Just as car insurance regulations and requirements can vary per state in the U.S., car insurance rules also change when you cross the border. It is important to understand the main differences between American and Mexican car insurance if you plan to drive into Mexico from the U.S. or vice versa.
Car Insurance Requirements
Car insurance is now required in every American state and throughout Mexico. In some areas of Mexico, drivers used to be able to simply carry proof of financial responsibility instead of insurance, which is proof that the driver could pay for damages they caused while operating the vehicle. With recent law changes, however, you must carry auto insurance whenever you drive on a Mexican federal highway.
Auto insurance requirements in America vary per state. Most states require a certain amount of liability insurance, such as:
- $25,000 in bodily injury liability per person
- $50,000 in bodily injury liability per accident
- $25,000 in property damage liability
Depending on the state, personal injury protection and uninsured/underinsured motorist coverage may also be required. This does not mean you need different auto insurance policies for each state, however. So long as you have the state required minimum amount of insurance in one state, your policy’s limits will adjust automatically as you travel across the U.S.
Some U.S. insurance companies offer insurance coverage in Mexico by endorsement. However, the coverage is only for a short distance from the U.S. border (typically 25 miles) and for "infrequent" trips. It is very important to know that Mexico authorities do not recognize "foreign" insurance. So even if you're U.S. carrier says that you're covered, this will only be for your vehicle. Any damage to other people or their property will not be covered and you can go to jail if you are at fault in the accident and will be required to pay for the damages out of your pocket.
For Mexican insurance, if you are watching your budget, we recommend that you carry no less than $150,000 Combined Single Limit (CSL) Liability with the $150,000 Excess Liability in case of death of a third party. However, to be fully protected from potential liability, we recommend that you carry at least $300,000 CSL liability limits for Mexican Auto Insurance.
Coverages Offered
Despite the differences between these two types of policies, American and Mexican car insurance offers a lot of the same coverage, although it may be titled differently.
Your full coverage car insurance policy in America often includes:
- Comprehensive Coverage: Comprehensive coverage provides compensation for damages to the vehicle caused by fire, wind, hail, lightning, smoke, theft, vandalism and other incidents not involving collision.
- Collision Coverage: Collision coverage provides compensation for damages to the vehicle due to collision with another vehicle or object.
- Liability: Liability insurance covers bodily injury and property damage you may cause while operating the insured vehicle.
- Medical Payments Coverage: This coverage compensates for medical expenses for you and your passengers after an accident, no matter who is at fault.
- Uninsured/Underinsured Motorist: This coverage provides compensation for accidents involving uninsured drivers.
To compare, a full coverage Mexican car insurance policy may include:
- Physical Damage: Physical damage covers any damage that may occur to the vehicle due to fire, collision, falling objects, lightning, hail, and more.
- Liability: Liability insurance covers bodily injury and property damage you may cause while operating the insured vehicle.
- Medical Payments: Medical payments coverage provides compensation for medical bills for you and your passengers after an accident.
- Uninsured/Underinsured Motorist: This compensates for accidents involving another driver not carrying insurance.
- Theft and Vandalism
Both policies may offer roadside assistance such as towing as well as legal aid.
The Cost of Car Insurance: America vs. Mexico
American auto insurance prices vary widely depending on several factors, a lot of which are the same that influence Mexican auto insurance.
On average, drivers in America may pay around $1,758 a year for car insurance. This is influenced by:
- Location
- Age and gender of the driver
- Value of the vehicle
- Coverage limits
- Credit score
- Driving record
Mexico car insurance is a little different for visitors. If you are driving to Mexico, you can purchase tourist auto insurance for the length of your trip, from one day up to one year. A Mexican Auto Insurance policy for one day may start at $25, and the premium will increase depending on the value of the vehicle, and coverage needed. If you travel multiple times to Mexico during the year, you might benefit from the special discounts on long-term policies; a Sanborn's agent will help you determine if a long-term policy is the best option for you, and offer special discounts that are not offered online.