The following advice should not be taken as the definitive answer on auto insurance
worldwide. It is merely a non-expert’s view on what to look for when exchanging vehicles, and on how to approach the business of confirming that yours has adequate insurance coverage for your holiday home exchange.

If you would like to exchange cars, now is the time to check if your policy will allow you to add a guest driver, and that there are no ‘small print’ clauses which would exclude someone because they do not have a Canadian or International driver's licence or for some other reason such as nationality. To be sure, ask your insurance agency. Agencies may differ in their guest driver stipulations, some requiring proof of valid driver's licence and accident-free record. But remember, if your policy allows you to add a guest driver, and it does not exclude "foreigners", then they are by definition included - assuming of course that they have a full license and an acceptable driving record.

Do utilize the Automobile Exchange Agreement provided in HomeLink directories and posted on our website. Clarify with your exchange partner who pays the insurance excess charges in the event of a claim. The excess charge usually means the deductible part of an insurance claim, typically $200 to $500. Most exchangers agree to pay this excess if they involve their exchange partner’s car in a blame-worthy accident.

Be prepared for discrepancies between insurance laws, policies and practices in different countries. For example, you might find that a British member is able to add a specific rider clause which provides short-term coverage for a designated guest driver. As Canadian, your only recourse may be to upgrade your coverage by reducing your deductible and raising your third-party liability coverage for the duration of the exchange.

When approaching your auto insurance company to confirm coverage for your exchange partner, it is not necessary to say that you want to swap cars with a foreigner. The fact that you will drive the other partner’s car is irrelevant in this situation. Be very clear in explaining that you will not be charging rental, and that you’re not involved in some sort of commercial arrangement. We suggest you simply ask for confirmation that your policy covers a designated guest driver, or that it can be amended accordingly. You should, of course, be able to confirm that the particular driver is not excluded on the grounds of nationality, race or creed by some clause or other catch-all in your policy’s ‘small print’.

If doing a car exchange is important to you, and your auto insurance policy will not cover you adequately, changing your policy may be the best option. If you have difficulty obtaining an annual policy which will cover your exchange partner, try contacting other HomeLink members in your vicinity for the names of suitable companies they have used in the past. By the way, we do not know of any company which will issue auto insurance for just the period of an exchange; the only options seem to be to make sure your annual policy gives you the coverage you need, or to change your policy for a better one. If you are having a problem getting what you want from your insurance agency, consider cancelling the policy and going to an agency that understands your needs. You should be able to get a full refund of the unused portion of the policy.

Having read this page, you may wonder if it’s worthwhile trying to agree to a car exchange! It is in fact very worthwhile, and it is almost always satisfactory and successful. The vast majority of auto exchanges are undertaken without any problems whatsoever, and this advice therefore addresses only the one or two cases where a member may be having some difficulty.

Vehicle Exchange Agreement form

Posted by Jack Graber on Monday, October 6, 2010

UNSOLICITED - FROM A NEW BRUNSWICK MEMBER

Greetings, Jack:

Cathy and I are Canadian members who to this point have had two successful exchanges. Our adventure this summer took us to Bristol, England, where we spent an amazing 3 weeks in Southwest England and London. Wonderful trip made more feasible by exchanging.

I wanted to mention something to you that I thought might be of use to other Canadian Homelink members who swap cars. For our first exchange, within-Canada, we of course had no difficulty "adding a driver" to our current policy. However, this year, our auto insurer balked at adding an "international" driver despite the fact that the UK-exchanging driver had lived for more than a year in Canada, and, of course, had driven here previously. I should also mention that I have no adverse claims history with this insurer (M.... M....), and have been with them for nearly 10 years.

I was quite perturbed with their response, and suggested I might be shifting the policy to a different underwriter due to this issue.

Exploring other options, I discovered that 1) yes, I was getting a good rate from my current insurer (M.... M....), and 2) of course, other insurers were interested in my business, but would charge more for the current coverage. I decided also to approach my home/cottage/personal effects insurer.

My property insurers indicated that they would gladly add on auto coverage (including the international driver), but, they said, why not buy a "Drivers Policy"? (I hadn't heard of this product before). Long story short, they suggested that, because I was getting such a good rate at my present auto insurer, why not remain there with my ongoing auto coverage, buy a 12-month Drivers' Policy from them, then cancel it when I returned after my exchange. (They would refund any overpaid coverage, less the usual floor amount retained on the cancellation on any policy).

I purchased it locally from 'The Co-operators', who, presumably, sell it throughout their sales market.
My net out-of-pocket for a month's coverage under a Drivers' Policy was less than any comparable coverage (approx. $200), and far less than renting our exchange partners a car in peak season, which would have been in excess of $1,000.

I wasn't sure if your group was aware of this auto coverage product - but it was a workable and reasonably priced option for us.

Thought I'd mention it in case it might be beneficial to other members - in my case it was a win-win - I got economical occasional coverage, and maintained my economical permanent auto coverage as well.

Jim, New Brunswick

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Here are links to 'The Co-operators' website, with details about their coverage in all provinces and territories except BC, Manitoba and Saskatchewan :

FRANÇAIS  http://www.cooperators.ca/fr/homepage/homepageFrench.html
ENGLISH  http://www.cooperators.ca/en/homepage/homepageEnglish.html

L’assurance automobile au Canada
Bienvenue sur le site Web de Co-operators, une société d

Au Canada, chaque province comporte des particularités en matière d'assurance automobile. Pour en savoir davantage sur l'assurance automobile, veuillez visiter le site du Bureau d'assurance du Canada (BAC).

En Alberta, au Nouveau-Brunswick, à Terre-Neuve-et-Labrador, dans les Territoires du Nord-Ouest, en Nouvelle-Écosse, au Nunavut, en Ontario, à l'Île-du-Prince-Édouard et au Yukon, tous les produits d'assurance automobile sont offerts par des compagnies d'assurance privées.

Au Québec, la protection de base pour les préjudices corporels est fournie par la Société de l’assurance automobile du Québec (SAAQ), une entité détenue par le gouvernement. Les compagnies d’assurance privées offrent les garanties suivantes : Responsabilité civile, indemnités d’accidents, dommages matériels au véhicule.

Les 'CO-OPERATORS' offrent des produits d’assurance automobile par l’entremise de L’Union Canadienne, l’une de nos sociétés.

En Colombie-Britannique, en Saskatchewan et au Manitoba, les assureurs gouvernementaux offrent une protection obligatoire de base. Les assureurs privés et gouvernementaux offrent des garanties complémentaires facultatives. Cependant, Les Coopérateurs n'offrent pas d’assurance automobile facultative en Colombie-Britannique et au Manitoba