Another New Mexico Insurance Law | 2014

For another consecutive year, Mexico is implementing a major change to its insurance law.

In 2013 we saw a huge change in Mexican insurance law. Financial responsibility has always governed the insurance landscape in Mexico, but in a let's drag you jail and sort this out kind of way. Responsibility was determined by local authorities and the guilty party became responsible. A bit different than what we see in the US, moreover the way that Mexico determined how injured parties would be compensated, was well--screwy and lacking.

But in 2013 that all changed and Mexico modernized their liability law. In the event of a Death, depending on the state (and the exchange rate) you can be responsible for more than $300,000 in damages. Still not a US-style get you for all your worth kind of way, but certainly a shift in the landscape.

Mexico, however, has done it again and continues to modernize their insurance law, and with good reason. As of September 23, 2014 all vehicles 2011 and newer on federal highways, roads, and bridges must have a minimum level of insurance of 100,000 pesos, roughly $7,700 depending on the exchange rate. Pretty minimal, but it's a step in the right direction. Each year more and more vehicles will be subject to this law, until Mexico reaches its goal of requiring 100% of vehicles on the road to have insurance. The schedule is below.

2014 2011 Model Year and Newer
2015 2008 Model Year and Newer
2016 2005 Model Year and Newer
2017 2002 Model Year and Newer
2018 2000 Model Year and Newer
2019 All Vehicles

Of course with any law there are other factors and considerations that we won't get into here. Economics/Human Psychology tells us that to change behavior there has to be some sort of driver or motivator. So what it is? It's a fine, the failure to not carry insurance is a fine that can range between $100 and $200. Not huge, but higher than the average cost of a Mexico tourist auto policy.

So are tourists subject to these laws? Yes, they are, and all Mexico Insurance policies sold by Mexpro comply with this new law. In fact, you will see there is new verbiage on the declarations page in Spanish that helps the authorities understand that. While we at Mexpro believe there are greater reasons to buy insurance than the threat of a $100-$200 fine, we are pleased to see Mexico taking steps to modernize their insurance law. If you don't agree with us, consider this, currently only 27% of drivers in Mexico carry liability insurance—just 27%! In the US roughly 85% of vehicles are insured. Check out the numbers below for comparison sake and see how Mexico compares to some of its Latin American peers.

Latin American Country Insurance Stats

So, if you have an accident in Mexico and you do not have Mexican Insurance, there is a 73% chance you will have to pay for damages out of pocket. Pretty disturbing.