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Insurance Coverage Differences between the US and Mexico

One of the biggest mistakes one can make is assuming that a Mexican auto insurance policy provides the same coverage, and works in the same manner as a US policy. This is not the case, as each insurance policy is built to address the legal obligations required by the laws of a given country, and the purchasing habits of its populous. And therefore, many similarities exist between Mexican and US auto insurance policies, but there are also many differences.

The following are some important differences, exceptions and quirks found in Mexican tourist auto policies:

  1. Due to a change to Mexico Liability Law it is now required to carry high Death Liability limits depending on each State specific requirement of where the loss occurs). All customers can purchase up to $500,000 Combined Single Limit. It is now highly recommended that you use the same level of care regarding Mexico liability limits that you would use when purchasing a US or Canadian auto liability policy. The radical change to Mexico Liability law means that claims for Death Liability in Mexico will now be similar to the damages that are often imposed by courts in the US and Canada in similar cases.

  2. If two Americans have an accident in Mexico and wish to file a suit in the US, a Mexican auto insurance policy will not respond to a liability suit brought to the US. It will only respond in Mexico.

  3. Liability for bodily injury sustained by a third party (passengers) in the insured's vehicle is not covered. Example: There is no coverage if passengers of the same vehicle sue each other. However, no-fault medical payments coverage for passengers is provided.

    NOTE: Motorcycle insurance policies do not provide medical payments coverage for any driver or passenger.

  4. Damage caused by flooding due to the action of tides is not covered. Other flooding is covered.

  5. Damage caused by a person without a valid driver's license or under the influence of alcohol or drugs is not covered.

  6. Damage sustained while participating in speed trials or races is not covered.

  7. Loss or damage to under-parts of the insured vehicle as a result of overloading or rough roads is not covered.

  8. Pilferage or partial theft of parts and/or accessories is not covered. Theft coverage is provided only if the entire vehicle is stolen. Vandalism is also excluded. However, these coverage options can be purchased via an extended endorsement.

  9. Trailers or boats that are towed must be listed on the policy in order to be covered. If the trailers or boats are not listed, there is no coverage for either the unlisted trailers and/or boats, NOR the towing vehicle, even if listed.

  10. Coverage for physical damage is not included unless it is purchased and specifically described in the policy. If physical damage coverage is purchased, the form covers collision, overturn, fire, natural phenomenon, glass and total theft.

  11. If you return to the US without an adjuster's report, coverage is void.

  12. All 6-month and annual policies are fully earned 15 days after the effective date of the policy. Daily polices are not eligible for refunds or cancellations after the effective date of the policy. Six month and annual policies allow for refunds and/or cancellations up to 15 days after effective date at a pro-rated daily rate. Pro-rates will be based on the actual cost of a 1 to 15 day policy. A cancellation fee equal to half of the Policy Fee will be retained on all cancellations. Note: Six month and annual polices carry high discount rates; daily policy amounts exceed 6-month rates after an average of 27 days. Daily policies are not eligible for refunds or cancellations after the effective date of the policy.

While some of these may be surprising, these are a result of Mexican Law and the nature of Mexican auto insurance policies. Mexpro.com takes care to ensure that as things change in the market, we are able to provide the best coverage possible to our clients. We monitor any changes with these exclusions and quirks.

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Written By , Chief Revenue Officer

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