The most common mistakes one can make when driving into Mexico is to assume that your Mexico tourism auto insurance policy has the same coverage as your US policy. In fact, Mexico auto insurance and US auto insurance are very different. They are different because they address the laws and regulations of their issuing country or state. True, there will be similarities between Mexican and US auto insurance policies, but there are important differences to be aware of.
If you buy a Mexico auto insurance policy and drive into Mexico, be aware of these difference. The following are some important differences, exceptions and quirks found in Mexican tourism auto policies:
The Mexican law for minimum liability limits requires you carry a high death liability limits. The amount needed can vary between states. However, generally speaking, the amount required is higher than the minimum financial responsibility limits in most US states. Customers can purchase up to $500,000 combined single limit on their Mexico auto policy. When buying Mexico auto insurance coverage, it is highly recommended that one purchase the highest level of protection offered.
If there is an accident with a Mexican citizen while driving in Mexico, it makes sense that the claim and civil dispute occur in Mexico. However, if two Americans have an accident in Mexico, and elect to file the claim in the US, or bring suit in US courts, your Mexico tourism auto insurance policy will not respond or provide coverage. This underscores the requirement to report claims while in Mexico (before leaving home). Moreover, the Mexican courts are the proper jurisdiction for any civil disputes.
In the US, passengers in your car can make claims against your bodily injury coverage. However, a Mexico auto insurance policy does not cover liability for bodily injury sustained by a third party passenger in the insured’s vehicle. Alternatively, the no-fault medical payments coverage for passengers can be purchased to provide this form of coverage.
Mexican motorcycle policies do not provide medical payments coverage. Therefore, there would be no coverage for any passengers or the driver under this coverage.
While it’s common for a US homeowners insurance policy to have an exclusion for flooding, the typical auto insurance policy has no such limitations. However, a Mexico auto policy will not cover flooding related to tidal waters, even if other forms of flooding are covered.
Damage caused by a person without a valid driver’s license or under the influence of alcohol or drugs is not covered.
Loss or damage to under-parts of the insured vehicle as a result of overloading or rough roads is not covered.
Theft of parts and/or accessories is not covered. Theft coverage is provided, however, it’s only if the entire vehicle is stolen. The real difference in US and Mexican auto insurance is that vandalism is also excluded. However, these coverage options can be purchased if you add the optional coverages.
Trailers or boats that are towed must be listed on the policy in order to be covered. If the trailers or boats are not listed, there is no coverage for either the unlisted trailers and/or boats, NOR the towing vehicle, even if listed.
Like your US policy, physical damage is not included unless it is purchased and specifically described in the policy declarations or certificate. If you purchase physical damage coverage, it typically covers collision, overturn, fire, natural phenomenon, glass and total theft. While it is similar to a US policy it is subtle in that all the same perils are not included.
When an insured has an accident it has to report while the insured is still in Mexico. Further, if you return to the US without an adjuster’s report, it will void your coverage. This is very different from a US auto insurance policy, where it is fine to have an accident in one state, then wait to report the claim after returning to the insured’s how state.
Another major difference is in the way premiums earn. This effects how refunds and cancellations work. With some Mexico tourism auto insurance companies, 6-month and annual polices fully earn after 15-days. This means they can’t be cancelled and no refund will issue after 15-days. Additionally, daily polices are not eligible for refunds or cancellations after the effective date of the policy.
For the US consumer of auto insurance, some of these difference will seem very different. In some cases, they are business decisions by the insurance company. However, in most they simply reflect Mexican Law and and how Mexican auto insurance works.
Our partners carriers take special care to ensure their policies are compliant and provide consumers with the most current options. And we monitor changes in the market and rules to help you feel safe when driving in Mexico.
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