Working Overseas? Be Sure to "Preserve" Your Auto Insurance Status!

After I returned back home from overseas, I found a car and inquired into insurance rates for it. I was in for an unexpected and unpleasant "surprise". Some years ago I accepted an offer of work overseas and moved to Hong Kong - and later to Shanghai, China - for several years.

• To read about my various adventures in China, click here.
• To see a copy of the employment contract I worked under while there, click here.

Folks have loads of advice for working overseas. While I won't cover the gamut here, I do share some advice I learned the hard way after returning home to the USA. I wish to share it with you before you make the hop "over the pond" to your favorite destination.

Personal Transportation

After returning to the US, I shacked up with family just to have a roof over my head, so I could get re-acclimated to living in America, to get a couple weeks' rest, and then later to look for work.

It almost goes without saying that in many cities in America - you cannot get by without some kind of wheels. While in some smaller cities or towns you can get by with walking, riding a bicycle or taking public transport, it's a real surprise (even a disappointment) that some US cities either have no public transport to speak of or they are really lacking in what coverage they offer in the city.

For some, owning a car is no big deal. For me, it was. After having lived for several years in Shanghai, a bustling metropolis of over 20 million people, I became spoiled by readily accessible and relatively inexpensive public transport. By taking the taxi, bus, subway, or even riding my bicycle to my various appointments, I had rendered the petrol-powered absolutely unnecessary.

Quite frankly, I loved it. By not having to concern myself with the extra expense of insurance for a car or truck (more on this here), maintenance, finding and paying for parking, theft, vandalism, and other hassles, I was otherwise free to live life and do business in a foreign land.

"Unpleasant Surprise" On My Driver Experience

However, after I returned home to "The States" from China, I was faced with the prospect of not being able to get around without a car or truck. "So be it" said I to myself, and thus set about finding a car. After I found a car and inquired into insurance rates for it, I was in for an unexpected and unpleasant "surprise".

I secured several quotations from five insurance agencies - just to be sure - and selected the one I most likely would go with.

I was appalled at the rates they were all giving me.

"Newly Insured Driver" - According to The Insurance Company

Remembering how much lower my rates were before I left to work overseas, I asked my agent why they were now so high.

He says, "Well, you are considered a newly insured driver - basically a new driver!"

What? I was dumbfounded!

After explaining I actually had almost two decades of driving experience to my credit - most of it without incident - so how could I possibly be a new driver? My agent's answer was both enlightening and angering.

He patiently explained, "The system isn't exactly set up for exceptional people such as you. Because you went overseas, you let your car insurance policy lapse and thus were considered uninsured. Upon your return to the US, whether or not you were operating a vehicle over there, in asking us to write a new policy based upon several years wherein you had no insurance - you were effectively an uninsured driver!

"Because 'the system' does not recognize passport stamps nor does it take into account that people can be out of the country for extended periods, it defaults to the worst-case scenario: you are not able to produce proof of insurance, and thus were (by default) uninsured. You are now considered a newly insured driver, and the rate reflects this."

How To Avoid This?

After some heated discussion, I did get around to asking what could have been done to avoid this. After so many words, I was able to determine that (at least in my state of residence) if I had filed a "Certificate of Non-Operation" for the vehicle against which I was insured, it would have "frozen" my status and thus allowed me to remain uninsured on the condition that I was not to operate a vehicle while living overseas.

Keep in mind - this is perhaps a workaround at best, a workaround based on a system designed to work best for the insurers and not the insured. One thing this doesn't take into account are situations like: what if you don't own a car by the time you go overseas. How would you be able to file a certificate of non-operation with no vehicle in your name?

I wish I had known this beforehand. Well, live and learn. At least you know to check into this before checking out overseas. The requirements in your municipality may differ from what I was subject to.

Good luck, and have fun overseas!

Sources:

"Overseas Employment Contract" by John Melendez, Associated Content Contributor

China Stories by John Melendez, Associated Content Contributor

Insurance Articles by John Melendez, Associated Content Contributor