Despite widespread belief to the contrary, having insurance for your automobile is mandatory under Mexican law. As of January 2019, Mexico instituted a new regulation requiring all vehicles driving on federal highways to have, at minimum, third party liability insurance coverage. An accident means facing a local judge who determines fault.
Although many are under the impression that Mexican Auto Insurance is not necessary, this is an incorrect (and potentially dangerous) assumption.
Get Mexican Car Insurance to Stay Legal
Under Mexico’s laws, auto liability insurance must be provided by a verified (i.e. registered under the Mexican Department of Insurance) Mexican insurance company – there are no US insurance providers in the US that meet this requirement. (The one caveat is for RV insurance – as some RV insurers provide ‘Mexico Physical Damage’ endorsements).
Mexican regulatory authorities most likely would not recognize names such as Allstate, Geico, or Progressive (similar to how those in the US don’t recognize Mexican auto insurers such as El Aguila, ABA Seguros, or Grupo Nacional Provincial).
When you take a closer look at your US auto policy, you will probably see the following covered policy regions:
- The United State of America, its territories and possessions;
- Puerto Rico
This explicitly states that anywhere outside of the US, Canada, and Puerto Rico are not under your auto policy. US policies specifically exclude coverage for anywhere outside of the US, Puerto Rico, or Canada.
Sometimes, polices have an addendum that covers driving in Mexico.
“Auto Accidents in Mexico are subject to the Laws of Mexico, not the laws of the United States. Under Mexican Law, automobile accidents are considered a criminal offense – as well as a Civil matter. The coverage we offer you under this endorsement does not meet Mexican Auto insurance requirements; you are legally obligated to purchase liability insurance through a licensed Mexican insurance provider for this to apply.”
Most of the time, this endorsement limits coverage outside the US border to 25 miles – meaning that a few hundred feet could be the difference between coverage and no coverage.
Stay Out of Jail With a Mexican Auto Insurance Policy
Whoever is responsible for causing an accident in Mexico will be held until they pay. In many instances, this could mean spending time in a Mexican jail cell.
The takeaway here is that failing to purchase Mexican car insurance can equate to a huge fine, or at the worst – a jail sentence. Perhaps this reality is why Mexican Auto Insurance is the ‘get out of jail free card’ by frequenters to the country.