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When purchasing Mexican car insurance there are several things one should consider:

(1.) Is coverage needed from a Mexican insurer?

(2.) What is the difference between a US and Mexican auto insurance policy?

(3.) What type of auto insurance policy and what limits are needed for travel to Mexico?

(4.) Are the US and Mexican insurers used financially stable?

Flagstaff, Arizona December 23, 2009 -- Each year the staff at Mexico Insurance Online (MIO) compiles a list of the most frequently asked questions (FAQs) that consumers of Mexican auto insurance inquire about. Below are some of the most commonly asked questions.

For each of the last ten years, thousands of visitors who drive their car into Mexico have been purchasing Mexican insurance to ensure their vehicle is properly protected while South of the Border.

It is ironic that most consumers use great care when purchasing insurance in the US or Canada, yet use a lesser standard of care when purchasing an insurance policy for travel to Mexico. The answers to MIO’s FAQ's will help agents better-inform their clients about purchasing auto liability insurance for Mexico.

When purchasing any type of Mexican auto insurance, your buyers should analyze a number of issues including:

1. Does coverage need to be purchased from a Mexican Insurer?

2. What are the differences between a US and Mexico auto insurance policy?

3. What type of Mexico auto insurance is needed to travel to Mexico, and at what limits?

4. Are the US Broker and Mexican Insurer they represent reputable and in sound financial condition?

Why should coverage be purchased from a Mexican auto insurance company?

Mexico law mandates that only insurance companies that are licensed and admitted in Mexico can provide "civil liability" auto insurance coverage that is recognized by the judicial system of Mexico. Although a few US insurance companies will extend physical damage coverage (collision, comprehensive) on an auto or RV while the insured is driving in Mexico, they cannot and do not provide Mexican liability.

What are the differences between US and Mexican coverage, and what type of insurance and what limits are needed for travel across the border?

There are tremendous coverage differences between US and Mexican auto insurance policies, and far too many "minor" differences to list here. The following are some of the major differences outlined by type of insurance.

LIABILITY INSURANCE - Auto liability in Mexico (liability coverage is a part of all homeowners, auto, commercial property policies, etc.) is determined by Civil Law, and is based on limits defined by Mexican Statute. Claims for pain and suffering and emotional distress are virtually unheard of, and claims for Property Damage to Others and Bodily Injury to Others are settled on an "actual loss" basis, guided by Statute.

Personal Injury lawyers, as we know them in the US, do not exist in Mexico. Therefore, liability limits and claims exceeding $100,000 are rare. It is far more likely to have a "Property Damage to Others" liability claim that approaches this limit (damaging someone else's new Chevy Suburban, valued at $55,000, for instance) than it is to have a "Bodily Injury to Others" liability claim that approaches this limit (damaging the occupants of the Suburban, for instance). This is almost the exact opposite of how claims are settled in the US.

Keep in mind that the liability insurance purchased from a Mexican auto insurance company will not respond to claims or suits brought against the insured in the United States or Canada for an "incident" which occurred in Mexico. All liability insurance claims under a Mexican auto insurance policy must be brought and adjudicated in Mexico for coverage to respond.

AUTOMOBILE INSURANCE - Automobile Insurance rates, coverage, limits, and deductibles vary greatly among Mexican auto insurance companies. Some important items to look for are:

    * Does the Mexico auto insurance policy offer adequate liability limits, or does the policy reduce the amount payable by using split limits?

Split limits reduce the amount available for "Property Damage to others". An ideal limit of insurance on a Mexican Auto insurance policy is $100,000 Combined Single Limit. Beware of lower split limits of $40/80/40, for example.

    * Does the insurer automatically include Legal Aid and Travel Assistance?

This "additional" coverage should be included in every auto liability insurance policy in Mexico. They will help the insured tremendously in the event of an accident. Without them, there could be legal bills and huge headaches until the liability has been determined.

    * What are the Physical Damage coverage and deductibles?

The main exclusions on a Mexican auto insurance policy historically have been Vandalism and Partial Theft, but now this coverage can be added back under special endorsements. Read more at: http://www.mexicoinsuranceonline.com/mio/faq/consu_cov.html

The policy is written on a "named perils" basis, which includes coverage for Collision, certain Meteorological Events, Total Theft, Fire, and other perils. Deductibles are generally a percentage of the value of the insured vehicle although special endorsements offering fixed deductibles are available.

Are you a reputable U.S. Broker?

Thousands of US insurance agents and brokers offer insurance for Mexico. Logically, a great number of these agents are located close to the border. Some of the important considerations when deciding to provide Mexico auto insurance to your clients include:

1. Do you use online systems to issue auto liability policies in Mexico, so that the data is immediately available via the web to authorities in Mexico? Mexico Insurance Online policies make insurance information immediately available to authorities in Mexico, in the event your client suffers an accident there.

2. Do you have experience in the Mexico auto insurance market and the US market? It is important for an agent to have a vast knowledge of the difference between US and Mexico auto insurance and who can counsel clients regarding the potential gaps in coverage among these policies. Your customers should have confidence that they will receive professional, knowledgeable service when they need the coverage to respond or in the event of a coverage dispute. The Mexico Insurance Online professionals have all the knowledge you will need to make your customers comfortable. For questions or webinars visit Erin Beaty at erin.beaty@specialtyinsonline.com.

3. Do you carry Errors and Omissions insurance to protect yourself and your customers when legitimate mistakes are made?

Is the Mexican Auto Insurance Company Reputable?

As the global economic environment continues in a state of uncertainty, it may be more important than ever to offer Mexican auto insurance from a financially strong insurer. No matter how reputable your agency, if you are placing insurance with a troubled insurer the result could be unpleasant in the event of a claim.

There are over 50 insurance companies in Mexico, similar to the U.S., "some are good and some are bad". Check the www.ambest.com website to ensure that the insurers you use are rated.

Although some US insurers have purchased ownership interests in Mexican auto insurance companies, these Mexican companies operate independently of the US parent company.

You would never place your clients U.S. insurance with unrated insurers, make sure you are selling Mexico insurance coverage through financially stable, A.M. Best Rated insurers. Each of the insurers Mexico Insurance Online offers are rated "Excellent" or "Good" by A.M. Best.

To conclude, insurance in Mexico is just as complex as it is in the US. Although all types of insurance are available in Mexico, coverage, terms and conditions vary greatly among insurers.

The Mexico Insurance Online Professionals can be reached via their website at http://www.mexicoinsuranceonline.com/mio/contact_us.html or toll free at 888.467.4639. Click here to sign up to sell our products.