What Is The Difference Between U.S. And Mexican Car Insurance?

July 8, 2010 by
Categories: Auto Insurance, Mexico, Tips

From European Travel News

Everyone knows that the United States and Mexico have different legal systems, and because of these differences they also have different car insurance policies. I will try to outline some of the differences by type of insurance. Make sure that you don’t make the mistake of imagining that this is a complete list because there are just way too many minor differences to list.

First of all, let’s talk about Liability Insurance. Civil Law, as defined by statute, determines liability coverage in Mexico. This can be really good or really bad depending on your point of view. Because of this system there is almost never a claim made for pain and suffering or emotional distress. The great majority of claims are paid under “Property Damage to Others” and “Bodily Injury,” these losses are settled on an actual cash value (acv) basis, and are dictated by law.

It is generally assumed (and assumed correctly) that Mexico does not have as many court cases and attorneys as the United States. Indeed it is uncommon to have a claim in excess of $100,000. Sometimes, with a very expensive car, Property Damage to Others claims will get near this limit, but it is not at all common to have a Bodily Injury claim that comes close to the $100,000 number.

Now what I am about to say may seem obvious to some, but not to others: Liability insurance purchased from a Mexican Insurer will not cover any law suits against you in the United States, it will only cover law suits brought against you in Mexico. Therefore, if you are sued, in the United States, for an accident that occurred in Mexico, there will be no coverage under your Mexican policy.

The Second thing that I want to address is car insurance, because there can be quite a big difference in the various rates, coverages, limits, and deductibles that the various Mexican Insurance companies offer. Let’s take a look at some of the things that you should pay attention to. First of all, you will want a combined single limit coverage, as opposed to a split limit, because some insurance companies will reduce the amount payable with the use of split limits. The standard used on a Mexican car policy is a combined single limit of one hundred thousand dollars. I encourage you to stay away from split limits. Another coverage to take very seriously because it is very important is Legal Aid and Travel Assistance. Sometimes these are listed as as additional coverages, but they are not they are essential, and without both of these coverages you will be paying your own legal expenses until liability is determined.

Lastly, a Mexican car policy excludes both Vandalism and Partial Theft. In the United States policies are generally “all risk” policies, but Mexican policies are “named perils” policies. These policies provide coverage for collision, fire, total theft, some natural occurrences, and other perils. In the United States we are used to a fixed deductible, but Mexican car polices will often have a deductible as a percentage of the value of the car insured.

You can purchase an "all risk" policy for an additional charge through Mexpro.com. Click here to view our MexVisit Mexican car insurance travel assistance supplement.