Do the US Insurers Accept Foreign Driving & Insurance History?

When individuals move to the United States, their extensive history of accident-free driving, clean traffic records, and claim-free status in their home countries may not hold any weight. This is because car insurance companies in the U.S. typically only accept records that can be verified through the Department of Motor Vehicles (DMV), local sources, and credit agencies. However, there is some positive news for foreign drivers, as a select few mainstream insurers may provide coverage. It is crucial to understand that these drivers should anticipate paying considerably higher premiums as they are deemed high-risk, primarily due to their lack of driving history in the U.S.

Auto insurance companies employ complex rating structures that consider various factors, such as driving records and insurance history. However, due to the absence of international standardization for driving records, it is currently impractical to incorporate diverse driving and insurance history data from numerous countries into the already intricate premium calculation methods. Additionally, challenges persist in terms of easily verifying such information.

Foreign drivers who relocate to the United States may be permitted to drive for a duration of up to 3 months using their foreign driver’s licenses, and up to 1 year with an International Driver’s Permit (IDP), depending on the state they reside in. While some insurance companies may decline coverage for such drivers, reputable carriers like State Farm, Progressive, and GEICO are known to insure foreign drivers as long as their driver’s licenses are valid in the state of residence.

Lacking a verifiable clean driving history, insurance records, or credit scores leads insurers to make assumptions based on the worst-case scenario. As a result, newcomers to the country will need to begin anew and establish their history from the ground up. And driving with a foreign or international driver’s license is typically considered non-standard, placing foreign drivers in a higher-risk category and resulting in further premium increases.

In the United States, car insurance policies are typically sold for 6-month terms, which differs from many other countries where policies span a full year. Therefore, it may be advantageous for foreign drivers to secure a standard vehicle insurance coverage, even if they are uncertain about the duration of their stay in the country or if it will be for a short period of time. Short-term policies tend to be more expensive and less commonly available.

Additionally, most reputable vehicle insurance companies in the U.S. either do not charge or have minimal cancellation fees for terminating policies before the renewal date. They also promptly refund any unused premiums. This flexibility allows drivers to adjust their coverage as needed without incurring significant financial penalties.

The duration of a person’s stay in the United States may determine whether they should consider applying for a driver’s license in their respective state. Even with a limited history and a U.S. driver’s license, individuals are likely to experience notable improvements in their insurance premiums.

Qualifying for insurance discounts is a gradual process, and many companies begin by offering small discounts even for a 6-month insurance history and renewing policies with the same company. As a result, newcomers to the country may initially face higher car insurance rates. However, this situation is unlikely to persist for long if they maintain a clean record by avoiding accidents, traffic violations, and coverage lapses.

Returning American drivers, particularly those who had previous insurance history with certain car insurers and have not spent an extended period abroad, may have a different experience. Some insurance companies are willing to consider customers returning from overseas duties and jobs as if there was no interruption in their coverage. This enables them to qualify for discounts based on their past insurance history before leaving the U.S.

However, it’s important to note that such provisions are typically not universally applicable. Insurance companies may only extend these benefits to specific groups of individuals, such as returning military personnel, workers, business people, or individuals who have taken a lengthy trip. Additionally, there may be limitations on the duration of coverage gap that the insurer is willing to overlook.