Mexican Auto Insurance
Basic Information About Mexican Auto Insurance
Let’s start with something simple: You need Mexican auto insurance to drive in Mexico. Your USA or Canadian insurance policy IS NOT VALID in Mexico. But I have credit card coverage you say. Credit card coverage, assuming it is valid in Mexico (check with your card issuer) does NOT provide liability coverage – the damage you do to other people or property in an accident. And in Mexico, like in the USA and Canada, liability insurance is mandatory.
If you are driving your own car across the border you can purchase a Mexican policy at the border on the USA side or if you are a member of the AAA you can check with them for Mexican policy availability.
But let’s say you decide to take your chances and roll without Mexican insurance and you are involved in an accident. One of the advantages and services you pay for with a Mexican policy is that the carrier is your guarantor or bailor. Remember those “Get out of jail free!” cards in Monopoly? That is sort of what this means. If following an accident the authorities demand to see your proof of insurance (copy of contract) and you don’t have one, ay pobrecito, you could end up in jail until blame is established and financial responsibility sorted out. It is highly unlikely you have “palancas” (connections) in Mexico so you might be a guest in their jail for a while.
Mexico averages around 500,000 vehicle accidents annually with 20,000 deaths and 750,000 injuries. Take the insurance.
When doing some research on this topic I found this list of damages that could happen resulting in liability exposure in Mexico in relation to traffic accidents:
- Actual damages: Damages based on the actual value of the other person's vehicle plus their wages and medical expenses.
- Moral damages: These are like the pain and suffering damages in the USA. This usually can't be used often in the Mexican courts and will likely add up to a quarter of the overall damages.
- Various: In many Mexican courts the judges are given the option of giving out extra damages as they see fit. Depending on a case's facts there may be an exception that leads to more damages then would otherwise stand.
You can also be held responsible for any damages caused to infrastructure such as the roadbed, guard rails, signage, signals, etc.
Criminal liability would include driving under the influence - and insurance companies will often waive their responsibility for such instances, as they might for driving under certain conditions (driving under the influence of illegal, prescription, OTC drugs or alcohol, driving off-paved roads and 4WD trails).
So What Insurance Do I Need?
I am not a lawyer or insurance expert, nor do I play one on TV. I am writing this to share with other travelers based on my own experience. I have been to Mexico countless times, have driven my share of kilometers and I always buy the insurance.
Let’s start with something easy. Collision Damage Waiver (CDW or LDW) and Loss-of-Use. Covers you for damage caused to the vehicle and loss of use fees while the car is in the shop getting fixed. This is the insurance your credit card company may offer – check before you go! Make sure how the payout would work; for example do you need to front the money yourself and request reimbursement from the credit card company?
Third Party Liability – Spanish=Seguro de Responsibilidad Civil Obligatoria. Note that last word. Obligatoria. Means exactly that. It is obligatory! This is what covers you if you cause injury, death or damage to others and/or their property. How much liability protection do you need? Well cars cost just as much in Mexico, if not more, than they do back in the USA or Canada. And the liability minimums proscribed by Mexican law are absurdly low, just like they are in the USA or Canada. Let’s put it this way: If you have an accident you will always be seen as the “rich gringo staying in an expensive timeshare”. So you want to be sure you carry sufficient coverage to pay for the world’s smartest talking donkey you just ran over. Don’t under insure yourself.
Medical coverage (Gastos Medicos) may be offered for your vehicle’s occupants; check your home health coverage before leaving for Mexico to see if you need this.
Road assistance (Auxilio Vial) may be included in your policy.
Where to get coverage?
I'm a AAA member so I purchase Mexican policies for my own cars when I drive them into Mexico. Alternatively the Mexican company Sanborn's has an excellent reputation with offices at all major ports of entry.
When renting a car I just go with the rental company's insurance as it is the most convenient.