What Does Mexico Car Insurance Cover?
- Daily, Six Months and One Year Terms Mexico auto insurance
- Discounts on limited Territory for Sonora Only
- Physical Damage and Total Theft
- GAP Coverage for Mexico travel insurance
- Fixed deductibles
- Third Party Mexican liability insurance up to $300,000
- Unlimited Legal Aid, accident related issues
- Bail Bond up to liability limit
- Road Side Assistance
- Medical Expenses including International Medical Air Transportation
- Option for Vehicle Repair in the U.S.
- Claims Settled in the U.S. in U.S. dollars (www.internationalclaimservice.com)
Driving Across the Mexico-US Border Crossing
Before driving across any Mexico-US border crossings, here is some important information you need to know to help you plan for your next trip to Mexico.
Using the links above, follow this checklist and make sure you carry with you the documents that apply to you:
___ US/Canadian identification (Click here to confirm required documents)
___ Vehicle permit (Click here to process your permit online)
___ Original Title or Vehicle Registration
___ Lienholder’s notarized letter of permission
___ Valid Driver’s License
___ Credit Card (with same name as on Title of vehicle.)
___ Mexican auto insurance policy
___ Notarized letter of permission for minors traveling without their parents
Why Choose Bancorp as Your Broker for Mexico Car Insurance?
The last couple of years my parents have driven the Baja to Los Barriles, Baja California Sur, just an hour north of Cabo. They both really like taking road trips. My mom likes to stop along the way take pictures and identify the plant life growing alongside the road. My Dad indulges her, and he just enjoys the drive. But before you get your ride ready to drive to Mexico there are a few things you need to know.
You must buy Mexico Auto insurance from a Mexican Auto Insurance company or an American Auto Insurance company that has a division that writes Mexican Auto Insurance. Why? To start with Mexico is a foreign country and it has its own laws regarding auto insurance. It is illegal to drive in Mexico without Mexican auto liability insurance.
No, your personal auto insurance will not extend to cover you driving your car in Mexico!
Your American auto insurance policy is written in the U.S. under U.S. liability laws. Like I said above Mexican liability laws are different and you will not have coverage for your car under your current U.S. Auto insurance policy while you are driving in Mexico.
You must purchase a Mexican Auto Insurance policy that will cover you for the time you are driving your car, van, truck, etc. in Mexico.
I know it sounds straight forward and easy to do, just buy Mexican auto insurance. But like many things in insurance this is not the case. Trust me on this one, I have done the research. I am going to get a little insurance geeky on you, but its important you understand what you are buying and make sure you have the coverage you need if you get into an auto accident while driving your car in Mexico.
Under Mexican law you are required to have liability insurance
If you get into an auto accident in Mexico the liability insurance covers bodily injuries and property damage to others. You can usually choose how much liability coverage you want to purchase. I suggest you buy the minimum of $500,000, some companies will let you buy $1,000,000, which is not a bad idea.
Why? Remember you are in Mexico and Mexican liability car insurance works differently than the U.S. If you are involved in an auto accident in Mexico and that accident results in a death, Mexico Federal Liability Law states your insurance must pay the Mexican state’s minimum wage multiplied by 5,000 plus funeral expenses, per person. The Mexican state can then multiply this amount by up to five times (in some Mexican states a judge will determine the limit to be paid).
What would that look like. Let’s say the minimum wage in Cabo is $172.87 Mexican Pecos this is approximately $9.56 U.S. dollars. 5,000 X $172.97 = $864,850 Mexican Pecos, which is about $47,852.00 U.S. Dollar per person based on a $18.00 U.S dollar exchange rate. The state legally can then multiply $47,852 by five which amounts to $239,260.00 U.S. Dollars per person. You can see how quickly you could spend the $500,000 in liability coverage.
Physical Damage to Your Car in Mexico
In Mexico you legally are obligated to buy auto liability insurance only. If you want to cover your car for physical damage, then you will need to add physical damage to your Mexican auto liability insurance. In the U.S. the auto insurance company automatically calculates the physical damage coverage amount. But when your buy physical damage coverage with a Mexican auto insurer they let you pick your own value. Most of the time the company recommends you price the cost to replace your car using Kelly Blue Book value. But you might want to check how much it would cost you to buy the same make model of your car, truck or van online. What you are trying to do here is get a value that will help you replace your car should it be totaled in an accident. You also want to have enough coverage to fix your vehicle if that is what you are going to do. The policy verbiage is acquisition value, (the amount you paid for the purchase of the insured vehicle as of the invoice dully established.) If you still have your original bill of sale great. If not, you need to do the best you can by doing your research as how much it would cost you to buy car today.
Other coverages you may want to add to your Mexican Auto policy:
- Glass Damage
- Total theft, fire, and natural phenomena
- Vandalism/Partial theft
- Legal expenses for an attorney, bail, and court cost
- Travel assistance to help you get home without your car
- Medical expenses due to being in an auto accident.
In Mexico. If you do not add the above coverages to your policy, you will not have the coverage.
Remember Mexican Auto Insurance is operating under Mexican law. It is important for you to know when you buy Mexican Auto Insurance from a Mexican Auto Insurance Company. Even if you buy Mexican Auto Insurance from an American Insurance company that has a Mexican Insurance company as part of their group. All contracts are negotiated and will be litigated in Mexico under the Mexican government legal system.
You Must Read the Policy Conditions, Definitions, Vehicles Insured, Persons Insured, and the Exclusions. Because the policies are all different and each insurance company writes their own policies using their own coverages you might be buying an auto insurance policy that will not cover you or your car, truck or van because a policy condition or exclusion invalidated the coverage.
Let me give you a few examples: This policy wording is from a well know American Insurer who has the reputation of selling top shelf personal auto insurance policies, this policy is from their Mexican auto insurance company.
One of conditions of the policy is that you use the insured vehicle and the accident happened on a “conventional road”. A conventional road is described as roads suitable for normal traffic of automobiles. Conventional roads do not include farm roads, forest roads, dirt roads, riverbeds, or banks, beaches, or similar types of off-roads. I have seen several people drive their cars on the beach or up a dried river bed. In Mexico you do not have to drive very far to find yourself on a dirt road. In this policy the term conventional roads are used over and over again as part of the conditions of coverage and the exclusions of the policy. If you get into an auto accident on a dirt road you will not be covered for liability to third parties, physical damage to your car, medical payments to you or those in your car. The coverage is null and void if it happens away from a conventional road as defined in the policy definitions.
This policy also will not cover any driver who is under the age of 21 or over the age of 80.
It excludes any High Value or Exotic Vehicles. The policy lists the vehicles. They also exclude brands like a Hummer1, Geo Tracker, Chevrolet Corvettes, and Suzuki Samurai etc.
Van owners who drive their vans to Mexico read your policy carefully. I have seen exclusions for medical coverage for bodily injury is you are injured while occupying your insured vehicle while parked for use as a residence or premises. You may not be covered for medical by the policy if you are camping in your van and someone runs into it and you sustain an injury that needs medical attention.
Other Conditions to Note
If you and your partner are both going to be driving the car, make sure both of you are named as the insured on the policy. Some policies are named insured specifically.
The time you must report the claim to the insurance company. Most policies state immediately after the accident. Every policy states the accident must happen in Mexico.
If you have a fender bender in Mexico in Mexican border town you might want to drive home and have your home shop, make the repair. Read your policy and make sure can still get payment if you use a shop in the U.S. Also, if you use a shop in the U.S. you can buy and endorsement that will increase the labor costs a specific dollar amount to cover U.S. labor costs which is customarily higher than labor costs in Mexico.
If you are driving in Mexico longer than 30 days the policy you buy will generally we a six month policy. In most cases the premium is fully earned. That means you will pay the six months up front and even if you cancel a policy in two months you will not get 4 months return premium.
Every policy states if you have a problem with your claim or you are required to show up to court the jurisdiction will be in Mexico. You may have to travel back to Mexico to attend a court case against you. Your time and the plane ticket will probably not be covered under the policy. When you drive in Mexico you a subject to the laws of Mexico. Remember that.
Our Top Tips When Buying Mexico Car Insurance
- Buy Mexican auto insurance to cover your auto.
- Increase your liability limits to $500,000 or $1,000,000.
- Most tourist policies exclude coverage if you are driving off road. You might be able to buy the coverage back or look for a carrier that does not specifically exclude dirt roads.
- READ THE ENTIRE POLICY and ASK A LOT OF QUSESTIONS.
Do I Need to Buy the Mexico Auto Insurance When I Rent a Car in Mexico?
The short answer is YES. Yes, you need to buy both the liability insurance and the physical damage insurance offered by the rental car company. I would strongly suggest you also buy the medical payment, legal assistance, and the medical evacuation coverages. This is my professional advice to anyone who asks.
But…I can hear you now, this is a replacement car while I am in Mexico and my own auto insurance should cover it. There is also coverage under my credit card, right? Nope if you do not buy the auto insurance provided by your rental car company in Mexico you are driving without insurance and you are breaking the law in Mexico. Mexico is not the United States, your auto insurance you carry at home is written and sold by American companies. The policies are written to reflect U.S. liability laws. Your U.S. auto insurance policy is not written to cover you in Mexico. Mexico has different liability laws, and you need an insurance policy that will cover you under the laws of Mexico.
Under Mexico Law, Liability Insurance is Required
If you get into an auto accident in Mexico the liability insurance covers bodily injuries and property damage to others. You can usually choose how much liability coverage you want to purchase. I suggest you buy the maximum amount of liability coverage available through the car rental company. You should be able to purchase $300,000, but if you are offered $500,000 check that box.
Why? Remember you are in Mexico and Mexican liability car insurance works differently than the U.S. If you are involved in an auto accident in Mexico and that accident results in a death, Mexico Federal Liability Law states your insurance must pay the Mexico state’s minimum wage multiplied by 5,000…plus funeral expenses, per person! The Mexico state can then multiply this amount by up to five times (in some Mexico states a judge will determine the limit to be paid).
What would that look like. Let’s say the minimum wage in Cabo is $172.87 Mexican Pecos this is approximately $9.56 U.S. dollars. 5,000 X $172.97 = $864,850 Mexican Pecos, which is about $47,852.00 U.S. Dollar per person based on a $18.00 U.S dollar exchange rate. The state legally can then multiply $47,852 by five which amounts to $239,260.00 U.S. Dollars per person. You can see how quickly you could spend the $500,000 in liability coverage.
Other Coverages You May Want to Buy While Driving in Mexico
Liability insurance does not cover damage to the car you are driving or injures to you or your passengers.
Physical Damage Coverage
Will pay if the car is damaged in an accident, if it is stolen, or if you run into a cow, goat, rock etc. Any physical damage done to the car while you were driving the car.
It’s always a good idea to walk around the car before you drive it off the lot and look for any physical damage that may have happened to the car before you rented it. You want to make sure you are not charged for someone else’s physical damage done to the car prior to you renting it.
Medical Payments
This coverage will pay for you or you passengers if you are hurt in a car accident.
Legal Assistance
If you get into a car accident in Mexico, you could find yourself in jail. You will need a Mexican attorney. Once again you are in a foreign country with different laws then the U.S. You may also need to pay court costs and bail bonds.
Roadside Assistance
This coverage pays if your car breaks down and you need a tow truck, a flat tire changed, or a locksmith because you lost the keys.
Medical Evacuation
If you need to be transported to a hospital or treatment facility, this coverage pays for emergency transportation.
Other Questions to Ask Your Agent About Mexico Car Insurance
- Will I be covered if I am driving on a dirt road. Many Mexican Auto Insurance Policies exclude coverage if you get into an auto accident on a dirt road. Many carriers have specific verbiage in their policies for covered conventional roads. For example, MexiPass Policies state that “Conventional roads – are those roads suitable for the normal traffic of automobiles without exposing to additional danger the integrity of an insured vehicle. Conventional roads do not include farm roads, forest roads, dirt roads, riverbeds or banks, beaches or similar types of off-roads.” This is super important as most roads in Mexico are dirt or similar to beach.
- Do I need to report an accident to the rental company immediately? If not, what is the time frame for me to report an accident?
- Is there an number I can to get legal assistance if I am in an auto accident and I need legal help?
- Do I need to put additional drivers onto the policy if my partner is also going to be driving the car? Many times, the insurance policy is written as a named driver policy. That means if the driver is not listed on the policy as a named driver there may not be any coverage if your partner or a friend is driving the car when the accident occurs.
Yes, you need to buy the Mexico Car Insurance at the rental car company if you rent a car in Mexico.
You can buy Mexican auto insurance online yourself. But if you do not want to read every policy yourself. My personal auto agents have read the policies. They will be happy to explain to you how they work and what you need to do in case you have an accident in Mexico.
Call Bancorp 800-452-6828
