Why You Need Rental Car Insurance In Mexico
Did you know that there is no coverage through Manitoba Public Insurance or Autopac for any claim pertaining to a vehicle or person in Mexico?
There is no coverage:
- If you take your Manitoba vehicle to Mexico, coverage will not apply once your vehicle crosses the border to Mexico.
- If you rent a vehicle while on a trip to Mexico.
- If you use a friend’s or relative’s or someone else’s vehicle – if the vehicle is at any time in Mexico
- If you are a passenger involved in an accident while in Mexico.
Renting a vehicle in Mexico
Most vehicle rental companies in Mexico DO NOT PROVIDE any insurance coverage with the rental car. In most cases, they will offer insurance coverage as an optional coverage, however, you need to understand what coverage you are getting and what you would be responsible for if you have an at-fault accident.
Physical damage to the actual vehicle rented may be provided by your credit card company, however, we recommend getting written confirmation from your credit card company that the coverage provided will still apply if you rent a vehicle in Mexico. Some credit card companies do not provide coverage in Mexico.
If your credit card does cover the rental vehicle in Mexico, it will still only provide coverage for damage to the vehicle you rented and DOES NOT PROVIDE any liability coverage.
At a minimum, you would need to purchase liability coverage. This may be available from a rental car company, however, ask what the limit of liability is as this is very important. Another option is to purchase a temporary insurance policy.
Renting a car in Canada or the USA and taking it to Mexico
Most rental car companies DO NOT ALLOW you to take a rented vehicle to Mexico. You should check and get written permission from the rental car company if you intend to take the vehicle to Mexico.
If you purchased rental car insurance through Autopac, the amount of the premium is based on where you rented the vehicle from (ie. Manitoba, Canada or USA), however, this policy DOES NOT COVER the vehicle in Mexico.
There is no coverage for the rental vehicle, so you would need to purchase a temporary policy for coverage in Mexico.
Driving a Manitoba plated and insured vehicle in Mexico
In order to bring a vehicle into Mexico and drive anywhere other than the free zone, you will need to purchase a Temporary Import Permit (TIP). There is a fee for this permit along with providing a guarantee, but it does not provide any insurance, just permission to bring the vehicle into Mexico. You are also required to have a security deposit which will be returned once the vehicle has left Mexico. This fee and security deposit do not provide any insurance whatsoever.
There is no coverage for your Manitoba licensed vehicle through Autopac, so you would need to purchase a temporary policy for coverage in Mexico.
Mexico law requires that all people driving any vehicle there carry Automobile Liability Insurance Coverage.
If you do not have automobile liability insurance and are involved in an accident, you will go to jail and your vehicle will be impounded – that is the law in Mexico.
How much liability coverage is enough?
Liability damages imposed on an at-fault driver who causes a negligent fatality in Mexico are capped, but the cap is based on 500 days multiplied by the local Mexican minimum wage (for January 1, 2020 that is 123.22 pesos per day). So 500 days times 123.22 pesos = 61,610 pesos (about $4,500 Canadian dollars). If there is an accident with multiple fatalities, this amount would apply per fatality.
While there is a limit on how much you can be responsible if there is a fatality, THERE IS NO LIMIT on how much you can be charged for any other types of damages.
- Vehicle – Damage to your vehicle that you were driving (whether it is your own foreign vehicle, someone else’s foreign vehicle, a Mexican vehicle, or a rental vehicle).
- Other Parties Vehicle – Damage to the vehicle or vehicles that you caused due to the accident is based on the cost to repair it or the total actual cash value of the other vehicle.
- Lost Wages and Medical Expense – You will be charged for the lost wages and medical expenses for the other driver and occupants of their vehicle.
- Moral Damages – Awards for pain and suffering are less common, as it requires filing a lawsuit in the Mexican court system. The costs typically don’t justify the potential rewards.
- Other Damages – Mexican courts can award extra damages if they feel it is justified by the circumstances – for example, driving while intoxicated or some other contributing factor.
How to get insurance for Mexico?
You can purchase this from a Mexican insurance broker and it would be underwritten by a Mexican insurance company. There are a number of online quoting sites that provide quotes. In most cases, I have found that these sites seem to offer liability ONLY.
I am providing a recommendation that you may find useful based on my review of coverage offered on their website. However, I want to point out that I have not done any vetting nor have actually read their policy wordings, so it would be up to you to make any final decision. I’m providing this link to their website so you can get a quick quote online