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Mexican auto insurance: What you need to know

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As the Baja real estate market grows at a frenetic pace, the number of Americans driving south of the border is increasing as well. Whether you are driving down to Baja for business or pleasure, it is important to buy auto insurance for your trip across the border. The following Q&A examines some of the most common issues regarding Mexican auto insurance.

My U.S. auto insurance provider covers me 50 miles into Mexico, so why do I need to buy Mexican auto insurance for a short trip across the border? This question addresses one of the most common misconceptions about taking a car into Mexico. Some U.S. insurance companies provide coverage a short distance across the border, but only for physical damage and theft. Liability coverage from U.S. insurance companies is simply not recognized by the authorities in Mexico. If you are found to be at fault in an accident you will have to pay for damages to the other vehicle(s) on the spot. However, having a Mexican auto insurance policy would provide the necessary "proof of financial responsibility" and pay for damages to third parties in this situation.

How are Mexican auto insurance claims settled? The way claims are settled really depends upon the Mexican insurance underwriter you buy the policy from. We recommend buying a policy from an underwriter who settles claims in U.S. dollars and who will allow you to get your car repaired here in the United States. Otherwise you may have to leave your car in Mexico to get repaired, or take a settlement based upon Mexican repair rates, which will only cover a fraction of the cost to get it fixed by your preferred body shop at home.

Do Mexican auto insurance policies provide roadside assistance or legal aid? Once again, the services included are dependent upon who is underwriting the policy. Some underwriters include roadside assistance and legal aid as standard features, while others sell it at an additional cost. Regardless, it is highly recommended to have both included in your policy.

How and where can I buy Mexican auto insurance? The easiest way to buy Mexican auto insurance is online. Coverage is available from one day up to one year and it takes less than 10 minutes to buy and print out a policy. Buying online also allows you to choose a policy with features that best suit your insurance needs.

I take my car to Baja for business purposes; do I need a different type of policy? Yes. It is important to buy a "business use" policy when you are driving in Mexico for work purposes. Some underwriters apply a surcharge, while others sell business use policies for the same rate as a standard "tourist use" policy.

Hill is vice president of business development for Bajabound.com, an online Mexican auto insurance provider based in downtown San Diego.

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