Like the vast majority of Canadian snowbirds, Douglas Gray takes the car with him when he sets off on his travels south of the border.
The insatiable traveller and retired lawyer has visited more than 50 countries with his wife and penned 25 books, mostly on the road – so he's made knowing the rules of car ownership abroad his priority.
"Not knowing all the rules ahead of time can result in harsh penalties later," says Gray, author of The Canadian Snowbird Guide: Everything You Need to Know about Living Part-time in the USA & Mexico.
"For starters, before you leave, ensure your third-party liability coverage is the max you can get. Many people take the minimum as they don't think anything will come to pass. But if you're a Canadian in the U.S., you want to make sure you have the maximum amount possible."
Gray urges snowbirds to carry at least $1-million in third-party liability coverage, but ideally closer to $5-million. This ensures peace of mind if you cause an accident to a third party who then makes a claim against you.
The premium difference between $1-million and $3-million is relatively small, but in the United States, the award against you should someone be injured or die could be in the millions of dollars, he says.
If there's a shortfall, someone sues you personally and your car insurance doesn't cover it, your homeowner insurance might be able to pick up the difference, as a result of the accident – with a personal liability extension on your homeowner policy. This should be clarified with your insurance provider ahead of time.
Gray also strongly recommends getting "underinsured motorist coverage" (UMC), which covers you if you're in a collision that's the fault of the other driver. "The premium is low – perhaps $20 to $100 a year – but protects you in case you're hit by a driver of a car with inadequate or nonexistent insurance coverage. If you don't have UMC, you'd have no protection even if you sued the other driver as they likely wouldn't have the assets.
"I recall when I was last in Arizona there was an newspaper article on the high percentage of drivers with either no liability insurance or the basic minimum nominal amount, because they could not afford to pay for it. If they had an accident and they were at fault, it would be difficult for someone to collect, and the injured person would be out of luck in terms of medical bills or car repair bills, unless they had UMC."
Other tips Gray mentions in The Canadian Snowbird Guide include:
1. Reduce your insurance premiums by increasing the deductible portion of the policy – this amount ranges from $100 to $2,500. The lower the deductible, the higher the premium.
2. If any personal possessions are stolen from your car, you'd have to file the claim under your homeowner insurance policy, which normally has a deductible of $100 to $500 or more.
3. Canadian auto insurance will not cover you in Mexico. You need to obtain a separate insurance policy for the duration of the trip, which you can obtain from a local American Automobile Association outlet close to the Mexican border.
4. If you have a home-based or small business in Canada, make sure you have additional insurance coverage for business use of your personal car. Otherwise, if there is an accident and the car is being used for business-related purposes, the insurance company will reject the claim.