Does Your Car Insurance Cover You While You Are in Mexico?

Last night, while having dinner with some friends and reminiscing of yesteryear when driving into Mexico was relatively safe, a question arose.  Would your car insurance company cover a loss into Nuevo Laredo, Mexico?  Keeping in mind that Nuevo Laredo is the neighboring city to Laredo, TX, many Laredoans think that coverage could be found in a Texas auto insurance policy but the simple answer is, it depends.  In the past, and perhaps even today, some insurance companies used an endorsement onto the existing Texas auto policy that provided limited coverage.  The limitations were based on three basic circumstances.  The vehicle made “infrequent” trips into Mexico not exceeding a 25mile radius of the Texas-Mexico border and the trip did not exceed 10 consecutive days.  The problem with the policy language is it is ambiguous.  The “infrequent” part is left up to anyone’s interpretation.  To the average Laredoan, driving into Mexico four times per month is not considered frequent but to someone living in North Texas it may be.  To prevent ambiguity, some insurance companies began defining “frequency” by using a fixed limit on the number of days driven into Mexico per month.  What would the process look like after a accident occurs in Nuevo Laredo?  After a claim has been submitted, a claims adjuster needs to determine if coverage exists.  Assuming that the damages were only to the car not to anyone else’s property and insurance company decides to cover the loss, the next question is, how are you going to bring the car into the United States?  Many insurance companies won’t allow there adjusters to travel into Mexico.  Having to figure out how to bring your car back home is a big inconvenience to say the least.  Whether coverage exists against physical damage to the vehicle, a much bigger concern is liability.  What if you are the one at fault in a car crash in Mexico?  In Mexico, you are guilty until proven innocent.  So if you cause bodily injury or property damage, you may be held in custody until you pay for the damages.  What a nightmare!  Although the claims process is rather quick for most insurance companies, there is protocol.  The insurance company must first investigate if there is coverage and may need to speak with the other driver involved in the accident.  All the while, unless you were able to make payment of the damages, you’d be waiting in lockup hoping that coverage exists!  What if this happened on Thanksgiving and the adjuster will call you first thing on Monday morning?  Thus, needless to say, if you ever drive into Mexico DO NOT RELY on the Texas auto policy to cover a loss.  It would be to your best interest to purchase a Mexico auto policy.



Insurance Blogger

Fred Gonzalez is the principal agent at AlphaSure Affordable Insurance Services in Laredo, TX. He has been licensed to sell and service insurance in Texas since 2001.
AlphaSure Affordable Insurance Svcs 201 W Del Mar Blvd Suite 20 Laredo, TX 78041 (956) 729-9500