Driving is one way to vacation with the freedom to explore the south of the border as you wish, but before leaving you should make sure you have the right auto insurance for travel to Mexico.
Using Current Auto Insurance
Most people are accustomed to being required to carry auto insurance. They have at least the minimum amount of liability insurance required by their state or province, and assume that the insurance follows them anywhere they take the car. This, however, is not the case. Mexican authorities do not recognize policies issued by companies outside of Mexico, and American and Canadian insurance policies do not extend liability coverage within Mexico.
Some American companies do provide comprehensive coverage in Mexico, so you may have some protection if your car is damaged or stolen. This coverage is usually limited to events that occur within a certain distance from the border, sometimes as little as 10 miles. Check with your insurance company before traveling so that you know all the restrictions ahead of time.
Required Auto Insurance for Travel to Mexico
Mexican law requires that all vehicles be covered by liability insurance, although there is no minimum amount of liability coverage required. Even if the vehicle is registered in the United States or Canada, you must purchase liability insurance from a Mexican insurance company prior to entering Mexico in order to be in compliance.
Liability coverage can be purchased as either combined single limit or split limit. Combined single limit coverage provides for a maximum amount that will be paid in the event of an accident. For instance, with a $100,000 limit, up to that amount will be paid in total regardless of whether it is for property damage or for injuries. This is the most flexible type of coverage.
Split limit coverage lists a specific amount of coverage for property damage and a separate amount for injuries, including a specified limit per-person involved. This will normally be written as three numbers. For example, 40/80/40 coverage would provide $40,000 for property damage and $80,000 for personal injury, with a limit of $40,000 per person.
Although split limit coverage is less expensive, there are drawbacks. With the example policy shown, if you have an accident with $50,000 in property damage and no injuries, the policy will still only pay $40,000. Even though the total coverage for an accident is $120,000, only the amount listed for property damage would be paid.
Driving Without Insurance in Mexico
Having an auto accident in the United States and not being able to prove you have insurance you will normally result in a citation. You will have an opportunity to later prove that you actually have coverage; if not, you may be fined or have your license and tags suspended. This is not the case in Mexico.
In Mexico, driving without auto insurance is a crime. If you are involved in an accident and the investigating officer determines that you are at fault, the repercussions can be serious. Even if it is a minor fender-bender, if you cannot prove that you have a Mexican liability policy in force, you may be taken into custody and your car might be impounded. You may be required to post bond before being released, and you will have to pay for damages to the property or other vehicle involved before your car will be returned.
Because of the unique requirements for auto insurance for travel to Mexico, most companies offer not only traditional six and twelve month policies, but also special tourist policies that can be purchased by the day. Although a simple third-party liability policy is the only legal requirement, there are other issues that you should consider:
- If you have full coverage, will you be allowed to have your vehicle repaired after you return home or will you have to have it repaired in Mexico? If you can take the car home, will the policy pay for labor at US or Canadian labor rates, or only at Mexican labor rates?
- Does the policy cover medical evacuation or plane tickets to return home? Policies can be purchased that will pay for you to be returned home by ambulance or even air ambulance if you are seriously injured or ill, even if it is not a result of an auto accident. You may also be able to add coverage that would pay for plane tickets home if your car is stolen or isn't drivable.
- Does the policy provide legal services? This should include bail, attorney fees and court costs.
Like any insurance policy, it's important to do your research before buying a tourist policy. With a little planning, driving in Mexico can be part of a relaxing vacation.