Can People With No Driving Documents – Foreign, Matricula, or Mexican License Get Car Insurance?


Many insurance companies compete to be the best in order to win consumer dollars. Each company sets its target markets or the clients it wants to serve. A pricing strategy is then developed based on market experience and competitive forces.

Some insurance companies have a certain appetite to insure gas stations or liquor stores. Companies with a particular business appetite may have less stringent requirements to issue (underwriting) policies that cover that business. They may also lower premiums in order to attract more customers. This could also be true for auto insurance companies. Every company has different needs for certain customers (e.g. urban vs. suburban, single vs married).

Insurers are fiercely competitive in markets like Chicago. The Chicago area has a large population. It is also home to many undocumented immigrants, unlicensed operators, foreign and international licensed operators, as well as operators still driving on permits. Unlicensed people, even those with permits, can get lower premiums in Chicago’s auto insurance market. This is an interesting fact. A married man aged 30 years old without a US license may be able to get a lower insurance premium than someone who is married and has the correct driving documents.

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Undocumented drivers or those with foreign driving records are not always covered by insurance companies. In the early 2000s there were few international driving license companies. There are now dozens of companies in Chicago alone that will insure international drivers, even those with permits. This market has seen the entry of both preferred and standard companies.

Companies insuring these people are based on a simple principle. Insurance is a human need. A person who does not possess a US driving license does not necessarily mean they are a serious danger to the roads. Standard companies will charge 25% to 25% more for auto insurance than their counterparts with valid US driving records. Surcharge companies argue that because there is no way of checking the motor vehicle report (MVR), they could be at greater risk than other operators with a valid driving record.

Some companies offer lower premiums for foreign/unlicensed operators. International, foreign and unlicensed drivers can be more dangerous than US counterparts. This is due to the “morale-and-moral risks” associated with the insurance industry.

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Moral hazard is when the risk of purchasing a policy becomes higher due to bad faith. In this case, the insured might exaggerate (or even fabricate) their claims. Morale hazard is a psychological state of indifference that leads to negligence or recklessness. People with insurance believe it will be okay to drive fast because you have insurance to cover the damages if you are hurt. Companies may believe that international licensees are less morally and morally hazardous than US counterparts. This could be because they fear being pulled over by the police and deported or arrested if they’re undocumented. The insurance companies are not in the business of implementing the laws. They are there to make a profit, charging premiums and covering damages for clients who cause them to be hurt.