When you drive your car to Mexico, travel with complete peace of mind, by being properly insured. Your U.S. or Canadian insurance policy, however comprehensive, won't cover you in Mexico, but affordable insurance is available...
Although your U.S./Canadian car insurance policy may be comprehensive, and might also extend some limited damage coverage in Mexico, you will still need to purchase policy that is legally valid in Mexico.
U.S. and Canadian auto insurance policies, however comprehensive, hold no legal jurisdiction in Mexico. This means that you must buy separate insurance cover for your car while you're driving in Mexico if you want to travel with complete peace of mind.
If you are driving your car improperly insured in Mexico and you become involved in an accident it will, at best, cost you a lot of money and, at worst, leave you imprisoned in a Mexican jail house. Presenting a U.S. or Canadian auto insurance policy will be of no use because these documents have no legal or actual force in Mexico, and the companies backing them will not settle any claim arising when you or your car are situated south of the border.
Drivers who are involved in serious accidents in Mexico are usually arrested pending investigation. You can read more details about the procedures following a serious accident on our Guide to Driving in Mexico. If you are not properly insured in Mexico and become involved in a serious accident—even if it's not your fault—these procedures will likely place a great deal of stress and financial burden upon you.
This guide explains how insurance works in Mexico and how to go about buying the additional insurance protection you need to ensure that you, your passengers, and your vehicle are properly insured when driving on Mexican soil and that, in the event of a serious accident, you are properly covered by a legally-valid and adequate insurance policy.
Mexican Law stipulates that only insurance companies which are licensed in Mexico can provide the type of auto insurance coverage that is recognized and accepted by Mexico's legal system.
A few U.S.-based insurance companies will extend physical damage coverage on cars and RVs while they are situated in Mexico, but they cannot and do not provide Mexican liability insurance. So, although these policies may cover your damage, they will not cover your liability to others in Mexico. This is why a special insurance policy is absolutely necessary to be properly insured in Mexico.
Mexican Law also stipulates that liability insurance must be purchased from a licensed Mexican company, so your auto insurance policy necessarily needs to be issued by one of Mexico's insurance companies, or through a broker in the U.S./Canada working in conjuction with a Mexican insurance company.
Who's Insuring You?
Buyers purchasing insurance for their car in Mexico are often times misled by believing that they can rely on the broker, rather than the Mexican Insurance Company, to properly handle any claim that may arise during their stay in Mexico.
As all insurance policies are sold through brokers, it's important to know which insurance company (or companies) are underwriting the policies being sold to you by the broker.
With the recent turmoil in financial markets, it is more important than ever to purchase Mexico car insurance from a financially-strong insurer. No matter how reputable or well-intentioned an agent or insurance broker may be, if they place your insurance with a troubled insurer you could experience some unpleasant surprises in the event you make a claim.
There exists over fifty insurance companies in Mexico. As is the case with insurance companies world-wide, it is fair to say that some are in good shape, and some are in poorer shape.
Protect yourself and your investment by asking the broker "who underwrites your policies?", and make sure that the insurance companies being used to underwrite your policy have a strong, stable, track record.
Choosing an Insurance Broker
When you choose a broker, choose one that is properly licensed, and one that has the customer service infrastructure needed to properly take care of your claim and needs while you're away in Mexico. However, it is the Mexican Insurance Company that ultimately pays any claim arising from your journey.
Some U.S. insurers have purchased an ownership-interest in Mexican Insurance Companies in recent times; however, these companies operate quite independently of the U.S. parents.
Ask your insurance broker about the size and financial strength of the Mexican insurance companies they work with because in the event of further economic turbulence and/or the devaluation of the Mexican peso, combined with a few natural disasters or other unforeseen events, how will the insurer underwriting your policy cope?
AM Best is a U.S.-based ratings agency that provides an annual rating for Mexican insurance companies. Not all Mexican insurance companies are rated by AM Best and of those that are, few have a "A or better" rating; defining the company's risk profile as "Good or Excellent".
Mexperience's associate company, which offers auto insurance for Mexico, only works with companies that have an "A or better" AMB rating.
Some Mexican insurance companies do have a U.S.-rating, but the rating may be average or below average. Again, these insurers may sell lower-priced policies into the market, but those buying them do carry (knowingly or unknowingly) a higher risk in the event a claim is made.
The world's top insurers are well-represented in Mexico, and these offer a range of products for domestic car users (people with Mexican-plated cars) as well as those crossing the border with foreign-plated cars and other vehicles.
Like the U.S., insurance companies come in different types and sizes and many of them are rated by U.S.-based finance-rating agencies. These ratings indicate the integrity and solidity of the insurer: that is, the company underwriting any claims which may be brought against it when people buying insurance policies make a claim.
Regardless of who you buy from, you should check that your auto insurance policy includes these vitally-important elements:
Financially-Sound Insurance Company
Make sure that the insurance company underwriting your policy is financially-sound. Policies from lesser insurance companies may cost less, but that lower premium translates into a de facto higher-risk for the policy holders. Don't just shop around for the cheapest policy— consider who's insuring you.
Fully Licensed Broker, Good Infrastructure
As all insurance policies are sold through brokers, ensure that the broker you engage with is fully licensed and that they offer full transparency of the policies they offer. You should be able to check online the "small print" of any policy BEFORE you are asked to buy.
Good infrastructure means that the broker has excellent customer services facilities, makes good use of technology so that you can purchase your policy efficiently, and that the policy offers help and support services when you are in Mexico, in addition to the insurance coverage.
Cover for Personal Liability, Legal Counsel and Bail-Bond
When you're in Mexico, your auto insurance policy must cover your personal liability, as well as your legal counsel and provide a "bail bond" element. As you'll read in our Guide to Driving in Mexico, if you are involved in a serious accident where the police are involved, you WILL be detained and detained until blame is assessed. If this process is protracted, the bail-bond may get you released pending inquiries.
Local Support, When You Need it Most
Your broker and their insurance company should provide local support services in Mexico so that in the event of a claim, you are able to call for help, be attended by an English-speaking service agents who will be able to handle your call efficiently and dispatch the help and support you need. In Mexico, this is most often an Insurance Assessor, see our Guide to Driving in Mexico for more details about this.
Your policy documentation should be absolutely clear about the procedure you need to undertake in the event of an accident and any subsequent claims. Here is a summary of the most important points, which are relevant to most Mexican auto insurance policies:
Make the Claim in Mexico
Some people wait until they get back to the U.S.A or Canada before making a claim, especially if it's for something relatively minor, body-work or a hit-and-run incident in a parking lot. It is very important to note that most insurance policies require you to make a claim while you are in Mexico and most will not process your claim if you wait until you return home, except under the most exceptional of circumstances.
Calling the Insurance Company's Help Line
The first call you make should be to the insurance company's Help Line. In addition to registering your claim, they will be able to dispatch an Insurance Assessor to the scene of the accident, as well as make arrangements for lawyers or other services to be put in place for you, in the event of a more serious accident.
Paperwork and Reimbursement
You may be asked to produce a police report as well as other relevant documentation as part of the claim procedure. In some cases, for example, for immediate repairs to get your vehicle back on the road, you may need to pay these out-of-pocket and get reimbursed when you return home. Your insurance policy will be specific about what to do in these circumstances. In all cases, remember that you should lodge your claim in Mexico; don't wait until you get back home.
Mexperience is pleased to offer our readers and members an opportunity to purchase competitively-priced Mexico Car Insurance online, in association with IIG Inc., a leading U.S.-based insurance broker.
When you buy using IIG, you get:
- Competitively-priced car insurance policies
- Policies backed only by "A or better" rated Mexican insurance companies
- Policies issued by a fully-licensed U.S. Insurance Broker
- Policies that include a comprehensive suite of coverage services including personal liability, legal counsel and bail-bond
- First-class customer service and claims after-care facilities
- Full transparency about policy types and wording before you buy
- The peace of mind knowing that you are engaging with an experienced broker that sells over 100,000 Mexico auto insurance policies every year
In just a few minutes, you can get a quote, review your policy details, and arrange insurance for your car in Mexico