Whether it’s a summer road trip with friends, an overdue visit with a family member, or attending a business conference, you may find it advantageous to drive across the border rather than fly.
But let’s say your car isn’t roadworthy, or you lack access to a vehicle entirely. In that case, borrowing a car from a close friend or relative can be a convenient solution.
However, can you legally drive a car that you don’t own to another country in the first place? And what impact would crossing the border have on the car owner’s insurance policy? After all, neither you nor the vehicle owner wants to get stuck paying costly bills because of a denied claim.
Can you cross the border with a borrowed car?
As long as you’re listed as a secondary or occasional driver on the policyholder’s car, you’re free to drive it across the border, according to the Insurance Bureau of Canada (IBC). But you must have the vehicle owner’s permission to do so.
“If you wish to borrow a vehicle, you must obtain explicit permission from its owner. When crossing an international border with a borrowed vehicle, ensure you have written permission from the owner and their direct contact information in the event it’s required,” an IBC spokesperson said in an email statement.
The only other requirement is that you possess a valid driver’s license from your province.
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How does driving a borrowed car across the border affect the owner’s car insurance policy?
For the most part, the car owner’s insurance policy remains intact if you drive it outside Canada.
According to the IBC, “Most auto insurance policies provide coverage within North America, provided you are in the visiting location temporarily. When it comes to auto insurance requirements, it does vary across Canada and the US and is based on the duration of your stay.”
Insurance companies will typically allow you to drive the vehicle in the US for up to six months. But the timeframe can vary based on the policyholder’s insurance provider, so it’s prudent to verify how long you’re covered for once you cross the border.
Before departing on your trip, you should discuss with the policyholder any restrictions in their insurance policy that, if breached, will result in denial of coverage.
What happens if you get into an accident in another country while driving a borrowed car?
Car insurance generally follows the vehicle, not the driver. As a result, when you borrow a car, you also borrow the owner’s insurance policy. This rule applies whether you drive a car within or outside of Canada.
Suppose you drive across the border in a friend’s vehicle and get into a collision. Assuming the other driver was responsible for the accident, your friend’s insurance provider would cover the damage to their vehicle. Even if you have car insurance yourself, your friend’s policy will kick in first to settle the claim.
But let’s say you were deemed to be at fault, instead. In addition to covering the damage, your friend’s insurance provider will document the incident on their insurance record. As a result, your friend could see a hike in their premium.
Naturally, you’ll want to do everything possible to avoid this type of scenario. An at-fault claim can tarnish the policyholder’s insurance history and potentially jeopardize your relationship with them.
Another factor to consider regarding at-fault collisions is the level of liability coverage on the car owner’s insurance policy. Although the owner’s insurance policy extends to you while you use their vehicle, the coverage amount may prove insufficient following an insurance settlement.
For example, insurance payouts in the US are typically larger than those in Canada. So, if the policyholder’s liability coverage is $500,000, while the liability settlement amounts to $800,000, the policyholder could be personally liable for the remaining $300,000.
What to consider before driving a borrowed car into another country
At first glance, borrowing someone’s car to go to another country may seem trivial. But when it comes to the insurance implications, things can get complicated, so you should become familiar with the rules and regulations before hitting the road.
Be sure to discuss your rights and responsibilities as a guest driver with the person who’ll be lending you their vehicle. Inquire about the amount and type of coverage their insurance policy offers, as well as any restrictions and exclusions that apply. And take note of any gaps in coverage that can leave your friend financially vulnerable to hefty medical and legal bills.
Depending on your needs and preferences, you may wish to acquire non-owner car insurance coverage to enhance your existing policy. That way, you’ll be able to enjoy your trip down south rather than fret over a road mishap that could put a severe dent in your bank account.
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