Car insurance in America - $1800 for 3 months?? Help!

Factual Questions
1

I am going to be in the US for three months next year with my partner, travelling from San Fransisco towards the East Coast, probably finishing up in Boston and trying to see as much of the parts in between as possible.

I’m going to buy a car in SF, and sell it when its time to go home. So far, so good. I have had a look into insurance, and got the shock of my life. It appears that that just to get 3rd party insurance, you need something called a CDW waiver, and another form of waiver, each of which costs 10 dollars per day! That’s $1800, just in extras for three months!

I understand that almost everybody in the US has a car, they can’t be paying over $6000 a year insurance, I can get fully comprehensive insurance in the UK for a year for £400, which is roughly $600. Insurance can’t be ten times more expensive in the US, surely?

Am I missing something here? I have heard that in some states the penalty for being uninsured are so laughable that some people don’t bother (all the more reason for me to make sure I have decent cover), but what do most people do?

Because I’m going to be travelling I can’t provide a fixed address, which I realise might be tricky. Me and my partner are British, with 11 years experience each of driving, and we haven’t claimed on insurance in a decade.

Any help, or tips, I’d be really grateful.

J.

2

Are you sure your current auto insurance won’t cover you in the US? Also, sometimes credit cards will have insurance coverage on them. Check that out too.

3

Insurance from rental agencies is EXTREMELY expensive, as you’ve found. And that price is not unusual. However, you can decline it. Most normal auto insurance policies (in the US) cover you while driving a rental, so the rental place’s insurance is redundant anyway.

So check your own policy to see if you’re already covered. But pay particular attention to what it says about driving outside your own country. There might be something unusual for such cases.

f your current coverage doesn’t work, I would simply call a few insurance agents, describe the situation and shop around for policies.

Remember, the car rental places cannot force to to take their insurance. You can decline even if you have no other insurance at all, though I suggest this is a bad idea.

4

Insurance does not work outside of your home country usually. While I can’t speak for Europe, here in the US your insurance is only good for the US and Canada. You have to get insurance for Mexico if you want to go.

What is a CDW? I just looked at my insurance card and it does not list CDW. You might want to try someone else, I can’t imagine paying 1800 for three months. At one time I owned 6 vehicles and payed just over $2000 a year for all of them. It maybe that you told them that you intend to travel. I’d say just find some carrier and tell them you will need insurance for three months. Don’t tell them you will be traveling that much. You may also want to find someone you know and use them as an address.

5

This is confusing. You say you are going to buy a car? The CDW (collision damage waiver) is normally associated with renting a car. Car insurance in the US is regulated on a state-by-state basis so it’s hard to state what a normal cost would be, but normally you’re required to have certain minimum values for collision and medical as well as insurance for being hit by uninsured motorists. Usually you add on additional insurance because the required minimums aren’t realistically enough for a serious accident. Cost is often associated where the car is garaged – an interesting question in your case. Still, I wouldn’t expect insurance to run more than $1K/year. Usually you can arrange to pay installments for a slight fee, that might be best if you don’t feel like having to apply for a prorated rebate when you sell the car.

You will probably have to show proof of insurance before you can register the vehicle. (I have no idea how tricky registering a vehicle without being a resident is.)

My advice would be to contact AAA (American Auto Association) and describe your situation. They can probably help. It may be worth joining – it’s only about $65.00/year and they provide free towing and trip planning.

6

The OP said he was going to buy and then sell the car, so it’s not a rental car agency charging extra for damage waivers.

That said, the OP could consider getting a rental car “mini-lease.” This is highly typical for a lot of people I know that spend a lot of time doing plant startups and model changeovers in my particular business. It costs less than regular rental rates, and I think the cars are insured with a reasonably deductible.

As for why conventional auto insurance could be so expensive:[ul][li]Insurance companies don’t want to write a 3-month policy. Try 6 months, and get a refund on the difference when you cancel.[/li][li]No USA credit history. Yeah, they check this now.[/li][li]Foreign license.[/li][li]No USA driving record.[/li][li]Not currently insured – they charge extra if you’ve not been previously insured the last six months or so.[/li][/ul]

7

What insurance companies did you call? Some of the larger insurers in the US are companies like AAA (Automobile Association of America, Geico, Progressive, Allstate, State Farm… I’ve never even heard of CDW except in a rental context.

However, in general from your post I surmise that insurance is cheaper in the UK than the US – My insurance on a 12-year old car is $350/6 months and that is without any collision or comprehensive (theft) coverage, just various flavors of liability and damage to other cars.

8

If you aren’t a US citizen you should pay more, don’t you think? After all, you don’t have a clean driving record for the USA, right? But you might call around & see if you can get a better rate from other agencies.

9

On a semi-related note, you may want to “shop around” to see what state would be most advantageous for your car purchase. California is, I believe, one of the most expensive states in which to register a car (including obtaining a number plate). Perhaps you could buy the car in (for example) Reno, Nevada instead; Nevada may be a less expensive state and it’s not all that far from San Francisco in the grand scheme of things.

Come to think of it, I hope you don’t run into problems with trying to register a car in a state where you are not a resident. I have no idea how that might work.

Enjoy your trip!

10

The place where I take flight lessons has a lot of guys from the UK come over for about 3 months and they’re in your car situation. Here’s the advice from their webpage:

That insurance rate seems more reasonable.

11

Thanks for all the suggestnios, It’s really appreciated.

It would appear I am confused, and as Balthisar said, we’re intending to buy, not rent, so the CDW (collision damage waiver) won’t apply.

Handy, I don’t see why I - theoretically - should pay more than a US citizen , I’m a safe driver and haven’t had an accident in years. However I accept that I will pay more, for as you say, I have no record of driving in the states, and I won’t have previous local insurance or credit history and so will appear as a higher risk.

Areopl - your post heartens me. I hadn’t figured on plates costing me time and hassle, but the insurance rate is manageable.

I think the suggestion of a chat with the AAA is a great idea. I will get in touch.

Thanks again for your help advice, all.

J.

12

In California, there used to be a category of insurance called “assigned risk” for people who had not been insured for the last 6 months: VERY expensive. Perhaps that’s the rate you’ve been quoted.

13

Handy: "If you aren’t a US citizen you should pay more, don’t you think? After all, you don’t have a clean driving record for the USA, right? But you might call around & see if you can get a better rate from other agencies."

Now what kind of beligerent, ugly American kind of thing is that to say!? Oh…Well, you’re right of course.

See, Here in the USA insurance companies wanna see a clean driving record for the past 3 years. If you can’t demonstrate that, then you don’t get the good rates. So why blast foreigners? Well, their equivalent of the Motor Vehicle Department don’t provide driving records to the USA. Heck, some states don’t even share the information with other states. So, since there is no way to be sure that LongJohn is REALLY from the UK as opposed to some maniac driver from Arkansas (or whatever) who just doesn’t want to provide his heinous driving record, the INS COs err on the side of caution and assume he’s a maniac. For reasons related largely to witchcraft, most companies consider credit scoring when determining premium. This does not preclude folks with no credit/foreigners, but it DOES mean they won’t receive any premium reduction from having good credit.

Insurance prices vary from state to state, and even from city to city. The cost will be based on your US address. As a rule you want an address from a very rural area, especially if you don’t care about covering the car itself. Liability prices are driven, logically, by the frequency of accidents involving other people’s stuff (cars, fences, light poles, etc.) thus liability insurance tends to be a lot less expensive outside the city.

Insurance companies hate to sell 3 month policies. BUT you can buy a six month policy and pay it monthly and just stop paying when you no longer need it. Most companies simply cancel the policy when it runs out of money.

Make your insurance agent explain ALL available coverages when you buy the policy. Decide what you want.

Yes, it can be expensive to register a car in some states. Most (if not all) states will refund the unused portion of your licensing fee when you sell the car. Ask about this before/when you are registering the car.

If you have an international driver’s license you may not need to get a US license. I dunno about that.

14

Don’t you think that getting a US license is important? I mean after all, it shows you learned US driving laws. You want to be driving down the right side of the street here, not the left :slight_smile:

15

If for no other reason than to have a souven, soovin, souvvvine, uh, memento. Plus it may be handy if a cop in rural GA wants to have a look at who’s driving that car from California. I had a hard enough time with a Washington license down there. I’d hate to think of what might become of a coupla funny-talkin UK types down there.

“You boys ain’t from around here are ya!”

16

If for no other reason than to have a souven, soovin, souvvvine, uh, memento. Plus it may be handy if a cop in rural GA wants to have a look at who’s driving that car from California. I had a hard enough time with a Washington license down there. I’d hate to think of what might become of a coupla funny-talkin UK types cruising on an international license!

“You boys ain’t from around here are ya!”

17

" I can get fully comprehensive insurance in the UK for a year for £400"
Did you ask them if you can use that in the US too for a certain time?
One time I rented a car & asked my insurance agent to make my deductible $0 for 4 days when renting a car. Cost me $1.29

18

Sadly, it appears that UK insurance companies don’t want to know about insuring us in the USA. I can sort of see their point from a risk assessment point of view.

Sadly it appears that i’m going to have to bear the brunt of being an unknown quantity from both a safety and credit history standpoint. However, at least it looks like i can get insurance for less than the extortionate rates i thought.

So if between July and October next year any of you American types find yourself accidentally being cut-up by a driver in a beaten up car, probably with out-of-state plates on it, being driven on the left of the road by a very tall guy with large comedy sideburns, please don’t reach for the horn or a tyre-iron. It might well be me.
J.

19

On the other hand, if you present a UK driver’s license to a US cop, they may well figure that there’s no point ticketing you as you’ll be skipping the country shortly anyway.