When comparing the US vs Mexican Insurance, there are many differences. If you are a tourist venturing into Mexico in your tourist vehicle, understand these facts. Do not let the ease of that border crossing fool you. The differences between U.S. and Mexican Insurance is not as simple as it may seem.
Once you cross the U.S./Mexico border, you are officially on foreign soil. That means you are subject to the laws of the Mexican government. This includes regulations involving parking, speed limits, and other traffic issues. The following article should help you understand the differences.
Mexican vs US Insurance: In Mexico, US insurance is not recognized
There is an agreement between Canada and the US governments that recognize each other’s insurance companies and protections. Mexico and the Mexican Companies are not part of any agreement. As such, the only way to have insurance coverage in Mexico is through a domiciled Mexican company. Domiciled Mexican Companies include Qualitas
, Chubb, Mapfre, General, HDI, etc.
There are some aggressive companies that market to the border and Hispanic population certain coverages in Mexico. But, what is this coverage that they offer? Progressive Insurance, for example, offers Medical Payments and Theft/Collision within 20 miles of the border. They DO NOT, however, offer liability. If you cause an accident in Mexico with Progressive then yes, they will cover damage to your car, but you will go to jail until damage to the other person (3rd party) is resolved. This is why it is imperative that you carry AT LEAST 3rd party liability coverage from a Mexican Insurance Company
The US vs Mexican Insurance: Regulation
In the U.S., insurance prices are tightly controlled, and they are regulated as State Levels. Each of the 50 states in the United States has a Department of Insurance, with its own elected commissioner. Mexico, on the other hand, regulates insurance at the federal level. Some Mexican auto insurance is very good, comparable to, or even superior to, what you have back home. Some policies are poorer in quality, and others are downright terrible.
The best way to tell the difference is to do your homework. A trip to Mexico, at least in your car, should not be a spur of the moment decision. If you have time to plan your adventure, you have time to research Mexican auto insurance.
Another significant difference between U.S. and Mexican Car Insurance is the fault assessment and assignment as it relates to claims.
In the U.S. each state has different rules related to minimum coverage and at-fault regulations. Michigan, for example, is a no-fault state. So regardless of fault, your insurance policy covers damage to your car.
In Mexico – all of Mexico is no-fault.
So, essentially “uninsured motorist” coverage does not exist. If you have a complete coverage Mexican car insurance policy, the collision risk will pay for damages to your vehicle, regardless of fault. Buyer beware of any brokerage or agency attempting to up-sell you on this coverage in Mexico
The US vs. Mexican Insurance: Rating and Premiums
In the United States, insurance companies have a massive database and they know EVERYTHING about you. The calculation takes into account your years of driving experience. They give discounts for where you live, where you park the car at night. They give discounts if you are a professional, and they know your driving history.
In Mexico, it is quite opposite. Mexico knows nothing about you – they rate the car itself. How much is the car worth? How much will it cost to replace? Where in Mexico will the car be? These are the questions that factor in the price in Mexico.
As such, because there is not a personal rating factor – the terms are more rigid. As an example, daily policies cannot cancel after they start. The same strict guideline applies to annual and semi-annual policies, you cannot cancel after 34 days. Pro-rating that exist in the United States, does not exist in Mexico. If you sell your car 6 months into a 1-year policy – you transfer the policy to the new owner but there is no discount or refund.
The good news is American drivers can add liability coverage when they purchase their auto insurance policies, either at the Mexican border or ahead of time. If the agent selling you the policy does not mention liability coverage, be sure to ask about it. You do not want to drive on foreign soil without having sufficient liability coverage in place.
Make sure you purchase quality Mexican Auto Insurance no matter what kind of coverage you carry in the United States/Canada. At the minimum purchase a Liability Only
When comparing the US vs Mexican Insurance, there are many differences. If you are a tourist venturing into Mexico in your tourist vehicle, understand these facts