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 posted on our HomeLink 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.
EXAMPLE: One of our HomeLink Canada members in New Brunswick has informed us that his home insurer ‘The Co-operators‘, offers a ‘Drivers Policy’ for a modest premium. See their website for details about their coverage in all provinces and territories except BC, Manitoba and Saskatchewan.
In Alberta, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island and Yukon, all car insurance is provided by private insurance companies.
In British Columbia, Saskatchewan, and Manitoba, a government-owned insurer provides the basic compulsory coverage.
Québec car insurance
In Quebec, personal injuries are covered by the public auto insurance plan, Société de l’assurance automobile du Québec (SAAQ), known as the Quebec Automobile Insurance Corporation in English. Coverage against property damage is provided by private insurers, and the minimum legal coverage is $50,000.
Quebec has a no-fault system, in which drivers deal with their own insurance companies, regardless of who is at fault.
EXAMPLE : A Québec member has supplied this account of her special auto insurance plan with CAA Québec which would not accept her UK exchange partners as normal ‘Guest Drivers’. She had to register at least one of the UK couple as ‘additional resident drivers at her address’ under her current policy. The annual premium for an additional member at the same address is 50.73$ for ‘CAA Plus’. She elected to register the husband for 88.39$ for ‘CAA Premier’ so that they will be insured when they visit the USA for a few weeks. Also, “it allows an allocation for the return of the vehicle in case of crash or illness with a 500 km towing, plus three additional 160 km towing and other considerations if they have a mechanical problem with the car.”
This is generally not a problem area as most insurance companies are more than pleased to hear that your home will be occupied rather than left empty during your absence.
However, since 9-11, our members have discovered that many agencies and underwriters have adopted stricter requirements regarding notification about guests who will be occupying your home for an extended period in your absence. All members are, therefore, advised to contact your home insurance agency to confirm policy coverage.
In most cases you will find that your insurance policies (building and contents) will provide the usual coverage whether your home is occupied by friends, relations or exchange partners. However, most policies will not cover you for theft from the home unless there is evidence of forced entry. This is a standard clause which applies whenever you leave your home; it is not something specific to home exchanging.
You may be aware that many insurance companies charge an extra premium if you are leaving your home empty for 30 days or more. They will generally waive this charge if the home is to be occupied by friends (which includes your home exchange partners) or relatives who are effectively your personal guests. You should emphasize that your home-exchange is a purely NON-COMMERCIAL transaction.
EXAMPLE : One of our HomeLink Canada members in Vancouver has informed us that her previous home insurer promptly raised her premium when she informed them the day before her departure that she was ‘exchanging homes’.
She has since cancelled that policy and is now insured by ‘The Co-operators‘, who require only that her exchanges not be year-long, and that she does only “a couple of exchanges in a year” of perhaps a few weeks each time.
EXAMPLE : One of our Alberta members has acquired from his agency this home insurance policy endorsement : “It is hereby understood and agreed, that coverage afforded by this policy remains in full force and effect while the insured participates in a foreign exchange vacation program.” Coverage includes Canadian exchange partners as well as “foreigners”.