U.S. and Canadian auto insurance policies are not recognized in Mexico; only policies from a Mexican insurance company are. Each Mexican state sets potential civil and criminal liability amounts a driver would be responsible for in case of a fatality or fatalities to others. The liability amount may be as high as U.S. $300,000 per fatality or more depending upon the state you are traveling in. Read more about the law.
A Mexican Insurance policy greatly reduces the financial burden you might come by after an accident and may reduce jail time.
Under Mexican law, motorists are required to have insurance, or "proof of financial responsibility", in the event of an accident, even if you are not at fault. As a foreigner traveling in Mexico, the only way of demonstrating this financial responsibility is to have sufficient real currency to cover damages, or an insurance policy from a Mexican company. U.S. or
any other non-Mexican insurance does not cover your liability for potential accidents, nor does it fulfill the basic requirement for insurance according to Mexican law. Get a Quote
Will my U.S. or Canadian insurance cover me in Mexico?
Regardless of what your U.S. or Canadian insurance company may tell you, their policies are not considered "proof of financial responsibility" under Mexican law. While a few major U.S. insurance companies cover damages to your vehicle in Mexico up to a small distance south of the border (usually no more than 25 miles), they do not cover damages to other parties. This is why any U.S. policy must be accompanied by at least a liability-only policy from a Mexican insurance company.
What exactly does Mexican Insurance cover?
In addition to liability and legal assistance coverage, you have the option to add collision and theft coverage and partial theft and vandalism. Most policies also offer roadside assistance. View our description of coverage for HDI Seguros or ACE Seguros to see what is covered by our policies. You may also like to read our FAQs about Mexican Insurance. Get a Quote
What does "liability" mean and what does it cover?
Liability is an obligation to pay money to parties other than yourself or occupants of your vehicle. The liability component of the insurance covers damages which you might cause to other vehicles or property in an accident. It also covers costs for bodily injuries which you might cause to other parties. Get a Quote
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Source: Baja Bound Insurnce