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Commissioners’ Warning on Auto Insurance for Mexico

Many Texans drive into Mexico for business, as well as for shopping and vacations. It's important to understand, however, that Mexico's laws treat auto accidents differently from Texas' laws. A person driving into Mexico needs Mexican auto liability insurance because a regular Texas liability policy will not work in Mexico.

In Mexico, drivers can be held both criminally responsible and financially liable for accidents they cause. If anyone is injured, police may detain the drivers while they sort out who caused the accident.

People who have accidents must either have liability insurance recognized by the Mexican government or prove they have enough money to pay any claims against them.
Mexico does not recognize auto liability policies issued by U.S. or Canadian insurance companies. However, a driver can buy liability coverage from authorized Mexican casualty insurance companies before entering Mexico. These companies also can provide physical damage insurance for the car.

The Texas Department of Insurance has licensed nine Mexican casualty companies to sell auto policies on the Texas side of the border for travelers planning to drive into Mexico. Licensed agents for these companies are available in most Texas border towns.

A driver from Texas also can buy the Mexican insurance needed after crossing the border, but it is risky to drive any distance in Mexico without liability insurance that complies with Mexican law.

It is also important to know and remember that under Mexican law, a person's liability insurance with a Mexican casualty company can be voided if he has an accident while under the influence of alcohol or drugs.

Three different policy add-ons, called endorsements, are available to extend a person's Texas auto policy into Mexico on a very limited basis. Again, it is important to recognize that Mexican authorities will not recognize the liability portion of a Texas policy, even with these endorsements, if the driver has an accident.

The first two endorsements would, however, extend the policy's other protections, such as physical damage coverage for the vehicle, to short trips into Mexico. The endorsements are:

Mexico coverage -- limited. It extends Texas auto policies without any additional premium to infrequent trips of up to 10 days and no more than 25 miles into Mexico. Not all companies offer this free endorsement, so it is a good idea for the driver to consult his agent.

Mexico coverage -- broad. For an additional premium, this endorsement extends Texas auto coverage for an unlimited number of trips and an unlimited length of stay but still within 25 miles of the border.

Mexico tourist coverage -- limited. This endorsement extends Texas liability insurance to cover accidents in Mexico but pays only if the insured has exhausted the benefits of his Mexican auto liability policy and has been sued for damages in a court in the United States. There is no charge for this endorsement. Unlike the other Mexico endorsements, this one provides coverage for trips of any distance or duration. The driver should ask his agent if the company offers this free endorsement.

When driving to Mexico, a Texas driver should be sure to take along his car's title or other proof of ownership, personal identification, such as a driver's license, and proof of citizenship, such as a passport or voter registration card.
Mexican border crossing officials usually do not ask for proof of Mexican liability insurance, but it is a good idea to have it in the glove compartment just in case.

A person driving deeper into Mexico than the free trade zone near the border is required to get a temporary importation permit for the car. Those planning such a trip should consult with officials at the nearest Mexican consulate about his requirement before starting a trip.

Jose Montemayor, former insurance commissioner for the State of Texas.





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