Keeping Vehicles Legal While Visiting Mexico
"Why can't I cancel my U.S. insurance coverage, while I'm visiting Mexico?"
Cancelling auto insurance coverage in the U.S., most often, causes a vehicle's registration to be cancelled. Most states have strict laws regarding auto insurance requirements, and nearly all require that at the very least an active auto insurance policy with state mandated minimum liability coverage be in place before someone can legally operate a vehicle on public roads.
Most auto insurance companies routinely share insurance status information electronically, including all policy cancellations, with the Department of Motor Vehicles (DMV) in each state. This is done to keep the DMV in the loop about the vehicle's insurance status so they can also make the appropriate changes to the vehicle's registration status.
Whenever someone lets their auto insurance policy lapse, the DMV is automatically notified, and they in turn begin the process of cancelling the vehicle's registration.
The registration typically gets cancelled because without proper insurance in place, it is usually not legal to operate a vehicle on public thoroughfares.
"What if my vehicle will be inside Mexico for several months, or even a year?"
If you are driving your U.S. plated vehicle into Mexico, you must still abide by the laws of your home state regarding your vehicle's registration and licensing. This requirement stays the same whether you plan to travel to Mexico for a single day, several weeks, or even when the vehicle will be in Mexico for many months.
Your vehicle's registration requirements do not magically change whenever you travel outside the state, or even when you travel to a foreign country. You still must meet the requirements for minimum insurance in your home state in order to maintain a valid vehicle registration.
It is important to remember that any foreign plated vehicle that is driven into Mexico is simply visiting, and thus it is still subject to the laws and regulations of the vehicle's originating country/state, as well as the laws of Mexico. The exception to this rule, would be for those who legally import their vehicles into Mexico, which then allows them to be registered as Mexican vehicles.
Tourists must still abide by the laws of Mexico
It is not legal to operate your vehicle in Mexico without valid vehicle registration in place. It is true that there are some people who simply allow their vehicle's registration to lapse, and then just keep driving around in Mexico with expired tags on their foreign plated vehicle. The huge downside to this, other than it being a very bad situation just waiting to happen, is that when other people see this taking place, they sometimes jump to the completely incorrect assumption that Mexico does not require current tags on foreign plated vehicles. This assumption is categorically incorrect, since Mexico law specifically requires all vehicles to be properly registered. For foreign plated vehicles that are being driven inside Mexico that means they must be properly registered in the vehicle's home country.
Deciding to break the law just because someone else has gotten away with it is always a bad move. Vehicles that are found being driven illegally in Mexico are very often confiscated and impounded by Mexican authorities.
Some other considerations
Vehicle Lender Insurance Requirements
If your vehicle has a lien holder, then you must also consider the requirements that the lender has for insuring the financed vehicle. Lenders are listed on insurance policies as the Loss Payee, and they too, just like the DMV, are automatically notified whenever the insurance policy covering the financed vehicle is cancelled.
The lender has a financial interest in the financed vehicle, and, it should come as no surprise that they require specific coverage be in place in both the home country, as well as in Mexico. If you wish to drive it across the border and are still making payments on your vehicle, it is also important to get a letter of permission from the lender. This allows the vehicle to travel outside it's home country, prior to driving the financed vehicle into Mexico.
Mexico Tourist Auto Insurance Requirements
Mexico Tourist Auto Insurance Policies often have restrictions about how much coverage is available inside Mexico, which is based on how much coverage is normally carried on an auto insurance policy at home. For example, many Mexico Tourist insurance quote/application programs will ask if your current insurance policy includes both Collision and Theft coverage. This question is asked to determine how much coverage may be available in Mexico for the vehicle. If someone is trying to purchase a short-term Mexico Tourist Auto Insurance policy they are often restricted to being able to purchase no more coverage than they normally carry at home. So, if someone only carries liability coverage in their home state, that is very likely all they will be eligible for inside Mexico as well. Cancelling a policy in the home state before driving into Mexico will likely leave someone with a lot less coverage options for a Mexico tourist policy. Additionally, most Mexico Tourist Auto Insurance policies will exclude coverage for any vehicle that has been brought into Mexico illegally, or if the vehicle is not appropriately certified to operate in Mexico.
If you have other questions about the importance of maintaining proper insurance coverage and valid vehicle registration, or if you just need some help with getting a Mexico tourist Auto Insurance policy set up, you can call to speak with a Mexico insurance specialist agent at 888-467-4639.