Insurance in the US: A guide for expats

Insurance is a major industry in the US, with many companies offering a wide range of products. However, only a few types of insurance are legally required. Understanding how the insurance market works is important for finding the right coverage for your needs and selecting a suitable provider.

This guide gives an overview of insurance in the US – what it is, how it works, and the types available. It is intended for general information only and should not be considered professional advice. For guidance specific to your situation, consult a qualified US insurance professional.

Overview of insurance in the US

The US has the largest insurance market in the world, accounting for about 45% of global premiums in 2024. Most insurance in the US is privately purchased, with people and businesses paying monthly or annual premiums. In addition to this, workers contribute to mandatory social insurance programs through payroll taxes.

Regulation of insurance is mainly handled by individual states, based on the 1945 McCarran-Ferguson Act, which gives states the primary authority over insurance matters. The National Association of Insurance Commissioners (NAIC) helps coordinate state regulations at the federal level, develops professional standards, and has information on state insurance departments.

There are two main categories of insurance in the US:

• Property and casualty insurance, which covers things like homes, cars, and businesses.
• Life and health insurance, which covers personal health, disability, and life protection.

According to the Insurance Information Institute, total net insurance premiums reached $1.7 trillion in 2024. Of this total, property and casualty insurance made up 53.1%, while life and health insurance accounted for 46.9%.

How does insurance work for expats in the US?

Insurance in the US generally works the same way for expats as it does for US citizens. However, some types of coverage – especially health and life insurance – may require proof of US residency or a Social Security Number (SSN).

If you move to the US and already have insurance in your home country, contact your insurer to ask whether your policy can be transferred or extended. In some cases, overseas insurance remains valid if the company has a license to operate in the US and your plan includes international coverage.

Many expats choose global insurance plans, such as international health or life insurance, offered by specialized providers. These plans are useful if you travel frequently or need coverage in multiple countries, including the US.

Do I need an insurance ID number or card as an expat in the US?

You don’t need a special ID number or card just to buy insurance in the US. When you take out a policy, the insurer will give you a policy number – this is what you’ll use when filing a claim or seeking assistance.

For types of insurance that have residency or legal status requirements (for example, health insurance through the Affordable Care Act marketplace), you may need to show:

• Proof of your US address or legal residence, and
• An SSN) or Individual Taxpayer Identification Number (ITIN)

If you’re eligible for Social Security or Medicare, you’ll also need an SSN to access those benefits.

If you’re an expat in the US, services like Wise can make managing your international finances easier. Wise lets you send money to 140+ countries using the mid-market exchange rate with no hidden fees.

With a Wise multi-currency account, you can hold and exchange money in 40+ currencies and receive international payments in 20+ currencies, which can be very helpful for managing claims or premiums from abroad.

Which insurance in the US is legally required?

Auto insurance

Auto insurance helps protect drivers of cars, trucks, and motorcycles against financial losses from accidents, theft, or damage. Each US state sets its own minimum insurance requirements, though the types of coverage available are broadly similar across the country.

The main types of auto insurance are:

• Property damage liability: Covers damage to another person’s property or vehicle when you are at fault. Required in all states apart from New Hampshire.
• Bodily injury liability: Pays for medical costs and related expenses for others injured in an accident you caused. Required in all states apart from New Hampshire and Florida.
• Personal injury protection (PIP): Covers your own medical expenses after an accident, regardless of who is at fault. PIP is mandatory in some states.
• Uninsured/underinsured motorist coverage: Pays for injuries or damages if the at-fault driver has no insurance or not enough coverage. Mandatory in some states.

Drivers can purchase extra coverage to protect against risks not included in the minimum legal requirements, such as:

• Collision coverage: Pays for repairs to your own vehicle after an accident, even if you were at fault.
• Breakdown coverage: Helps cover towing and emergency repair costs.
• Comprehensive coverage: Protects against theft, vandalism, fire, natural disasters, or other non-collision damage.

Some comprehensive policies also offer added benefits, such as paying for a replacement vehicle while yours is being repaired.

Most standard policies do not cover:

• Intentional damage
• Damage caused by neglect or poor maintenance
• Theft of removable equipment not permanently attached to the vehicle

In most cases, auto insurance in the US covers the vehicle rather than the driver, meaning other drivers may be covered if permitted by the policyholder’s insurance.

Auto insurance costs in the US vary widely based on factors such as the driver’s age, location, driving history, and vehicle type. In 2025, average annual costs are $635 for minimum coverage and $2,399 for full (comprehensive) coverage.

Homeowners insurance

Homeowners insurance helps protect your home and belongings against risks such as theft, fire, or storm damage. Although not strictly a legal requirement in the US, most mortgage lenders will ask you to have it before approving a home loan.

A typical homeowners insurance policy includes several key parts:

• Dwelling coverage (Part A): Protects the main structure of your home, such as walls, roof, and foundation.
• Other structures (Part B): Covers detached buildings or features on your property, such as garages, sheds, or fences.
• Personal property (Part C): Covers belongings inside your home—like furniture, electronics, and clothing—if they’re stolen or damaged.
• Loss of use/additional living expenses (Part D): Pays for temporary housing and related costs if you can’t live in your home during repairs.
• Personal liability (Part L): Protects you if you accidentally damage someone else’s property or cause injuries to others.
• Medical payments (Part M): Covers minor medical costs if a guest is injured on your property, regardless of who’s at fault.

Most homeowners insurance policies don’t cover:

• Damage caused by earthquakes or floods (you’ll need separate policies for those)
• Normal wear and tear or maintenance issues
• Negligence or intentional damage

When you buy homeowners’ insurance, you’ll usually be asked for the estimated value of your home and belongings, as well as details of any security features in your home, such as alarms or smoke detectors.

As of 2025, the average cost of homeowners insurance in the US is about $2,110 per year, although prices vary by state, city, and property type.

Social insurance

This is a form of mandatory insurance in the US that is funded through taxes on wages and salaries. It helps protect workers and their families against loss of income due to retirement, disability, illness, or unemployment. The main programs include:

• Social Security: Provides income for retirees, people with disabilities, and surviving family members of deceased workers.
• Medicare: Helps pay for medical services and hospital care for people aged 65 and over, and for some younger people with disabilities.
• Unemployment insurance: Offers temporary payments to workers who lose their jobs through no fault of their own.

Both employees and employers contribute to these programs through payroll taxes. The current rates are (2025):

• 12.4% of earnings up to $176,100 for Social Security (split equally – 6.2% paid by the employee and 6.2% by the employer)
• 2.9% of all earnings for Medicare (split equally – 1.45% each – with high earners paying an extra 0.9% on earnings over $200,000)
• 6% of the first $7,000 of annual wages for unemployment insurance (paid in full by the employer)

Employers must register workers, withhold employee contributions from paychecks, and submit payroll taxes to the IRS and state agencies.

Self-employed workers and freelancers in the US pay social insurance through self-employment tax, which covers both the employer and employee portions of Social Security and Medicare. You can deduct the “employer half” of this tax when filing your annual income tax return.

Self-employed workers generally do not receive unemployment insurance, although some states offer voluntary coverage or private unemployment policies for business owners.

Because public social insurance provides basic coverage, many Americans buy private or supplemental insurance to fill the gaps – for example:

• Medigap or Medicare Advantage plans to expand Medicare coverage.
• Disability or income protection insurance for additional financial security.

Insurance for businesses with employees

In addition to social insurance, businesses that employ workers must provide certain types of mandatory protection. These include:

• Workers’ Compensation Insurance: Covers employees’ medical expenses and lost wages if they suffer a work-related injury or illness. This is a legal requirement in all states apart from Texas.
• Employer-sponsored Health Insurance: Under the Affordable Care Act, businesses with 50 or more full-time employees must offer affordable health insurance that meets minimum coverage standards.

Employers are responsible for the full cost of workers’ compensation and must arrange the coverage directly. With health insurance, cost-sharing varies by company and industry. Some employers cover the full premium, while others share the cost with employees through payroll deductions.

While large employers are required to offer health insurance, employees may choose to decline coverage if they have other options. Many employers also offer different plan levels, allowing workers to choose the coverage that best fits their needs.

Optional forms of insurance in the US

Health insurance

Health insurance is not required by federal law in the US, but five states and Washington D.C. currently require residents to have coverage or face a state-level tax penalty.

Most employees of large companies receive private health insurance through their employer. People with low incomes or those aged 65 and older usually qualify for public insurance programs, such as Medicaid and Medicare.

Others often need to buy their own coverage. Having insurance is strongly recommended, since medical care can be very expensive without it. Still, around 8% of Americans were uninsured in 2023, according to government data.

Most US citizens and lawful residents can buy affordable private health insurance through the ACA Marketplace. This lets people compare plans and see if they qualify for subsidies. All Marketplace plans must cover at least 10 essential benefits as a minimum, including hospital care, prescription drugs, and preventative services. However, dental and vision care are usually not included, though they can be added separately.

Insurance costs vary by state and plan type. In 2025, the average monthly premium for a gold-tier plan is about $615, while a bronze-tier plan averages around $456. If you’re looking for an expat-friendly global health insurance policy, you can get up-to-date premium quotes online from providers such as:

• Allianz Care
• Cigna Global

Life insurance

Life insurance provides financial protection for your loved ones if you die or become critically ill. It can help cover living expenses for dependents, mortgage payments, outstanding debts, and funeral costs.

When a claim is made, the insurer usually pays a lump sum to the chosen beneficiaries. The amount depends on the coverage level and type of policy you choose. The main types are:

• Term life insurance: Covers you for a set period—typically 10 to 30 years—often during times of higher financial responsibility, such as raising children or paying off a mortgage.
• Permanent life insurance: Lasts your entire life, guaranteeing a payout whenever you die. Premiums are higher, but the policy often includes a cash value component that can be borrowed against or withdrawn.
• Universal life insurance: A flexible form of permanent life insurance that allows you to adjust your premiums and death benefit over time.

Some employers provide group life insurance as part of their employee benefits package. This coverage is usually limited, so many people choose to buy additional private insurance for full protection.

Common exclusions on life insurance policies are deaths due to suicide, high-risk activities, and undisclosed underlying health conditions. Policies may also become invalid if you stop being a US resident, so check with your insurer before moving abroad.

Life insurance premiums in the US vary widely based on age, gender, health, lifestyle, and coverage amount. Estimated annual premiums in 2025 range from:

• Around $176 – $213 for a healthy 20-year-old, to
• Around $7,994 – $9,702 for a 70-year-old.

Disability insurance

Disability insurance replaces part of your income if you’re unable to work because of illness or injury. There are two main types: short-term (usually for a period of up to two years) and long-term (for longer periods, sometimes lasting a lifetime).

The percentage of income replaced depends on your plan, but it’s often around 50-70% of salary. Most policies have a waiting (elimination) period before benefits begin, which can range from a few weeks to several months.

Policies typically exclude self-inflicted injuries or those resulting from criminal offenses.

If your illness or injury is work-related, you may instead be covered by workers’ compensation insurance, which is separate from disability insurance.

Pet insurance

If you have a pet in the US, you can buy pet insurance to help cover vet bills. Most policies are for dogs and cats, but some insurers also offer coverage for birds, horses, or exotic pets.

Standard pet insurance typically covers accidents and illnesses, and you can often pay extra for plans that include preventative care – such as routine checkups, vaccinations, and dental cleanings.

Policies usually don’t cover pre-existing conditions or cosmetic procedures (like ear cropping or declawing).

Average US pet insurance costs in 2025 are around $62 for dogs and $32 for cats.

Renters insurance

While landlord insurance covers the building itself, renters insurance protects a tenant’s personal belongings against risks such as fire, theft, or vandalism.

Most renters insurance policies in the U.S. also include liability coverage, which helps pay for injuries or property damage that you accidentally cause to others in your rented home. Some policies also cover additional living expenses, reimbursing you for temporary accommodation costs if you have to move out due to a covered event (like a fire).

Premiums vary based on factors such as value of your belongings, coverage level, and location. The average overall annual cost is $153 in 2025.

Travel insurance

If you’re planning to travel abroad, travel insurance can help protect you against trip cancellations, lost luggage, and medical emergencies overseas. The cost depends on the level you choose.

Common exclusions include non-emergency medical treatment and losses caused by negligence (for example, leaving luggage unattended).

If you already have private health insurance, check whether it includes international coverage to avoid paying for duplicate protection.

Business liability insurance

There are two main types of business liability insurance in the US:

• General Liability Insurance: Covers claims for bodily injury or property damage caused to others.
• Professional Liability Insurance: Covers claims and legal costs resulting from professional mistakes, negligence, or failure to deliver services as promised.

Liability insurance isn’t legally required for all businesses or freelancers, but it’s often necessary to secure contracts or professional licenses. For example, doctors, lawyers, and construction companies typically need liability coverage. Even when not mandatory, it’s strongly recommended to help protect against costly legal claims or damages.

How to choose an insurance company in the US

When choosing insurance in the US, you may want to consider a number of factors beyond premium price, such as:

• Flexibility: Can you tailor the policy to meet your needs, ensuring that essential coverage isn’t excluded and you’re not paying for benefits you don’t need?
• Deductible options: Many forms of insurance include a deductible, which is an amount you must pay when you make a claim before the insurance applies. Can you adjust the deductible to lower or raise your premiums?
• Claims process: How long do claims take? Does the insurer deal with payments directly or do you need to pay upfront and request a reimbursement?
• Customer reviews: How does the company rate on independent review platforms or customer satisfaction surveys?
• Overseas coverage: Is the policy still valid if you travel or move abroad?
• Ethics and sustainability: How does the company perform on corporate responsibility and sustainability rankings, such as CSRHub or Corporate Knights?

Tools for comparing insurance in the US

• Insurify – compares real time quotes for a range of insurance types including auto insurance and home insurance
• ACA Health Insurance Marketplace – you can search for affordable health insurance, although you need to enrol on the platform as a US resident

Making insurance claims

If you need to make an insurance claim in the US, the first step is to contact your insurer as soon as possible. Many companies now allow you to file claims online, although you can also do this by phone or mail.

The exact process varies between insurers, so check your policy documents or the company’s website for specific instructions. Typically, you’ll need to provide your policy number and complete a claim form with details such as the date, location, and nature of the incident. You may also need to submit supporting documents, such as photos, receipts, or police reports.

Your insurer may contact you for more information while reviewing your claim. Most claims are resolved within around 30 days, although more complex cases can take longer. There’s no single nationwide deadline for insurance companies to settle claims, so it’s best to check with your state’s Department of Insurance for local rules.

If you’re unhappy with how your claim is handled, first raise the issue directly with your insurer. If it’s not resolved, you can file a complaint with your state Department of Insurance. The NAIC website has information on how to file an insurance complaint.

If you’re an expat in the US making a claim on an international insurance policy, you can use a Wise multi-currency account to receive your payout. The account lets you receive payments in 20+ currencies. You can also send payments to accounts in 140+ countries with Wise. International transfers are quick and low-cost, using the mid-market exchange rate with no hidden fees.

Glossary of US insurance terminology

Name	Description
Deductible	Portion of the insured loss paid by the policyholder.
Premium	Money charged for the insurance coverage reflecting expectation of loss.
Risk	Uncertainty concerning the possibility of loss by a peril for which insurance is pursued.
Term	Period of time for which policy is in effect.
Underwriter	Person who identifies, examines, and classifies the degree of risk to determine whether or not coverage should be provided and, if so, at what rate.

Useful resources

• National Association of Insurance Commissioners (NAIC) – national body that supports regulation of US insurance and offers information to consumers and businesses
• Insurance Information Institute – provides information and research on US insurance