Why Mexico Insurance ?
Do I Need Mexico Car Insurance?
When it comes to Mexico car insurance there are a number of misconceptions regarding its importance. Many believe that "no insurance" means you will get a slap on the wrist, pay a $20 fine to a police officer, and then be on your way—because it is Mexico.
Unfortunately this is not the case. There are many important reasons to be sure you are properly covered in Mexico, but here are the most important.
1. Mexico Insurance Is Required
Despite what many people think, Mexico car insurance is required. In the US each state has "state minimum limits" and people without insurance face fines and confiscation of vehicle (depending on the state).
Mexico is instituting similar laws. In fact, several notable states enacted these laws. It is expected that additional states will follow suit. However, even in the states that don't have these types of laws, there is a de facto requirement of insurance that exists in all of Mexico, and that is financial responsibility.
In the US when there is an accident, insurance information is exchanged, and we go on our way. In Mexico, things are slightly different, and an accident means facing a local judge who determines fault.
2. Your US Policy Does Not Cover You in Mexico
Some people believe they will be covered by their US auto insurance policy. This belief is flawed in a couple ways.
First, by Mexican law, liability insurance in Mexico must be provided by an admitted Mexican insurance company (this means the insurance company has been registered with the Mexican Department of Insurance). No US insurance carriers have this designation. Some RV insurance carriers do provide a Mexico Physical Damage endorsement, but this only covers damage to RVs and Travel Trailers.
In addition, Mexican authorities likely won't even recognize names like State Farm, Allstate, Geico or Progressive. In the same way, US policemen, lawyers and judges don't recognize Mexico insurer names like ABA Seguros, Grupo Nacional Provincial or El Aguila.
When you look at a US auto policy you will usually see language that is similar to the following:
The policy territory is:
The United State of America, its territories or possessions;
Puerto Rico; or