The purpose of this article is to provide information for folks living in México. Much of it will also be useful to temporary visitors, and there is a section at the end especially for rental cars.
Mexican automobile insurance and the way accidents are processed are bit different from what you are probably accustomed to, so I have put together this little primer on the subject. Traffic laws and accident procedures are a local matter and may not always be the same everywhere. Nevertheless, the following information is likely to be true in most of Mexico.
Automobile liability insurance is not required by every state in México, but there is a growing trend to require it because it is quite common for drivers not to have any coverage. México State, México DF begin requiring liability insurance in 2007. Soon thereafter the states of Chihuahua and Jalisco passed similar laws. There may be others by now.
A gringo would be crazy not to have it for reasons that will become clear in a minute. Your home country liability insurance is not valid in México, you must purchase insurance that is authorized by the Mexican government -- authorized but not guaranteed by the government. You must do your own homework to be sure what you are buying is what you need and that the company is honest. (Just like back home.)
Regular Mexican insurance is not available to foreign plated cars. Because my pickup is registered and plated in the USA, I have a “tourist” policy which requires that I have an address in the USA. I use my sister’s address. (Not all companies require an out-of-country address.)
have my pickup insured for full value less $500 with $50,000 liability
and $15,000 medical. (All US
dollars) The liability and medical are standard amounts. Because
Mexican law does not allow damages for “pain and suffering” and
related things, there is no need for huge dollar amounts for liability. But it is very important that the policy cover legal expenses
and bail bonds.
The reasons for having insurance are the same in México as back in the old country, but the way accidents are investigated and responsibility assigned are very different. And there in lies the rub.
When you have an accident, there are three possible scenarios that may follow.
1. Hit and Run: My Mexican friends have told me repeatedly the rule for dealing with accidents where you are at fault: If your car will still run, run away. If there is an injury, run faster. I have seen this with my own eyes, including when I got rear-ended, and the hitter sped away before I could get out of my truck.
Obviously this is both morally and legally unacceptable. It is also likely to be futile for a gringo in a foreign plated car -- you are too easy to trace. When you get caught, you'll be in big trouble with the police, and your insurance company will drop you. Not a good option.
2. Private Settlement: If it is a simple fender bender with no injuries and no cops around, the usual procedure is for the two parties to settle the matter on the spot with the hitter paying an agreed upon cash settlement. The disadvantage to this arrangement is that you may not be able to get your insurance company to fix your car, but that out-of-pocket is probably less than the deductible anyway. The advantage is the cops are not involved. Twice I have clipped a guy's fender while parking. Both times we settled up for 200 pesos with no hard feelings or hassles with the police.
3. Police and Insurance: Now comes the time when the police are involved. If the police see the accident, or if there is major damage, or if there is an injury, the police will be needed.
As soon as possible (like first thing!), call your insurance emergency 800 number so that an adjuster can be dispatched to the scene as quickly as possible. The fact that you have insurance, even with the policy in hand, will mean nothing to the police. Only the adjuster can invoke the benefits of your policy. Until he gets there, you are, effectively, uninsured. If you have not bought the legal and bail bond rider for your policy, the adjuster cannot keep you from being arrested if the police decide they want to do that -- they probably will if there is an injury or major damage.
If you are uninsured, or if your adjuster does not arrive on the scene before the police complete their on-scene investigation, you and, perhaps, your passengers will be "detained" at police headquarters until the matters of fault and financial agreements can be worked out.
You should clearly understand that you will be detained until the police are satisfied that they know who is a fault; and if that is you, you'll be hanging around until the other party is satisfied with the financial arrangements and says it is OK for the police to let you go. Strange, but that's the way it works. Or until your insurance adjuster gets there to bail you out.
In some cities, the at-fault driver is not held until financials are done, instead the vehicle is impounded. That is the rule in my city. But you really shouldn't count on it if you are uninsured.
It is a widely held belief that the gringo is always at fault. I don't know if that is always true, so I'll leave up to my insurance company to fight it out if I ever have that need. In my two fender benders, there was no doubt that I was at fault. :-(
It is likely that the adjuster who comes to your aid is not an employee of the insurance company, rather he is probably an on-call contractor. As such he will need proof from you that you do indeed have the insurance you claim. Some insist on seeing the original policy, not a copy. But leaving the original of your policy in the car is a bad idea because, if the car is stolen, you will need that original. Talk to your agent and follow his advice on carrying the original or a copy.
If alcohol is involved, your insurance will not save your ass. DUI
will cause you very major problems, and your insurance will be
When you are moving to México, you may want to buy short-term trip insurance prior to crossing the border to cover you for the few days you're on the road to your new home town, and then find a local insurance agent for long-term coverage.
Although any insurance company can send an adjuster to the accident scene, it's helpful, sometimes vital, to have an insurance agent close at hand to help with the follow-up. I use AXA, despite knowing that I could get much cheaper insurance, because the agent is a personal friend who will make sure I am well cared for if I ever have a problem. Personally, I would not feel comfortable with a company that did not have a local representative to hold my hand if I get into trouble.
If you expect to be traveling around the country, as most of us want to do, you should be sure the insurance company you do business with has a network of claim adjusters that can quickly respond to your needs anywhere in the country. Be sure to discuss this before you sign up.
almost all Mexican insurance policies, the theft coverage will be listed
as "total theft." Don't be misled, that
"total" means you have coverage only when the total car
is stolen and not recovered. If only part of the car is stolen,
say the wheels, you are not covered. If the car is stolen and
striped with only the chassis recovered, you will not get any
compensation. Some companies offer a rider for partial theft.
IMPORTANT: Most companies require that you provide the ORIGINAL
title, import permit and insurance policy in the case of a theft.
Do not keep these important papers in your car.
Always read the policy before you pay!
Article 106 spells out who may drive your car, but your insurance probably will impose other restrictions. Be sure you understand these in detail. If a non-listed person is driving your car, you may not be covered in case of an accident. What's allowed under Article 106 has no bearing on what is allowed by your insurance company. I have a file folder full of sad stories from people who did not understand their insurance company's requirements.
Here are some things to watch out for that may be included by some sneaky companies:
If you buy an annual policy, be sure that it actually covers you for the full year in Mexico. I saw a policy that was good for 365 days but in the fine print it said there could be only 30 days of actual exposure in Mexico.
If you don’t plan to keep your US (or other) registration current (I don’t), be sure the policy doesn’t require it. Most don't, but there are some that do require valid foreign registration. Some even require foreign insurance. Be sure to ask before you buy.
It is important to understand that the policy is governed by the Spanish version of the policy. The English version is non-binding on the company. It is not unheard of for the English translation to omit important details. For example, it has recent come to my attention that one popular company requires that your car have current registration and insurance in your home country, but that requirement is spelled out only in the Spanish edition of the policy.
Be sure that the policy does not require that you actually reside outside of Mexico for some period of time each year.
Two of these companies are marked as requiring current foreign registration, they are the ones I know that require it. Pease don't assume that the others do not. Inquire before you buy. Ask to see it in the written Spanish policy -- remember verbal promises are not binding.
Lewis & Lewis
Oscar Padilla Mexican Insurance Services, Inc http://www.mexicaninsurance.com/
Seguros del Centro, a subsidiary of GE
ON-LINE INFORMATION, OFF-LINE ORDERING
Insurance Agency represents Grupo Nacional Provincial http://www.mexicanautoins.com/
Xavier México Insurance (Current foreign
OFFICE SERVICE ONLY
AXA (formerly ING
Comercial America) (Current foreign registration NOT required.)
There are very few companies that will insure motorcycles in México. Insurance is available only for foreign plated motorcycles. There is no insurance available for bikes with Mexican plates -- odd, but true.
http://www.cyclemex.com/ This website contains a lot of useful information about the ins and outs of motorcycle coverage.
http://www.sancarlosmexico.com/insure.html This company also offers coverage for RVs
is now (2009) offering motorcycle insurance.
Insurance coverage offered by rental companies in México is typically expensive, often costing more than the car rental. It is, therefore, tempting to find a way to avoid these high costs. Some credit card companies will provide collision coverage for rental cars in México. By law, they cannot provide liability coverage; that must be purchased from a Mexican company or from the car rental company. There is an excellent discussion of Mexican rental car coverage here.
You should understand one very important provision of all credit card plans: If there is any damage to the rental car, your card will be charged for what the rental agent thinks is enough to cover the repair. Then you will be reimbursed some time later by your credit card company, if you have followed all the rules. Think carefully about that before you depend on the credit card. It can be a nightmare if you have an accident, even if it is not your fault. México has different rules than NoB.
American Express has a premium insurance program available for a small fee. They also offer a free program for selected cards. Both programs have a variety of restrictions, including the requirement that the user be a resident of the USA. VISA and MC do not seem to have this restriction.
A voice of experience:
A cyber friend writes "I rented a few years ago from Avis in a resort city, After telling the representative I would use my gold master card to rent the car and forgo the extra insurance, he agreed only after he had me sign a damage waiver. He did not explain what would happen if I were in an accident.
I have a friend who owns a rental car company near Puerto Vallarta. I asked him to explain what would happen if every line of fine print on the back of the contract is not followed.
He explained that if you damage a car, you have to pay for it on the spot. The rental agency will charge your card, perhaps leaving you with a maxed out card.
When you get home, you will apply for reimbursed from the credit card company. You must furnish them with a police report. If the report says you were not on pavement your claim will be denied.
He told me one story about a couple of tourists who parked their rental in a dirt parking lot of a restaurant. A large truck cut across the parking lot crushing the right rear corner of the car. The credit card company refused to pay because they were not on pavement."