Is Mexico Insurance (“mexinsurance“) better insurance than what is available in the U.S.? Alternatively, does the U.S. have better Insurance than Mexico? Statistics reveal a worrying trend of Americans taking advantage of Mexico health care system. Is it that Mexico has a better health care system than the U.S.? While this may leave more questions than answers, we explore insurance between the two countries to establish the differences.
What is Insurance?
Insurance is a risk management contract between you (the party) for a particular risk on the one hand. The company covers the risk. It becomes the basis of your insurance policy between you, the insured, and the company.
Every nation must have a body for regulating the insurance industry. In Mexico, the insurance and reinsurance industry is under the State Ministry of the Treasury and Public Credit (SHCP). The federal, national insurance and bonding commission within the ministry licenses and supervises the activities of insurance companies.
In the United States, the industry is regulated by the individual states since the U.S. is a federal government. The states departments enforce regulatory laws through regulations, rules, and laws enacted by their state legislatures. There are no national laws or body that regulates the industry. However, federal laws and courts play a role in the adjudication of insurance matters.
Insurance Cross-Border Coverage
Mexico laws do not allow foreign, unauthorized insurance companies to carry or issue insurance coverage in Mexico. Hence, your United States insurance coverage becomes invalid upon entry into Mexico. There are a couple of exceptions, for example, 21st Century Insurance. They will extend Theft and Collision within 20 miles of the border. However, be careful because most U.S. company’s who offer this limited coverage, are stopping the practice altogether.
When it comes to the United States, this is the opposite. A medical plan from abroad is generally acceptable, especially from insurance companies that also operate in the United States. Even more impressive is Canada and the United States – these two countries have an agreement. U.S. Drivers Licenses are accepted in Canada, as well as U.S. Insurance, and this agreement is reciprocal.
Cost of Insurance
In Mexico, you will find both public, employer-provided, and private health insurance. Mexican Auto Insurance is private. The largest Mexican Health insurance provider is the public health system (Federal Government of Mexico). The Mexican government comprises of social security organizations providing for employed citizens of Mexico. Therefore, a small percentage of the population funds their health insurance from their own pockets. Meanwhile, the working class and the expatriates go for private insurance. Mexico has a public health care system.
In the USA, the public programs that exist are for low-income families or elderly individuals, disabled and non-citizens. Usually, everyone else obtains their health insurance privately, or through their employers. However, insurance companies may require you to co-pay and co-insure. There is no national health insurance plan. These variances between the two countries make health insurance much more affordable in Mexico. Another significant difference is in the USA doctors must carry hefty E&O coverage, which protects them against lawsuits. In Mexico, these types of lawsuits are almost nonexistent, which helps keep costs down.
It is worth noting that insurance policies between the two countries differ significantly, especially where it comes to cost, coverage, and regulations.
These differences are fundamental to insurance firms wishing to operate in either country and act as guidelines. Americans will continue to Mexican hospitals as long as insurance remains out of reach in the U.S.
Now, let’s look at the difference in Auto Insurance between the two countries.
USA Car Insurance vs. Mexico Car Insurance
In the USA insurance companies know EVERYTHING about us. For example:
- Where we work
- How long we work there
- Our educational background
- Background of our parents
- How long we’ve been driving
- How long has it been since we had an accident
- Have we ever had a DUI
- It continues!
In the USA, underwriting is nothing but a mathematical equation.
USA Insurance Key Factors:
- The driver is rated based on education, age, experience, profession, accident history, and vehicle and location
- Cancellation and modifications happen with pro-rate at any time
In Mexico, this is not the case. For the auto insurance policy, only the car value and location matter in Mexico Insurance. Also, they offset their risk by making these policies earn very quickly (30 days and annual policy have no refund). In Mexico, it’s the car that gets insured; in the USA, it’s the driver.
Mexico Insurance Key Differences:
- Rate the car, not the driver
- Rate the location traveling in Mexico
- Quickly earned period (30-34 days) no such thing as “pro-rate.”