Why Doesn’t American Car Insurance Work in Mexico?

You might be someone who travels between the United States and Mexico frequently. Or, you might only cross into the country a couple of times per year or less, maybe as part of travel to an annual family reunion. Either way, once you cross the international border, you must have car insurance. And, this must be a Mexican car insurance policy when you are south of the border. There’s a reason why American car insurance won’t continue to cover you, and there’s a reason why you must buy Mexican car insurance. Here’s why.

Mexican Insurance Law

Mexico and the United States, despite their close ties, are separate countries. Besides the differences in language and cultural traditions, there are also vast differences in law. Mexican law is sometimes called civil law, and is based on both ancient Greek and Roman legal systems, as well as the Napoleonic code. The U.S. legal system is based on “common law” or the derived legal system from the time America was an English colony.

The similarities are often very hard to explain unless you are a lawyer, however, they are deep despite being small. Therefore, differences in insurance law are prevalent. One of the laws that often impacts Mexican insurance law is that, in Mexico, when a crime is committed, the suspect is considered guilty until proven innocent. In the U.S. the opposite is true. Since insurance law has a lot of rules based around a driver’s fault in an accident, then this different legal precedent can impact the claims process.

As a result, Mexican insurance law doesn’t recognize American insurance policies in many cases. That includes the fact that it doesn’t recognize American car insurance.

Mexican Insurance Requirements

However, just because Mexican law doesn’t recognize American car insurance, that doesn’t mean that American drivers (tourist and commercial) can drive uninsured. The law also requires all drivers to carry car insurance. Therefore, upon the time you enter Mexico, you must have this policy active.

The good news is that your policy can remain active for the duration of your stay in Mexico, and you can even keep it active when you come back to the states. This policy does not replace your American car insurance. You’ll have to keep that active. Still, if you keep your Mexican car insurance policy active, then you can cross the border a number of times, without having to buy a new policy each time you drive.

The Coverage Within Your Policy

There are both similarities and differences between Mexican car insurance and American car insurance. There will likely be quite a few differences in policy terms, but also Mexican policies can contain a few unique types of coverage.

• Policies will contain liability coverage, with which you can pay others with, if an accident is your fault. However, these policies will also contain legal assistance coverage. If the authorities detain you for the accident, this coverage can help you pay for bail, counsel and related costs.

• Coverage usually includes physical damage insurance. However, it may not provide different limits for collision damage, and damage from hazards other than collisions.

• Many policies offer U.S. repair coverage, which allows qualifying drivers to have their car transported back to the States for repairs.

• Many policies also offer additional coverage, like medical payments coverage and roadside assistance.

All Mexican policies come from Mexican insurance companies, and you can work with your agent to determine the limits, terms and deductibles that are the most-comprehensive for you.