Driving to Mexico? Make Sure You Have the Right Car Insurance
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Spring break is just around the corner, and many Americans will soon flock to Mexico’s white sand beaches and bustling cities to enjoy their time off. But those opting for a road trip will need to sort out their car insurance coverage first. Mexico legally requires all drivers, including American tourists, to have liability insurance, and failing to purchase enough insurance could land drivers in jail should they cause an accident.
Standard U.S. auto insurance policies won’t cover drivers south of the border, so it’s vital to purchase Mexican car insurance before making the trip.
Liability car insurance is crucial when driving in Mexico
Many large U.S. insurance companies partner with Mexican insurers to offer Mexican car insurance to their customers. Plans are flexible, starting at a single day of coverage and going for as long as a year. Another option is to purchase insurance from a U.S. broker that specializes in Mexican car insurance.
Mexico requires drivers to hold 100,000 Mexican pesos (around $5,800) for bodily injury and death liability coverage and 50,000 Mexican pesos (around $2,900) for property liability damage. If you're caught driving in Mexico without this minimum coverage, you may face a fine of at least $200. If you cause an accident while driving uninsured in Mexico and cannot pay for the damages you caused, you could face jail time. That’s because in Mexico, all car accidents are considered criminal offenses, not just civil matters.
“If you don't have insurance and you cause an accident, you can be held by the authorities,” says Geoff Hill, vice president of business development at Baja Bound, a California-based agency that specializes in Mexican auto insurance. “If you're at fault, they will hold you until you can come up with the money to pay for the damage you [caused]. If you had insurance, you wouldn't be on the hook for that.”
Oscar Arrieta, an Allstate insurance agent in El Paso, Texas, stresses the importance of having strong liability coverage above all other protection while driving in Mexico. The country’s liability insurance requirements are likely not enough to protect you and your finances if you cause an accident. “To me, protecting your vehicle is secondary,” he says. “It’s [about] the damage you create.”
Arrieta recommends a policy that has at least a $300,000 combined single limit, which is one larger liability limit to cover both bodily injury and property damage. Baja Bound only sells policies that start at that $300,000 limit and go up to $500,000 in liability coverage.
Other types of car insurance coverage worth having in Mexico
Because there’s a possibility that a car accident could land you in jail, many Mexican insurance policies include legal assistance coverage. This benefit can help you find and pay for an attorney and post bail, up to your policy’s limit.
Mexican insurers also typically offer hands-on support at the scene of an accident. If you’re in a car accident, an adjuster from your insurance company will arrive at the accident to examine the scene and determine how to proceed with other drivers’ insurers. That’s a big difference from how things work in the U.S., where adjusters won’t get involved until later.
To drive with peace of mind, it might be wise to consider strengthening your Mexican car insurance policy by purchasing medical payments coverage, which pays for the cost of treating your and your passengers’ injuries after an accident.
Even though it’s legally required, only a small portion of drivers in Mexico have car insurance, according to Mexico’s National Commission for the Protection and Defense of Users of Financial Services. And those who do might only satisfy the $2,900 property damage liability coverage requirement.
That is why you should also consider buying physical damage coverage and theft coverage which, combined, offer similar coverage to collision and comprehensive insurance in Mexico. These cover the cost of repairing or replacing your own car after it's stolen or damaged in various situations, up to its current market value. Some U.S. insurance companies offer limited insurance coverage in Mexico, as long as you're within a certain distance of the border, so check with your insurer to see if damage to your vehicle is covered in Mexico.
But no matter what, if you’re driving in Mexico, it is crucial to purchase liability insurance coverage at the very least — even if your insurer will cover damage to your car while driving in Mexico.
Mexican rental car insurance
If you’re planning to rent a vehicle for your trip, the best move will be to do so once you’re in Mexico. Many U.S. rental companies restrict or prohibit their cars from being driven into Mexico. The coverage options available at Mexican rental counters will all comply with the local minimum requirements, so that will be one less thing to worry about when your only concern should be finding the best taquería in town.
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