Many clients are unaware of the insurance requirements and limits when it comes to driving their car to Mexico. Some aren’t even aware that their personal American car insurance policy won’t necessarily carry over when they cross the border, so it’s important to advise clients
when it comes to Mexico auto insurance and the hassle-free zone within Mexico.
What is the Hassle-Free Zone in Mexico?
Also known as the Hassle-Free Vehicle Zone or the Perimeter Zone, this area along the border has lesser restrictions and requirements for visitors than the rest of Mexico. This zone generally runs 20 to 26 kilometers along the northern border of Mexico.
Within the hassle-free zone, certain permits and customs requirements are removed. This includes requirements for a temporary import permit, also known as a TIP. A TIP is required for foreign vehicles to drive through Mexico. So if a client wants to drive their vehicle to Mexico, they will need a TIP unless they remain within the hassle-free zone.
Clients should keep in mind that the hassle-free zone only applies to certain customs requirements and permits and does not affect Mexico laws. All Mexico laws must still be followed in the hassle-free zone and offenses can be legally punishable.
Is Car Insurance Required in the Hassle-Free Zone?
The hassle-free zone does not apply to car insurance. While American drivers will not need a TIP in the hassle-free zone, car insurance is still required if they want to drive within this zone and anywhere else in Mexico. Drivers will also still need a valid driver’s license. Mexico does recognize American driver’s licenses, so clients will not have to obtain a Mexico driver’s license in order to operate their vehicle in Mexico.
Most American car insurance policies will not transfer over to Mexico. This is why some insurance providers offer an endorsement for Mexico car insurance. Driving in Mexico without insurance can result in hefty fines. Causing a wreck without insurance can lead to fines and even arrest, depending on the details of the wreck.
In Mexico, all drivers must carry a minimum amount of car insurance in order to drive legally. This includes:
- 50,000 pesos in property damage liability
- 100,000 pesos in personal injury liability
Overall, it’s recommended that drivers carry at least $300,000 in Mexico car insurance coverage.
You may want to advise clients that liability isn’t the only insurance they may want to carry. American comprehensive and collision coverage may not carry over into Mexico. Clients can purchase physical damage coverage in Mexico auto insurance only if they already have comprehensive and collision coverage on their American car insurance policy. These coverages provide compensation for damages to the vehicle due to fire, wind, hail, theft, vandalism, falling objects, explosions and collision with another vehicle or object.
Drivers may also want to purchase medical payments coverage to cover medical expenses for themselves and their passengers in case of an accident.
What is Proof of Financial Responsibility?
When looking into Mexico car insurance, a client may ask about proof of financial responsibility. In certain areas of Mexico outside of the hassle-free zone, drivers could provide proof of financial responsibility instead of Mexico car insurance. This essentially showed that the driver could afford to pay for damages they caused on the road. It is no longer viable in Mexico, however, and all drivers must carry Mexico car insurance when driving in Mexico.
Can Clients Purchase Mexico Car Insurance from Mexico?
Say a client arrives at the Mexico border and realizes that they won’t be allowed in without the proper insurance. Can they then purchase Mexico car insurance? This depends, but it’s unlikely. If they already have an American car insurance policy with a provider that offers Mexico car insurance, they may be able to purchase Mexico car insurance, but they will have to provide substantial proof to the applicable Mexican authorities.
On the other hand, say a client arrives in Mexico by plane and decides they want to drive a rental car. It is unlikely they will be able to receive coverage from their American insurer for a Mexican rental car.
Drivers can purchase car insurance and rental vehicles at the Mexico border, but this is generally more expensive and many of these contracts have hidden fees. All contracts are also written in Spanish, so any driver looking to purchase a Mexico car insurance policy or rent a vehicle should be fluent in Spanish or bring someone who is.
Also Read: Offering Mexico Auto Insurance to Clients