If you're based in the U.S. and you buy auto insurance, it will give you coverage throughout the country, its territories and protectorates, and even if you cross the border into Canada.
But if you cross into Mexico, it's a different story. If you're planning to go south of the border, here are some things you should know about your auto insurance.
Endorsements Don't Cut It
Buying endorsements to your policy can provide limited coverage in Mexico. It's better than nothing, but it's won't give you enough protection.
First, under Mexican law, auto insurance is not considered valid and collectible unless underwritten by an insurer licensed and admitted in Mexico.
If you lack appropriate coverage under Mexican law and are involved in a car accident, you could be incarcerated in the country until the authorities determine fault and compensation. If you are the at-fault party, you could be held in jail even longer.
If your insurer is licensed and admitted in Mexico, there are some limitations that should give you pause:
- Coverage only applies within 25 miles of the Mexican border for a trip of 10 days or less
- The liability coverage only applies if the suit occurs in the United States and the plaintiff is not a Mexican citizen (unless the endorsement is issued in Texas)
- It doesn't provide coverage for repairs made in Mexico unless the car cannot be driven as a result of the accident
- It does not provide coverage if the person driving the car is a Mexican citizen (for an endorsement issued in Texas, the insured must also live in the US)
- It requires you to carry valid and collectible Mexican auto insurance and only provides coverage in excess of the former (unless the endorsement is issued in Texas)
- Lastly, because it is not issued by an admitted Mexican insurer, the endorsement does not satisfy any mandatory insurance requirement in Mexico
Mexican Auto Insurance
Because of the limitations built into endorsements, you will need Mexican auto insurance when you drive to Mexico. If your insurance agent does not offer auto insurance that is valid and collectible in Mexico or if you have purchased your U.S. policy directly from the insurer, you can procure a policy either online or before you cross the border (need an agent? Start by consulting our 5 Questions to Ask Before Choosing an Insurance Agent).
You can purchase just the liability coverage or opt for collision and other types of coverage as well.
There is a lot of flexibility when it comes to the length of your policy. The term can range anywhere from one day to an entire year.
If you plan on visiting Mexico often, consider buying six months or a full year of coverage to secure a substantial reduction in premiums (for more on what influences your premiums, see The Top 5 Factors That Affect Your Auto Insurance Premium).
Tips for Using Your Mexican Auto Insurance
If you're unlucky and find end up in a car accident while in Mexico, contact your insurance company using their Mexican toll-free number. In many cases, the customer service center will have an English-speaking team that can take down the relevant claim information and dispatch an adjuster (learn more about adjusters and other Insurance Industry Careers).
The adjuster can inform the police that you are insured and can arrange for any surety bonds needed to provide support that any claim will be paid. This has the added benefit of keeping you from being imprisoned while the authorities try to determine which party is at fault.
If you're driving on a toll road, keep your toll receipts. If your car gets damaged while you're driving on it, the toll road operator is responsible for the repairs if the damage is due to their negligence. If, for example, they fail to remove obstructions from the road or fill deep potholes, they could be held liable for the damage.
Your auto insurance policy won't cover you while driving to Mexico. But that doesn't mean you should just cancel the road trip and stay home. By purchasing the right insurance policy, you can leave the country without having to worry about running into car-related financial trouble.