U.S. Mexico Canada Insurance Overlap

Whether you’re driving to Mexico from the U.S. or Canada, paying insurance overlap can be frustrating and expensive.  One of the most common questions we receive here is related to long-term insurance and maintaining insurance in both countries.  If your vehicle will no longer be in the United States, why should you have to pay insurance there?  The answer depends on where you are coming from, and in many cases which state, specifically.  For all you expatriates who spend more than 6 months at a time in Mexico with your foreign vehicle, this article is for you.  

U.S., Mexico and Canada Insurance Overlap Solutions

If you have to have Mexico insurance as you cross the border, and let’s say you purchased a one-year policy.  The insurance here in Mexico does not require that you maintain your domestic insurance, but it does require that you maintain the legal operating condition of your vehicle.  This includes up-to-date registration in your domestic state of residence.  Some states require that you have insurance in order to maintain registration, so what do you do?

Canadians Have it Good

In Canada, it’s simple. All you have to do is present to your Canadian broker the Mexican Insurance policy. He/she will refund your Canadian Auto Insurance for that term! That’s it. No duplicate insurance for Canadians.

In the United States, it’s More Complicated

Solution 1: Find a State that Does Not Require Insurance and is Friendly to Non-Residents, ie: South Dakota

There are only two states that do not require insurance, Virginia and New Hampshire. Unfortunately, both states require local residency to register your car. In South Dakota, a small county in the southern part of the State called Clay County will let you register as a non-resident without smog or insurance requirements. Apparently, the State has taken down most of the information related to this process. You can call the Clay County DMV (Treasurer) here:

• 605-677-7123
• treasurer@claycountysd.org

Solution 2: Register Your Car in your Home State with Affidavit of Non-Operation

Most states will allow you to file an “Affidavit of Non-Operation.” If you read the fine print, it does NOT mean that you won’t drive your car. It simply states you will not operate on your state’s roads. As the California affidavit reads:

The above described vehicle is not being operated or parked on any California roadway so as to require evidence of financial responsibility. I understand that if the vehicle is operated or parked on a California roadway prior to complying with all applicable registration and financial responsibility (liability insurance) laws, I will be subject to citation.

–California DMV Affidavit for Non-Use

This allows you to keep your registration current, and avoid paying duplicate insurance in the U.S. Please pay attention to the timing of these forms. Some states require 60-75 days to process. With that said, give yourself plenty of time. If the registration expires, you’re going to have to go in person to renew.

• New Mexico Affidavit of Out-of-State Vehicle

Texas

• Affidavit and Waiver for Non-Operation

U.S. Mexico Canada Insurance Overlap Conclusion

If you do your due diligence and make some adjustments you can save a lot of money annually on auto insurance.  Let’s face it, there’s no reason to have your vehicle insured based on requirements of a state when that vehicle won’t even be in that country.