicle you are driving but do not own, such as a rental car. It also gives you access to liability, accident benefits and more under certain circumstances.
If you are planning to take your vehicle with you on a trip and have questions about types of coverage, or you want to know more about the topic in general, call us at 1-800-463-8074 to speak with an experienced insurance broker at Morison Insurance. When you call us, we'll start by consulting with you to get as much information about your lifestyle and unique risk exposures. Once we know more about your potential travel plans and your specific auto insurance policy, we can find the right coverage to give you peace of mind while driving your car in Canada or the United States. At Morison Insurance, our dedicated insurance brokers work for you, not the insurance companies. As a result, we are focused on finding the best insurance packages to protect you against financial loss—no more and no less.
This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.