MEXICO AUTOMOBILE INSURANCE BUYING TIPS
By: Thad C Curtis When traveling to Mexico by ANY motor vehicle you are required to have liability insurance from a Mexican insurance company. Coverage for fire, theft and collision is not required, but is highly recommended and is purchased by most tourists. The state of Arizona provides a special license for selling Mexican insurance, as do some other states. Buying it in the USA from a properly licensed producer (agent), or broker, means your agent speaks English should there be a problem. Thus, no long distance calls to Mexico in Spanish. In addition, most agencies in the United States carry Error and Omission insurance just in case they do something wrong that causes you to suffer a loss.
The most important thing for you to obtain is liability coverage. I have been selling Mexican insurance since the early 1990’s, and I refuse to offer policies with $20,000.00 and $50,000.00 liability limits. If you are involved in an accident in Mexico, all the damages are added up, including the damage to your vehicle. This could include someone else’s vehicles, some guy’s fence, a city light pole and monetary figures for death and injuries. The judge looks at all the obvious damages and sets a value. If your Mexican policy has a Combined Single Limit (CSL) that matches or exceeds that amount, or a “Split Limits” policy that covers all the losses, you walk if there are no pending traffic or criminal charges. If you do not have enough coverage, you make up the rest. If you can’t post the extra bond, you usually eat tortilla and chili soup until someone does it for you. This is why we recommend nothing less than $100,000.00 CSL, with optional coverage up to $300,000.00. Personally, I buy the $100,000.00 coverage, but you might be well advised to buy more. You could need it!
So, when purchasing a policy from an agent, or when buying online, pay special attention to the amount of liability coverage. Your freedom could depend on it! Don’t buy low liability limit policies and feel everything will be just fine if you are involved in a serious accident in Mexico. Things will not be just fine! You will not return to the United States or Canada until you show you are covered.
Another very important thing is insuring your entire stay. There is no such thing as “an extra day”, unless you aren’t sure what day and time you will cross back across the border. Your policy can start at 0001 hours and end at 0001 the next day, or for example, 11 AM one day and end at 11 AM the next day. You buy 24 hr periods either way, and it is up to you to purchase a policy that starts prior to your entry into Mexico, and ends after you cross back into the United States. This is critical. Pay close attention to the dates and times!
Covering your vehicle for fire, theft and collision is simple. Here’s how to save a buck. Most companies that insure these risks ask for the actual cash value of your vehicle, and they charge more as the value rises. Rates normally increase at each $5,000.00 mark. If you think your vehicle is worth about $21,000.00 it will cost you the same as for a $25,000.00 vehicle. Since the price break was at $20,000.00, even a dollar over places you in the higher bracket. You might reconsider the value, and claim only $20,000.00 value. You would save a buck! Remember, the companies are not obligated to pay based on anything higher than actual cash value. They all seem to be very reasonable in determining that value when a claim is made.
You can buy your Mexico insurance policy by the day as discussed. You can also buy 6 month and annual Mexican insurance policies. If you are going to Mexico for 2 or three days over 6 times a year, you should buy an annual policy. If you live in Canada, or the northern states, you probably go to Mexico for more than 20 days, and you don’t return to Mexico again until the next year. We like to call our 6 month Mexican insurance policy our Canadian Special. It’s nothing more than an annual with about 20% discounted from the “premium portion” of an annual.
Do the math and compare. Depending on the value of your vehicles, usually about “twenty something days” the six month Mexico policy is a better deal than the daily. You can go in and out of Mexico as many times as you want during that period, and you can cross at different ports-of entry.
Many Mexican families living in the United States visit families in Mexico for extended periods, and often the 6 month Mexican insurance policy is cheaper than a daily Mexican insurance policy for the correct number of days.
Then there are families that visit, or might travel for emergencies, throughout the year. An annual policy is the best Mexican insurance policy for anyone who plans to take two or more extended trips that do not fit within a six month period.
Another policy is the “Drivers License Policy”. We sell these, but do NOT recommend them in most cases. See the page on Drivers License Policies for more information, and for specific warnings.
MEXICAN AUTO INSURANCE IS OUR BUSINESS!