Thousands of people from the United States travel to Mexico each year. However, many people are unaware that their car insurance from the United States is invalid in Mexico. If you're driving a rental automobile or your own car into Mexico, you'll need a particular sort of insurance.
Here's all you need to understand about Mexican auto insurance if you're planning a leisurely road trip across the neighbor to the south or need to conduct business.
Many Canadians are unaware that Mexico does not recognize international auto insurance plans until it is too late. While your car insurance policy in Canada may provide full coverage for all vehicles and people involved in an accident, it is not valid in Mexico. At the scene of an accident, the police will keep you and your vehicle until the cause of the collision can be determined.
The Napoleonic system in Mexico holds that you are guilty until proven innocent, not the other way around. If you are judged to be at blame and injuries have occurred, you are accountable for not only medical expenditures but also for providing financial support to the person and their families until they recover. This is why you must buy a Mexican insurance policy from a company that is licensed to operate in the country.
Why Should I Buy Mexican Car Insurance
There are some significant coverage disparities between vehicle insurance policies in the United States and Mexico due to the differing legal systems.
Liability insurance is the first policy that will be discussed. In contrast to the United States liability in Mexico is determined by laws, rather than case history. Some love it, while others despite it; it's up to you to determine whether you like it or not. There is no redress for pain and suffering or mental distress in Mexican law, and thus no liability for it.
Due to the fact that Mexico is not nearly as litigious as the United States, claims in excess of $100,000 are uncommon. Although property damage to others sometimes approaches this limit, a Bodily Injury claim that reaches this level is uncommon. This, by the way, is the polar opposite of how claims are resolved in the United States.
Your Mexican insurance policy will not protect you if you have an "accident" in Mexico and a lawsuit is filed against you in the United States. Now, while this may seem obvious to some, a liability insurance coverage acquired from a Mexican insurer will only protect claims made against you in Mexico.
Again, let us now turn our attention to automobile insurance. There can be a considerable variation between different Mexican insurance firms in pricing, coverage, limit, and deductibles, so let's take a look at something that needs attention. You want a combined single limit coverage, with split limits certain insurance companies will decrease the amount payable. The standard of Mexican car coverage is a combined single limit of $100,000 maximum. Stay far from split limits.
Last but not least, Vandalism and Partial Theft are excluded from Mexican vehicle insurance policies. Policies in the United States are generally "all risk," but this is not the case in Mexico. Insurance plans in Mexico are referred to as "named perils" policies. Collision, fire, total theft, some natural events, and other risks were covered under these policies. All insurance firms in the United States will utilize a fixed deductible. In Mexico insurance firms frequently offer a variable deductible that is based on a percentage of the value of the car insured.
Who's Insuring You?
Buyers of car insurance in Mexico are frequently misled into believing that the broker, rather than the Mexican Insurance Company, will appropriately manage any claim that may arise during their stay in Mexico.
The broker who offers you the policy is far less important than the insurance company that underwrites it. Since all insurance policies are marketed through brokers, it's essential to understand which insurance company (or companies) is underwriting the policies that the broker is selling to you.
With the recent financial market turbulence, it is more crucial than ever to buy Mexico car insurance from a financially stable company. If your insurance is placed with a struggling insurer, no matter how reputable or well-intentioned an agent or insurance broker is, you may be in for some unpleasant surprises if you make a claim.
Insurance from a more solid and financially sound insurance company may be more expensive, but the higher premium reflects a smaller risk for you in the event of a claim. In Mexico, there are more than fifty insurance firms. Some insurance firms are in good shape, while others are in bad shape, as is the situation with all insurance companies around the world.
Secure yourself and your investment by asking the broker "who underwrites your policies?" and ensuring that the insurance firms underwriting your policy have a solid, consistent track record.
What to Look for in a Mexican Auto Insurance Policy
Regardless of where you get your auto insurance, make sure that it covers the following essential features:
- Financially-Sound Insurance Company
Check to see if the insurance company is financially stable before you buy coverage. Although policies from smaller insurance companies may be less expensive, the lower premium corresponds to a larger risk for policyholders. Don't just look for the cheapest policy; think about who is insuring you.
- Fully Licensed Broker, Good Infrastructure
Since all insurance plans are marketed through brokers, make sure that the broker you work with is legally licensed and that the policies they offer are completely transparent. Before you are asked to buy, you should be bale to check the "small print" of any policy online.
In addition to insurance coverage, good infrastructure implies that the broker has outstanding customer service facilities, makes good use of technology so that you may purchase your policy quickly, and that the policy includes help and support services when you're in Mexico.
- Cover for Personal liability, Legal Counsel and Bail-Bond
Your vehicle insurance coverage in Mexico must cover personal liability , legal counsel, and a "bail bond" element. If you're in a significant collision with the police, you'll be detained and held until the cause of the accident is determined. If the case drags on , the bail bond may be used to have you released until the outcome of the investigation.
- Local Support, When you Need it Most
Your broker and insurance provider should provide local support services in Mexico so that if you have a claim, you can contact for assistance and be greeted by English-speaking service representatives who can efficiently manage your call and dispatch the assistance and support you need.