Driving into Mexico? You’ll need south-of-the-border car insurance

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¿Vas a México? Necesitarás seguro de auto del otro lado de la frontera

Taking a leisurely road trip to Mexico for many Americans is an exhilarating experience. But as with any other vacation, it pays to plan well in order to protect your financial interests once in Mexico.

Mexican car insurance

car insurancethat most Americans have isn’t valid in Mexico. For your travels south of the border, you will need a car insurance policy specifically underwritten to cover liability and losses in Mexico. If for any reason you’re stopped by Mexican authorities and produce a U.S. insurance card, the officer will likely view it as invalid, leading to possible arrest, says Linda Gorman, public affairs director for AAA Arizona.

Further, Gorman says, under Mexican law, if you’re involved in an accident with another vehicle, both parties are presumed guilty and taken to jail. Fault is determined later. If you caused the accident and don’t have a Mexican auto insurance policy, you could be jailed until you prove you can pay for damages.

That’s why it’s “very important” to get Mexican automobile insurance, she says. It’s cheap, easy to obtain and can even be bought online. In addition to AAA affiliates across the nation, there are plenty of other sources selling Mexican car insurance, including your own insurance company. And not unlike flight insurance, which can be bought at kiosks at airports before a flight, Mexican car insurance can be purchased along the route as you approach the Mexico border.

Word to the wise: Buy the best

As with any insurance product, it pays to shop around, Gorman says. You can easily pay too much for it, and you want to be sure you understand the coverage. Mexican car insurance has improved much in recent years and now resembles U.S. policies. Just a few years ago, for example, coverage for vandalism or theft wasn’t even offered, and deductibles for other forms of coverage were as much as 10 percent of the vehicle’s value. Today, deductibles are fixed and cost much less.

The cost of the insurance is determined by the number of days you’ll be traveling within Mexico. While costs vary considerably, good policies can be purchased for not much more than a few dollars a day, Gorman says. But be sure to find an insurer with top financial strength ratings.

“There are still unrated policies out there,” Gorman says, especially those available for purchase just before crossing the border — not the best way to go! Instead, do some research and buy from a known, trusted company that is rated. “If you wait until the last minute and buy one across the border, you may be taking your chances,” she says.

If your car breaks down and needs a tow in Mexico, the expense likely won’t be covered by an auto club plan, such as AAA, or through your insurer if your policy has towing coverage. But roadside assistance and towing are frequently included in Mexican auto policies.

Crashing in Mexico

If you are involved in an accident while traveling in Mexico, Gorman says one bright spot is that technology has made claims processing much easier. Toll-free telephone numbers, e-mail and laptop computers carried by Mexican claims adjusters all help to make claims processing more seamless now than in years past.

Factors such as how badly your car is damaged and the Mexican car insurance policy you purchased will determine whether your car is repaired in Mexico or brought back to the U.S. If the accident was severe enough to cause physical injuries, your car may be impounded for some time.

That’s why AAA Arizona recommends that travelers rent cars when traveling to Mexico rather than using their own vehicles. “If something happens — you get pulled over or you get an accident — it’s traumatic enough,” Gorman says, and worrying about what happens to your car exacerbates the unfortunate event.

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Don’t forget your papers

Aside from car insurance considerations, American drivers to Mexico should also be armed with proper identification documents. Fears of terrorism have made crossing land borders — whether to Mexico or to Canada –more complicated than in years past. Starting in 2009, Americans could no longer simply present state-issued driver’s licenses to customs officials and go on their merry way.

Today, proof of citizenship, whether it’s a passport, passport card or enhanced driver’s license, is required to cross the border and reenter the United States. Unlike traditional driver’s licenses, enhanced driver’s licenses show not only identity but also proof of citizenship. Five states currently issue them: Michigan, Minnesota, New York, Vermont and Washington.

Enhanced driver’s licenses and passport cards permit Americans to travel by land and sea between the U.S. and Canada, Mexico and some countries in the Caribbean. Neither is valid for international air travel. Fees vary depending on document type but range in cost from about $20 for a passport card (if you currently possess a passport) to $120 for both the card and a traditional passport for first-time applicants. Expect to pay more if you need to expedite processing.

Michelle Megna

Contributor

 

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Michelle, the former editorial director, insurance, at QuinStreet, is a writer, editor and expert on car insurance and personal finance. Prior to joining QuinStreet, she reported and edited articles on technology, lifestyle, education and government for magazines, websites and major newspapers, including the New York Daily News.