Mexican Auto Insurance: Car Rental Agency Scam?

Car Rental.

Comment By Mexico Max: Boy I dont know where to begin. This post seems full of half information and half truths. Right now it costs approximately $30-35 per day for Mexican Auto insurance per day for “Full Coverage” Mexico car rental insurance which may or may not include vandalism.

“I recently returned from a nine-day trip to Cancun, Mexico. Before arriving, I booked a car rental through, accepting a midsize vehicle with Europcar for $9.80 a day. With taxes, my rental was supposed to come to $97. When I arrived in Cancun, the Europcar agent insisted that it was company policy that I take the extra insurance, otherwise he could not rent me the car.”

Read the entire Travel Troubleshooter: Snared by the Mexican insurance scam article here:

Because Theft and Property Damage are the biggest exposures in Mexico, two-thirds of the premium is allocated towards this exposure and approximately one third is allocated towards “Liability Only” which goes for $10-12 dollars per day. Since Mexico practices Napoleonic Law, there are no punitive damages in Mexico. Liability protection is the coverage that keeps you from being detained if you are deemed to have caused damage to any third party. In the US as in Mexico, all car rental agencies ask car insurance companies to provide coverage for their customers and their vehicles. They used to pass their costs directly onto the consumer.

About 15 years ago rental agencies began to add and pocket whatever they could get extra over and above their daily costs for insurance. In other words if the insurer expected $15.00 the rental agencies started to charge more and more to the consumer, until today when insurers quote $15 a day and the car rental agency doubles this and charges $30-35. This is usually a rip off.

Then of course as the market matured, the quoted price for the rental itself could be reduced in order to bring in more customers, almost like a loss leader, because the rental agency could count on the insurance purchase.

High priced Mexico car rental insurance is not exactly on my “fair value” list and very seldom if ever do I wax poetic about car rental agencies, but quite honestly this guy actually thought he was going to rent a vehicle for $9.80 a day and that was it? MID SIZED no less?

The problem I see is that Hotwire should have said $9.80 plus insurance. They should also have said that the insurance purchase was mandatory.

There is another BIG BIG problem here. In a perverse way, the agent actually could have saved his bacon. The mis-informed car renter erroneously believed that his credit card company was taking care of his “insurance”. He neglected to realize that the credit card would have taken care of the Theft and Collision exposures to replace the car itself, but No MC or Visa credit card in existance covers his Liability exposure which is the part that keeps you out of jail or in jail if you cant pay. Being half right can really hurt.

What do you think?

Although we do not sell Mexican car insurance to Mexico plated vehicles or Mexico plated Rental cars, for fellow “Mexicoistas” we offer quality Mexican auto insurance by Mexican Insurance Store at a fair price with no secret add on’s. We offer the only roadside assistance guarantee in the Mexican Insurance Industry which is half an hour on any highway in Mexico. Yep no chuckling. Half an hour on highways guaranteed. Even in Baja.

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