Any car in any community could sustain damage from any number of hazards. These hazards aren’t just wrecks; they could be things like vehicle fires, hail, vandalism or theft. Even when you are far away from home, car insurance can help you cover the costs of these losses. Still, if you travel to Mexico on a trip, then it is not an American policy that will help you. You will have to buy physical damage insurance as provided by Mexican auto insurance.
Mexico has its own set of insurance laws and financial regulations. As a result, Americans traveling into Mexico must buy a Mexican car insurance policy. It’s up to you to ensure you have the appropriate protection, including coverage for physical damage, before you start your journey.
Mexican Car Insurance Laws
Because both Mexico and the United States have their own legal systems, they use different methods to determine fault in car wrecks. Car insurance issued for stateside driving will not apply appropriately to a driver’s liabilities while on Mexican roads. Therefore, Americans who drive in Mexico will have no coverage from their American car insurance.
However, Mexico requires all drivers, foreign drivers included, to carry auto insurance. Therefore, you’ll need to buy a Mexican car insurance policy before you cross into Mexico. You must also keep it active for the duration of your trip south of the border.
By law, you must carry liability coverage. You will have to buy this coverage from an insurance carrier licensed in Mexico. Most American auto insurers do not offer these policy options. This is the coverage that will help you compensate others when you have an accident that is your fault. You might use your policy to pay another driver you hit for their vehicle repairs or injury costs. You will be able to take responsibility for your actions behind the wheel.
Yet, if you only carry liability insurance, then you won’t have coverage for your own vehicle damage. To get that coverage, you will likely need to buy physical damage insurance. This is separate protection from liability insurance. Still, it will provide you with considerable help if you ever have to pay to have your own car repaired.
What is Physical Damage Insurance
When buying your Mexican car insurance, see if you can buy physical damage insurance. Because this is optional coverage in Mexico, you will have to ask your insurance agent to add this protection to your policy.
Physical damage insurance is similar to the collision and comprehensive insurance that you might carry on your American auto policy. However, your Mexican policy will not cover collision & comprehensive damage separately. Instead, it will insure your vehicle’s damage under one set of terms. With coverage, you can often receive payment for damage from various hazards, including:
- Wrecks, rollovers and other collisions
- Vehicle fires
- Severe weather
This policy can pay for your own vehicle damage regardless of whether an accident was your fault or someone else’s. So, suppose that you accidentally rear-end another car while driving in Mexico. Both cars sustain damage and will both need repairs.
Under your liability coverage, your policy can pay for the damage done to the other driver’s vehicle. Your physical damage insurance will then kick in to pay for your own car’s repairs. Your insurer will appraise the damage and settle with you for the cost of the repairs. If you total the car, then your insurer will work with you to settle the value of the vehicle.
Keep in mind, however, that a deductible will apply to the costs of your damage. You must pay the cost of your deductible before your insurer will cover the remaining damage costs. If any damage cost falls below the cost of the deductible, then your insurance will not pay the cost of your repairs.
Other Coverage for Physical Damage
The physical damage insurance on your Mexican auto insurance can prove very adequate. However, you still might need extra coverage to cut your risk of financial hardships following wrecks. For example:
- Unlike American insurance policies, some Mexican policies will not automatically cover partial theft or vehicle vandalism damage. However, you might be able to add this coverage to your policy through an endorsement.
- Many insurers offer an option to add uninsured motorist coverage to your policy. This coverage pays if another driver is at fault for a wreck, but they lack liability insurance. They therefore won’t be able to compensate you for your losses. Your own coverage will have to step in.
- Policies can include a U.S. repair option. This coverage will help Americans transport their vehicles back to the States to have repairs.
- Drivers can choose a travel expenses endorsement to help them cover the costs of returning home following a trip interruption.
Don’t forget, you can often add roadside assistance coverage to your policy, too. That way, if you have an inconvenient breakdown on the road, then you only need to call your insurer. They can dispatch a service provider to help you fix your problem and get on your way.
Also Read: Physical Damage Protection on Mexican Car Insurance