Top 5 Car Insurance Tips for Travelling From the US to Mexico By Car

U.S. Mexican Border Aerial View
Getty Images/Mark A Paulda

Travelling from the United States to Mexico by car has its challenges. Knowing what to expect can definitely make the process easier. Safety is very important when travelling out of the country. Things to keep in mind include staying on toll roads because they are not as pothole filled and they have more security than non toll roads. Also, be on the look out for suspicious activity, clearly you do not want to be the victim of any crime and being aware of your surroundings could save your life.

Do not drink and drive no matter how tempting it might be while on vacation. In Mexico, car insurance does not cover a drunk driver. A foreign jail is definitely a scary place to end up while on vacation.

1. Do Not Use Your American Insurance Policy

Liability Coverage

American insurance does not "play nice" with Mexico like it does with Canada. Pretty much any policy sold by a United States based car insurance company will not provide liability coverage once you have crossed the Mexican border. Liability coverage is the very important coverage which pays for damages to others if an accident was your fault. It is Mexican law to carry liability coverage at all times.

Maybe you are thinking you would never cause an accident so you will be fine sticking with an American policy. Not true! Not having the proper valid car insurance at the time of an accident can still leave you empty handed even if you are not at fault.

Mexico requires all drivers to show proof of financial responsibility also known as valid liability car insurance. Caught with no proof whether you are at fault in an accident, not at fault in an accident, or pulled over for any reason could get you into serious trouble with the possibility of a short period of jail time and or a fine.

Physical Damage Coverage (Comprehensive and Collision Coverage)

Some policies, definitely not all policies, extend physical damage coverage when travelling within ten to fifty miles inside the Mexican border. Essentially it means you can go back home and get your vehicle repaired, if the damage is covered.

Mexico will not recognize this coverage at all. If you prefer, you could purchase a supplemental Mexican liability coverage and use your American physical damage coverage, however the savings would be minimal. It is definitely time to speak with a licensed insurance representative to review your policy and verify your coverage.

Does a California or Arizona Insurance Policy Extend to Mexico? - No, not anymore than any other state. It does not matter if your policy is from Maine, New Mexico or California, liability coverage can not extend to Mexico even if its from a neighboring state.

Imagine being in a major accident while in Mexico and not having the proper car insurance coverage. Potentially, you could be held in jail until you can show you can pay for the damages you caused in an at fault accident. Mexican insurance rates are reasonable and many carriers allow you to purchase coverage for a short period of time.

Cancelling a policy once it is active can come with fees or is sometimes not allowed especially if you have filed a claim.

2. Buy Car Insurance Through a Mexican Insurance Carrier

Buying a car insurance policy through a Mexican insurance carrier is not hard. It is a lot like getting a regular policy here in the states, and your current car insurance might even be able to help you. Many United States carriers work directly with Mexican insurance carriers.

Quick Links to Popular Online Mexican Insurance Carriers (alphabetical order)

Have a copy of your declaration page, the page of your car insurance policy that displays your vehicles information and coverage, available to email, fax, or relay over the phone to the Mexican insurance representative.

You will also want to know the dates you are traveling, where you will be traveling, and details on anything you plan on towing.

Will the Claim be Handled in U.S. Dollars or Pesos?

It is going to depend on the insurance carrier you choose. Make sure to ask about how claims are handled. Mexico's repair costs are much lower than the United State's. What happens is if you choose to bring your car back home for repairs for convenience, the repair may not be covered for its full cost due price difference between countries. Certainly, it is something to consider.

Does a Loan on a Car Make a Difference?

Driver's are not allowed to simply enter the country in a vehicle that they do not own. Not owning a vehicle actually includes vehicles with loans. Plan on getting a notarized statement from your lender, vehicle owner if the car you are driving is borrowed, or your lease company if you are under a lease agreement.

3. Select the Appropriate Car Insurance Coverage

Selecting coverage should be easy. Hopefully you currently have the coverage you want on your vehicle. It would only make since to continue with coverage as similar as possible. The idea of increasing coverage for instance, by adding physical damage, is not a bad idea. The risk factors my be higher where you are travelling. Large potholes, poor or no road signs warning you of construction or speed bumps, and increased opportunities for theft and vandalism are all things to consider.

Types of Coverage Offered On a Mexican Insurance Policy

  • Liability: so you are covered at a set limit for damages and injury you cause to others.
  • No Fault Full Coverage: A Mexican car insurance policy will provide coverage if you are hit by an uninsured driver.
  • Medical Coverage: More and more private health insurance companies are excluding car accidents. Medical coverage on car insurance is important for when you are injured in a car accident.
  • Towing: Stranded in a strange place is rough. Having to pay the tow bill is even worse. Get towing so you can reimbursed for the tow and have more money for your vacation.
  • Legal Protection: This could come in handy if you are caught drinking and driving or some other sticky situation.

What About Personal Belonging Stolen From the Vehicle?

Car insurance policies whether they are American or Mexican do not cover personal items stolen out of a vehicle. Your home owner's or renter's insurance would provide coverage for your contents. Most insurance carriers extend coverage out of the country up to a set percentage of your home's actual contents.

4. Have All Your Paperwork Ready When Crossing the Mexican Border

Getting your car insurance in order to cross the Mexican border is only one part of the paperwork you will need in order to cross smoothly. Take a look at what else you will need.

  • Driver's License
  • Passport: Routine passports take 6 weeks, expedited passports 3 weeks, and some can even be issued in as few as 8 days if you are will to go directly to a Passport Services Agency and pay a much higher cost.
  • Car Registration: Notarized paper giving permission to enter Mexico, if you do not own the vehicle out right.
  • Proof of Mexican Car Insurance: Insurance can often be purchased the same day. It is best to make insurance arrangements ahead of time to increase the likelihood you get exactly what you want. Remember United States liability policies do not cover you in Mexico!

 

5. What About a Rental Car?

It is definitely recommended and often required to buy the full coverage option on a rental car. Make sure the car insurance is purchased from a Mexican insurance carrier. Buying at the rental counter is not always an option. Have the rental car agent help you through the process.

Some credit cards offer international insurance coverage on rental cars. Calling each of your credit cards directly is not a bad place to start. Make sure to call and get all the details so you can be sure you are covered properly.

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