Although many visitors to Mexico arrive by airplane, more and more US and Canadian visitors are traveling to Mexico in their own personal vehicles.Automobile insurance fraud is one of the most prevalent forms of fraud, and it doesn't just stop at the U.S.-Mexico border. Instead, fraud continues to present challenges to insurers who write personal lines policies for foreign drivers in Mexico.
Car rental agencies in mexico usually provide auto insurance, but the required coverage is minimal. When renting a car mexico, consider purchasing insurance coverage that is at least equivalent to that which you carry at home. In general, your U.S. auto insurance does not cover you abroad. However, your policy may apply when you drive to countries neighboring the United States. Check with your insurer to see if your policy covers you in Canada, Mexico, or countries south of Mexico. Even if your policy is valid in one of these countries, it may not meet that country’s minimum requirements. For instance, in most of Canada, you must carry at least $200,000 in liability insurance, and Mexico requires that, if vehicles do not carry theft, third party liability, and comprehensive insurance, the owner must post a bond that could be as high as 50% of the value of the vehicle. If you are under-insured for a country, auto insurance can usually be purchased on either side of the border.
Always purchase Mexican Auto Insurance From a well known MEXICAN auto insurance company prior to entering Mexico. US and Canadian insurance is not recognized by Mexican authorities, and the consequences for driving uninsured can be severe. If you are in an accident or other vehicle-related problem while driving without Mexican insurance, it is highly likely that your vehicle would be permanently confiscated and you could be detained by the police. The laws are slowly changing, but it is a sometimes a CRIME to have a wreck. You could (probably) be thrown in jail!!!!
If you are renting a car in Mexico (which we recommend), The same rules apply, except purchase the insurance through the rental company. Buy full complete coverage!! We recommend only using the large well known rental companies that also operate in the USA or Canada. That way when you get back home you might have some sort of legal action you can take against them, if you need to do so.
A little known fact is that most US auto insurance will pay damages to others, just like in the USA. The problem is that the Mexican Government does not recognize USA auto insurance. Thus, you could go to jail! Canada insurance does not extend into Mexico.
To drive in Mexico, the minimum required insurance coverage is Civil Liability Insurance. This coverage protects you in the event you cause bodily injury or property damage to third parties. Be careful, there are all kinds of tricks used by insurance companies by using split limits that could leave you holding the bag.
Even if you are not concerned about protecting your own vehicle with Full Coverage Insurance, you must at a minimum always purchase Mexican Liability Auto Insurance to cover any damages you may cause to third parties. Legal Service is also an important aspect of Mexican auto insurance that you should not go without.
Basically there are three other types of coverage that you should have. Your rental company can give you the details at the time of rental.
LDW (Loss Damage Waiver) This is a protection plan that has the widest and most transparent risk coverage in the domestic market, with the added advantage of a 0% deductible. This coverage protects you against total and partial theft and any type of material damage to the rental car. It is the easiest and most complete protection you will find, restrictions may apply.
ALI ( Additional Liability Insurance) This is an additional protection that extends a cover to the driver of Civil Responsibility up to a limit that you purchase. This coverage protects the driver of the reclamations that third parties make exclusively against the driver of damages in their properties and their integrity caused by the use or handling of the rental car.
PDW (Partial Damage Waiver) With this insurance you will only be responsible for the payment of a deductible amount that you predetermine. It covers damages to the rental vehicle and total lost as a consequence of an accident or robbery, including missing pieces or accessories. Some restrictions may apply.
ALSO: Most policies only apply to the designated driver. If your party will have more than one driver they also must be listed and a fee charged for them to be covered. If this is not done and they have a wreck, they and you are uninsured! It could be jail time!
