Getting car insurance for Mexico can be a confusing and daunting process, especially since there is SO much misinformation and confusion around the actual legal requirements. So to help you navigate the rules, we’ve done the research and used our own experience to help make it easier on you to figure out how to get car insurance for Mexico during your next trip. As of the date of this post, this is the most current information about what you need to know about Mexican car insurance – whether it is for your own car or if you are renting a car in Mexico.
Mexican Third Party Liability Insurance is Required in Mexico
In September 2014, Mexico passed a law that requires Mexico Liability car insurance for all vehicles driving on the main roads. This requirement applies to those who are bringing their own car into Mexico, or travelers who rent a car in Mexico.
** The kicker is that policies for third party liability insurance from outside of Mexico (such as the USA) are NOT accepted in Mexico! This means that you likely cannot use your insurance policy from the States, nor can you use your credit card as insurance (as we’ll discuss later).
We have heard of some travelers “risking it” because they believe that they will only be asked to show proof of their coverage if they are in an accident. But that’s not necessarily true. Technically, the law states that you must have proof with you at all times- that you can be stopped and asked to show proof at anytime.
What is Third Party Mexico Liability Insurance?
Basically, it is additional insurance that covers damages to vehicles (and property) as well as injuries if an accident is considered your fault. Key things to look for in a policy are: physical damage limits, theft / vandalism coverage, medical payment amounts, legal assistance & bail bonding, and the actual liability amounts.
The main issue for travelers when it comes to Mexico Liability Insurance is that it must come from a Mexican company. No outside companies / insurance policies are accepted.
Indemnification in case of at-fault death of third party.
One final thing to be aware of is your liability in the event of an at-fault death. Under Mexican law, you can be held liable for around $300,000 per person. So it’s important to take out enough insurance coverage to cover this limit, in the event of a tragic accident.
What About All Those Other Insurance “Add-On’s” – Aren’t They Third Party Liability Coverage?
When talking about auto insurance, it can quickly get confusing…because there are SO many different kinds (and acronyms!). Some people get confused whether or not third party liability is included with many of those other insurance add-ons that you can buy. Truth is, third party liability is DIFFERENT from these optional “add-ons” below that many insurance companies will sell you.
To help clear up the confusion, here is a quick rundown of the different types of car insurance you may see or be offered to buy (especially when renting a car).
CDW (Collision Damage Waiver)
This optional type of insurance covers the vehicle in case of an accident or damage. Sometimes there is a deductible, it could be a flat rate or a percentage of the vehicles value. You can buy this insurance through the rental car agency, but this is actually what is included in certain travel credit cards (such as our Chase Sapphire) – but it’s not the third party liability for Mexico.
You will need to get proof of this from your credit card company in advance if you want to reject what is offered from a rental car agency. Sometimes they are easy-going, other agencies can be a real pain and they may not accept the proof you show them anyway (such as many car rental agencies in Ireland).
LDW (Loss Damage Waiver)
This type of optional insurance really covers loss or damage to the vehicle for just about any reason. It also covers theft. Again, this type of insurance may also be included with your credit card just like the CDW.
PAI (Personal Accident Insurance)
This insurance covers medical expenses for people in the vehicle if there is an accident. However, if you already have some kind of travel insurance, then you may already have this accident insurance and you don’t need to purchase extra from the car rental company.
The key thing to know is there these insurance options are not the same as the third party liability insurance, which again, is required in Mexico. Many of the above items are optional because you may already have this insurance from your travel credit cards or from your travel insurance.
Common Questions About Car Insurance for Mexico
My car insurance from the USA says I’m covered in Mexico, can I use it?
Car insurance policies from outside of Mexico are NOT recognized in Mexico. So while your auto insurance in the USA may claim that they will cover you if you drive in other countries, the reality is that their coverage may only be good for a short distance (maybe 20 miles) into Mexico, or perhaps only the CDW or LDW would be good. When it comes down to it, Mexico authorities won’t accept it for third party liability.
I have car rental insurance through my AmEx credit card, so can I just use that?
Also, popular credit cards that tout their international car insurance coverage (such as AmEx or even Chase Sapphire) are typically limited to physical damage to the rental vehicle (such as CDW and LDW). They often do not include third party liability coverage. And if they do offer third party liability in other countries, Mexico still won’t accept it.
So again, you can’t technically use your credit card for the insurance (or the proof of insurance), and you could still get fined, or worse if there was actually an accident.
What is the risk and how will they know?
Well, if you are caught without proof of this insurance during a random check, then you could just face a fine upwards of $200 or so. However, if you are involved in an accident and are found to not have proof of this insurance, then it could be around $1000 fine.
The bigger risk is going to jail…immediately!
Another problem that can happen in Mexico in the case of an accident is jail time. In Mexico, it is entirely legal for the police to take you to jail immediately if there is an accident. They may feel this is necessary if you are at fault, or if they need some time to determine who was at fault.
Going to jail in Mexico can really put a damper on your vacation. However, solid Mexican Liability Insurance from a reputable company will assist you in these situations, and pay for your bond out of jail.
How to Buy Mexican Liability Insurance for Your Own Car
If you are bringing your own car to drive in Mexico, as many travelers do from states such as California, then you will need to purchase a Mexican auto policy that provides this specific coverage.
While we have never done this before, we did find a company called Sanborn’s Mexican Auto Insurance. They are a Mexican company, but have offices in both Mexico and the US. In particular, they have offices all along the major border crossings. Again, we have never used them – but they seem like a solid company who also have a lot of good information on this subject, as well as offering the required insurance.
Another consideration if you are purchasing insurance for your own car in Mexico is if you want to have repairs and settlements done in the USA rather than Mexico. Some Mexican companies won’t do this. So it’s good to verify.
Buying Mexico Car Insurance for Rental Cars
For rental cars, you have more options to purchase the required Mexican Liability Insurance. Firstly, all rental car companies are required to offer this insurance in Mexico. So you can easily purchase it from the rental agency. There are also some Mexican auto insurance companies that will offer this coverage specifically for rental cars. However, be sure they give you all the proper paperwork and proof needed.
The main issue for renting a car in Mexico is finding a competitive price for the required Mexico car insurance. Many online rental car websites will entice you with a super low rate, something like $6 per day! Doing this ensures that they pop up to the top of your list when you sort search results by the lowest price.
However, these super low rates rarely ever include the required Mexico car insurance. Reading the fine print, you will often see that the price for the required insurance can be more than double the rental price per day. If you don’t read the fine print and the terms and conditions of your rental agreement carefully, you could be in for a real surprise when you show up at the rental counter and they require you to buy this expensive insurance.
The good news is that there are some online agencies that DO include the required Mexico car insurance in the rental price, but you need to search for them differently (and not only search by absolute lowest price).
For example, on our last trip to Mexico we used America Rental Car. The online price that they quoted included the full coverage third party Mexican Liability Insurance, and the breakdown was much more reasonable than the price I saw at bigger agencies (like Hertz), who also buried the price of this insurance in small print within the massive terms and conditions document.
In the end, we saved a lot of money on our rental and our car insurance for Mexico by carefully researching and making sure we were comparing apples to apples. Read our full post here about renting a car in Mexico and getting liability insurance.
Alternatives to Purchasing Car Rental Insurance from the Car Rental Company
As mentioned, there are some insurance companies in Mexico that offer car rental insurance. This is good to know because you can compare the policy and prices to those of the rental car company. It is quite possible that the rental car companies could even be selling you a high priced policy, that doesn’t even have good coverage.
While we have never tried these companies, the Sanborn Mexican Auto insurance company that we found also offers the option to buy insurance for a rental car in Mexico. From what we see, they offer extensive policies and coverage levels, so they could be a good alternative to getting the insurance direct from the car rental agency. We will definitely need to try them on our next trip!
Don’t Worry – Driving a Car in Mexico is Well Worth It!
Don’t let all this talk about insurance worry you or deter you from driving in Mexico. Driving or renting a car in Mexico is truly a great way to see the country, especially if you are planning a trip to the Yucatan, where there are so many great things to see and do beyond cities like Cancun.
We have rented a car in Mexico gone through this liability insurance research before, so we understand it’s confusing. But we absolutely loved our road trip around the Yucatan and wouldn’t want to do it any other way when we return.