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Why You Need Mexican Auto Insurance

Jason Metz

If you're planning to drive in Mexico, you're likely going to need Mexican auto insurance to meet a "proof of financial responsibility" law. Mexican law requires all vehicles to have auto insurance, according to the U.S. State Department. Mexico considers auto accidents both a civil matter and a criminal offense. If you don't have the right auto insurance, you could face steep fines and jail time.

Do I need special insurance to drive in Mexico?

Unless your U.S. policy will cover your Mexico trip, you need special insurance to drive in Mexico. Mexican auto insurance is available from companies that specialize in it. Generally, you can purchase a policy to fit your length of stay, whether it's one day, one week, months or more.

Buying Mexican auto insurance at the border can be more expensive than buying it ahead of time. If you decide to buy auto insurance at the border, be sure to understand your coverage options before you get there. It's a good idea to plan ahead and compare quotes from several different companies offering Mexico auto insurance.

What does Mexican insurance cover?

Mexican insurance covers your liability if you cause an accident. In Mexico, you are required by law to have "proof of financial responsibility." Usually, buying liability car insurance is the best way to meet the financial responsibility law. Liability insurance covers:

  • Bodily injury: Injuries to others, including medical bills and legal fees if you're sued.
  • Property damage: Repairs to property you damage, such as other cars and fences.

Mexico liability auto insurance works differently than U.S. insurance. Rather than paying for bodily injury per person and per accident, a Mexican liability limit is a lump sum. Each Mexican state can set both a criminal and civil liability amount if a driver causes an accident that results in a death. Mexican law allows this amount to be the state's minimum wage multiplied by 5,000, plus funeral expenses, per person. The Mexican state can then multiply that figure up to five times (or in some states a judge determines the amount).

For example, in Tijuana, the border minimum wage is 176.76 Mexican pesos. 176.76 x 5,000 = $883,800 pesos. This amounts to $46,296 in U.S. dollars, based on a $19.09 exchange rate. The state could then multiply this figure by five, which would amount to $231,480 per person.

Because Mexican law allows for high levels of compensation, consider buying at least $500,000 USD of liability insurance. You may want to consider an even higher amount depending on which Mexican states you're visiting. Baja Bound Mexican Insurance Services, an insurance agency, has a chart with Mexican liability limits per state.

How much is auto insurance in Mexico?

The cost of auto insurance in Mexico will vary based on your travel dates. The cost of a one-week trip in February 2019 was about $164 based on EverQuote's research.

You can buy Mexican auto insurance to match the length of your trip. Below are examples of the cost to buy Mexican car insurance for one week versus six months.

Company 1 week in February 2019 6-month policy
ABA Seguros $156.11 $428.51
GNP Seguros $167.51 $464.94
El Aguila $167.05 $516.25
Average $163.56 $469.90
Methodology: We examined quotes for Mexican car insurance for a 2017 Honda Accord with $500,000 in liability, comprehensive and collision coverage, gap coverage, travel assistance, and legal assistance. Rates will vary based on travel dates.

Does my U.S. auto insurance cover me in Mexico?

A U.S. auto insurance policy has limited or no coverage once you cross the border. You may be able to buy a "limited Mexico coverage endorsement" from your U.S. car insurance company.

If you have "limited Mexico coverage," the coverage types in your U.S. policy can extend into Mexico on a limited basis, such as within 25 miles of the U.S. border and a trip of 10 days or less. So if you have liability, collision insurance, comprehensive insurance, medical payments and uninsured motorist coverage, all could apply in Mexico within a miles and time limit.

Some U.S. auto insurance policies exclude coverage in Mexico, meaning any accidents in Mexico will not be covered by the U.S. policy.

Check your policy for specifics, or ask your auto insurance agent to explain your coverage.

Tips for driving in Mexico

It's a good idea to familiarize yourself with local traffic customs before your trip. For example, one-way signs are often found on the side of buildings rather than by the curb. Here are some tips for driving in Mexico.

  • Get a temporary vehicle importation permit (TIP) if you're taking your car outside the border zone. This area generally extends 12 to 16 miles along the northern and southern border, as well as the Baja peninsula and a portion of Sonora. If you drive beyond the border zone without a TIP, your vehicle could be confiscated and you could be taken to jail. This is also known as the free trade zone, hassle free zone, perimeter zone, liberated zone and zona libre.
  • Mexican car rental insurance is necessary if you take a rental car across the border. You may be able to buy Mexican auto insurance at the rental car agency. Certain types of rental cars, such as exotic cars or cargo vans, may not be allowed to travel outside of the U.S.
  • Stay up to date on travel advisories. The U.S. Department of State provides advisories on certain risks, such as increased crime. It also provides information such as entry and exit requirements, vaccination recommendations, and embassy and consulate locations.

Mexican auto insurance FAQ

Does AAA offer Mexican insurance?

Yes, AAA sells Mexican insurance. You can visit an AAA office to buy it, or purchase and print a policy online. Visit AAA.com for information.

Does Progressive cover me in Mexico?

No, Progressive Insurance policies don't extend into Mexico. But you can buy Mexican auto insurance through Progressive from MexPro, a broker for Mexican auto insurance.