Mexico's Insurance Reform: Three Laws that May Affect You

Since early 2013 Mexico has been implementing a number of insurance reforms that affect you. Read the specifics of each law and what they mean to you.

  1. Increased Liability in the event of a Death - How Mexico calculates what is paid in the event that a person causes the death of another person is very different than from the US and Canada. It's actually based on a worker's compensation-like law. In 2013, that law changed, increasing the amounts one is responsible to pay. The bottom line is that depending on the Mexican state, you can be on the hook for more than $300,000 in the event you cause the death of another person. A far cry from what we used to see in Mexico. What does this mean to you? When you buy your Mexico Insurance policy, you need to buy the highest liability limits you can find.

  2. Mandatory Insurance for Federal Highways - As of September 2014, insurance will now be mandatory on all Mexican Federal Highways and bridges. Failure to carry insurance can result in a fine. There are some loopholes for older vehicles or vehicles that are not worth much. However, the bottom line is that insurance is now mandatory in Mexico, as anyone driving just about anywhere will inevitably end up on a federal road. What does this mean to you? You need to buy Mexico Insurance.

  3. Solvency II - Keeping Insurance Companies Accountable - Let's not get bogged down in the details, and start with what you know. Mexico insurance companies have bad rap; for being sketchy, not paying claims or randomly going belly up (a stereotype we at Mexpro have been trying to fight for 20+ years). Part of the major driver was that Mexican insurers were not financially sound. For comparison sake, in the US you will see carriers that are A+ Rated according to A.M. Best. What does that mean? Some third party came in, the insurer had to say this is what I am insuring, this is for how much, this is how much I have in the bank to pay claims (not that simple, but you get the idea). Based on that information, the insurance company gets a grade A+, A, A-, B++ and so on. Most US carriers are A-Rated, as most agents can't sell insurance companies that don't at least have a B++ rating. Not so in Mexico. Most companies didn't have a rating, and so it was possible that they didn't have the money to pay claims, were in over their head, or any number of negative possibilities. Solvency II aims to change that. Every Mexico Insurance company now has to get a rating and meet minimum standards to operate in Mexico. What this means is that by April of 2015 all Mexican insurance carriers will be required to have a rating. What does this mean to you? You can make more informed decisions as a consumer. You wouldn't buy cut rate insurance in the US or Canada, and you can avoid that mistake in Mexico.

Things in Mexico are changing when it comes to insurance. We at Mexpro think they are for the better. For the record, we have liability limits of $500,000, our policies meet the requirements set forth by the Mexican government, and we have LONG felt it important to only represent A-Rated carriers which is why we only work with companies like El Aguila, ABA Seguros, GNP--each have an A rating or are part of an A-Rated Group.