Mexican Insurance Coverage, “Regulated” Does NOT Mean “Standardized”

There have been many talks recently about Mexican insurance coverage and rates. Some people assume that all Mexican insurance coverage is the same because they have been told that car insurance for Mexico policies is REGULATED. Many online and border providers have claimed that the Mexico Department of Insurance regulates Mexican insurance coverage and rates.

This is technically accurate but doesn’t be naive. I’m sure the Mexico Department of Health REGULATES the drinking water quality throughout all of Mexico. Do you feel protected?

Some brokers are spinning words this way to make people assume they can safely buy UNRATED or POORLY RATED car insurance for Mexico policies online and at the border because Mexican insurance coverage is regulated, implying that it’s safe.

“Regulated” Does NOT Mean “Standardized”

The sales implication is that car insurance for Mexico policies costs the same wherever you go, and all procedures are safe and cover the same exposures, but nothing could be further from the truth. Prices and coverage are NEVER the same in Mexico. Car insurance policies are pretty much standardized in the US or Canada. Your choice is based primarily on what liability limits to buy but; not in Mexico.

Not in Mexico

Every Mexico insurance company offers different terms, conditions, and prices, paying to shop around. Regardless, the wise Mexican insurance coverage shopper thinks about stability, terms, conditions, cost, and getting the best value for their vacation dollar.

Comparison Shopping Pays

Some insurance brokers claim it doesn’t matter where you buy your insurance when selling a weak average policy that pays them a higher commission. After all, they say, it is regulated – implying that all policies are created equal, i.e., standardized, so the lowest price is all you need to look out for.

That’s inherently false and misleading! Of course, it pays to do some comparison shopping for terms and conditions and price before making a final purchase. But, of course, you can’t do any comparison shopping at all when you’re at the border, so your risk is far more significant to be taken for a ride.

Experienced travelers compare

Experienced travelers compare and contrast several minimum “A”-Rated Mexican insurance policies offered by financially stable insurers and buy one online that suits their needs before heading south of the border. Unrated or under-rated below average policies provided by small Mexico insurance companies at the border and online are sold all the time for basically the same premium as a stable, comprehensive policy that has much better coverage, with a high-quality claims reputation.

For Example: Take a look at A. M. Best’s Financial Strength Rating. A.M. Best is the worldwide authority for Insurance Company financials.

Secure                                      Vulnerable
A++, A+ (Superior)               B, B- (Fair)
A, A- (Excellent)                    C++, C+ (Marginal)
B++, B+ (Good)                     C, C- (Weak)

D (Poor)
E (Under Regulatory Supervision)
F (In Liquidation)
S (Suspended)

NR (NOT RATED)

The Not Rated (NR) designation is assigned to companies that choose not to be rated by A.M. Best.

Since it costs approximately $10,000 per year to be rated by A. M. Best worldwide, you have to wonder why any stable multi-million dollar insurance company would choose to remain unrated? What are they hiding?

Don’t Believe the Mexican Insurance Coverage Hype.

After maybe hearing from your neighbor that Mexican insurance coverage is the same wherever you go, you may assume that you can buy it from the first booth or shack you run across. Here’s the thing: Rates vary considerably depending on many circumstances. It’s not unheard of for one provider to charge up to 100 percent more for the same policy with the same exposure while providing much less coverage. They get away with this because of the common misconception that rates and policies are the same everywhere.

After all, that’s how it works in the US, so why not in Mexico? Wrong. Unfortunately, some providers will try to take advantage, but luckily, you don’t have to fall for it. Again, the weakest insurers pay higher commissions to their agents than the solid Mexico insurers with the most robust programs.

Be a Smart Shopper

When comparison shopping for regular US or Canadian car insurance, you aren’t likely to see significant differences in coverage. That’s not true about car insurance for Mexico policies. You will be flabbergasted when you see some of the variations in coverage and terms and conditions from one Mexican insurer to the next.

Differences in coverage

For example, do you wish to be forced to repair ONLY in Mexico? Or would you like to be able to fix it in the US or Canada as well? What is the labor rate on the policy? $38 per hour? Can you repair your vehicle in the US or Canada? Do you understand the meaning of partial theft? Is vandalism covered? What about legal assistance? Fixed or variable deductibles? Would you like to be paid wholesale, retail, or dealer cost in a total loss or theft? What is the fatality limit in the states I’m going to be driving in? Do any of your coverages have a sub-limit?

Don’t be blinded by the hype.

Don’t be blinded by the hype. Make sure to read the fine print and fully understand the details and features before buying. Ask questions! Go to a specialist, not a generalist who doesn’t understand or have time for small policies. As long as you are careful, you should land a fair deal.