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Auto insurance

12 January 2014

Foreigners are always warned that to drive in Mexico they MUST carry auto insurance.  While that is mandatory for those bringing a foreign registered auto into the country, those of us who live here (and own Mexican registered autos) would be insane not to… the person held to be at fault in an accident must pay the damages, and if unable to do so, can be jailed.  And, of course, as foreigners with no ties to the local community, they be considered a flight risk, and bail would not be an option.

I’ve been in two accidents (both minor, and neither as the driver) in my time here, and in both cases, the other party had insurance… and the matter was settled on the spot.  The adjusters — not the police — came to the scene and worked it out amongst themselves.  In one accident, the adjuster had a checkwriter in his mobile office,  and cut a check for repairs on the spot.

Apparently, among those who’ve been in auto accidents in Mexico, I’m in a distinct minority.  According to federal estimates, only slightly more than a quarter of Mexican motorists carry insurance.  The rest either assume they’ll have the money to cover any accidents or… well… perhaps that’s why there are so many religious medals hanging from rear-view mirrors.

That should start to change this year when new regulations go into effect requiring insurance on federal highways or face a fine of 40 times the salario minimo (about 200 U.S. Dollars).  While probably impossible to enforce the regulation, Enrique Mendoza, an analyst with with Grupo Financiero Interacciones SAB, expects that about half of Mexican motorists will become insured.  More, if — as expected — states also requiring mandatory coverage.  Baja California does so now, with Sinaloa and Jalisco expected to follow shortly.

Source:  Jonathan Levin, “Qualitas Aided by Pena Nieto Car Insurance Law: Corporate Mexico”. Bloomberg News, 7 January 2014

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