Do I Need Mexico Auto Insurance?

You’re taking your first drive to Mexico and are wondering, “Do I need Mexico auto insurance?” It’s a common question. When it comes to driving in Mexico, there are several misconceptions regarding the importance of auto insurance. In fact, some believe that being caught driving without insurance is a mere infraction that comes with a fine and a slap on the wrist. Others think, “Hey, it’s Mexico,” you can work it out with the officer if you get pulled over.

Unfortunately, this is not the case. It’s extremely important to have the proper liability insurance when driving in Mexico. So, if you’re asking “Do I need auto insurance in Mexico,” let us give you two of the most important reasons why you do.

1 | Driving without insurance is against the law

In the US, your state likely has compulsory insurance laws that require you to purchase auto insurance at a minimum financial responsibility limit. Domestically, we understand the consequences of driving without insurance, it can mean fines, confiscation of driver’s license or vehicle, suspension of registration, or other uncomfortable punishment.

Well, the same is true in Mexico. They also have compulsory insurance laws. In fact, in 2019 they increased the minimum liability standards increased as a signal of their increased concern over people driving without insurance and being underinsured.

If you get pulled over by the Mexican authorities for a traffic violation, you will be required to show proof of Mexican car insurance.

Car accident procedures are different in Mexico

How car accidents are handled in Mexico is different than in the US. Here, we are used to a fender bender leading to some mild disappointment and then the exchange of insurance information. However, in Mexico, it works differently. It is common that after an accident you are taken in front of a judge to determine fault – immediately.

What if I’m at fault?

Let’s face it, accidents happen. However, in Mexico, if you’re involved in an accident and pulled before the judge for the determination of fault, the party responsible for the accident is held until they establish their ability to pay for damages. If they cannot establish financial responsibility, in some cases this can mean jail time.

When at fault for an accident, a driver with the following insurance coverage will be considered compliant with the financial responsibility standards:

When one possesses limited to no knowledge of the legal system in Mexico, sitting in front of a judge can be intimidating, even for Spanish speakers.

The bottom line is that not having insurance can equal a fine, or worse, jail time. This is why seasoned Mexico visitors call Mexico insurance the “get out of jail free card.”

2 | US car insurance Doesn’t cover you in Mexico

There is a common belief that a US car insurance policy provides coverage in Mexico. It doesn’t. In some instances, your US auto insurance policy may have a “limited Mexico endorsement,” but this doesn’t satisfy the legal requirements of Mexico.

First, by Mexican law, you are required to have liability insurance by an admitted Mexican insurance company. Your US auto insurance policy, even with the limited Mexico endorsement, does not comply with these requirements. Moreover, Mexican authorities likely won’t even recognize names like State Farm, Allstate, Geico, or Progressive. They are familiar with insurance carriers like ABA Seguros, AIG, Qualitas, El Aguila, or Mapfre.

What does my US car insurance say about Mexico?

In fact, your US auto insurance policy expressly defines the territory in which you can get coverage, and it doesn’t include Mexico. If you review your policy territory clause, you will find language like the following:

The policy territory is:

• The United State of America, its territories or possessions;

• Puerto Rico; or

• Canada

This policy also applies to loss to, or accidents involving, “your covered auto” while being transported between their ports.

What does this mean? Well, it means that your US auto insurance policy specifically excludes coverage for anywhere outside of the US, Puerto Rico, or Canada.

But I purchased the Mexico endorsement

You bought the limited Mexico endorsement, and you are still not convinced that you aren’t covered. Well, take a minute to read your endorsement. You will find that it clearly states that it doesn’t meet the requirements of the laws of the Republic of Mexico. The language may read something like this:

The coverage we provide you by this endorsement does not meet Mexican auto insurance requirements.

You are required to purchase liability insurance through a licensed Mexican insurance company for this endorsement to apply.

In addition, most limited Mexico endorsements usually limit coverage to 25 miles into Mexico. While this may vary by company, the fact that there is a limitation creates a problem. One minute you could be covered, and within a mile, you could be out of coverage.

You see, in Mexico, auto insurance accidents are both a matter of civil and criminal law. So, you need to have the proper liability insurance, from the proper insurance carrier, to meet the requirements when driving in Mexico.

The bottom line

If you’re asking, “Do I need auto insurance in Mexico,” it’s going to be hard to promote a reason better than it’s the law – and you could end up in a Mexican jail without it. But there are several other good reasons to buy Mexico auto insurance. For instance, these policies frequently come with, travel assistance, provide medical payments, and emergency roadside assistance. Then, of course, there are classics – it protects your financial interests and the welfare of your passengers.

If you have more questions and want to speak with an insurance agent, you can call us at (877) 334-7646 or start an online quote.