How to Insure Your Vehicle for Long-term Stays in Mexico

If you plan to keep your vehicle in Mexico for a month or longer, there are a number of decisions you will need to consider in order to properly insure your vehicle.

The two main questions you first need to contemplate are:

1: Should I permanently import my vehicle into Mexico and get Mexican license plates?

2: Should I keep my US or Canadian auto insurance in force while my vehicle is in Mexico?

We will list the pros and cons for each of these questions below:

Should I permanently import my vehicle into Mexico and get Mexican license plates?

Unless you plan on leaving the vehicle in Mexico forever, you should not even consider this question. But if you do plan on leaving the vehicle in Mexico permanently, here are some things to consider before making this decision:

Pros for permanently importing your vehicle in to Mexico:
- You will no longer need to worry about keeping your US or Canadian registration up to date.
- You will not stand out as a tourist while driving around Mexico because you will have Mexican license plates.

Cons:
- You will never be able to change the registration back to the US or Canada.
- You can no longer purchase Mexican ‘Tourist’ auto insurance for the vehicle (Adventure Mexican Insurance only covers NON-Mexican registered vehicles). Domestic Mexican insurance tends to be more expensive than ‘tourist’ Mexican auto insurance.
- You have to pay import fees to the Mexican government.

Keep in mind that for vehicles less than 10 years of age, Mexican laws may prohibit you from importing the vehicle. We suggest you contact a Mexican consulate office with any questions regarding vehicle importation into Mexico.

Should I keep my US or Canadian auto insurance in force while my vehicle is in Mexico?

NOTE: The following information only applies to customers who want Collision and Theft coverage in Mexico. If you simply want a Liability Only Mexican insurance policy (no collision or theft coverage), there are no requirements for US/Canada insurance.

Important fact to know: If you want Collision and Theft auto insurance coverage in Mexico, most Mexican insurance carriers require that you also have current Collision and Theft coverage in your home country (US/Canada). Adventure Mexican Insurance has many insurance solutions that can waive the need for Collision and Theft in your home country, but we recommend that you call our office for details.
800-485-4075

Why do the Mexican insurance companies have this rule?
Please keep in mind that many customers who purchase annual or 6 month Mexican insurance policies do not keep their vehicle in Mexico full-time. For example, many of our customers live in Arizona, but they also own a vacation condo in Puerto Penasco, Sonora. In this case, our customers realize that purchasing an annual Mexican insurance policy is much less expensive than buying multiple daily Mexican insurance policies for their 20 trips per year to visit their condo in Mexico. In this situation, the vehicle is actually in Mexico only 30-90 days throughout the year. Also, this type of customer obviously needs to keep their US auto insurance in force because their vehicle is actually in the US for the majority of the year.

The Mexican insurance companies also know that some of our customers who purchase Annual or 6 month Mexican insurance may actually keep their vehicle in Mexico for every single day of the Mexican insurance policy period. People who have retired in Mexico or Snowbirds who spend the entire winter in Mexico fall into this category. A vehicle that is in Mexico 365 days out of the year is statistically at a higher risk for having an insurance claim than a vehicle that is in Mexico only 30 days throughout the year.

The Mexican insurance companies have discovered that a vehicle that does not have current insurance in the US or Canada is most likely going to be in Mexico for the entirety of the Mexican insurance policy period, thus many of the Mexican insurance carriers choose to add a small ‘Resident Surcharge’ for vehicles that do not have current US or Canadian insurance – make sense?

In order to enforce the rule that this ‘Resident Surcharge’ must be added to your Mexican insurance policy if you do not carry current Collision and Theft coverage in the US or Canada, some Mexican carriers actually will deny insurance claims if you do not have US/Canada insurance and the ‘Resident Surcharge’ has not been applied to your Mexican insurance policy. So please do not take this topic lightly!

Again, Adventure Mexican Insurance offers many solutions for customers who choose to cancel their US/Canada insurance, so please call our office for details. Our knowledgeable staff can explain all of your options and make sure you are getting the correct insurance solution for your situation:
800-485-4075

Pros for canceling you US/Canada insurance while in Mexico:
- Possibly save money by not paying for your US/Canada insurance

Cons for canceling you US/Canada insurance while you are in Mexico.
- You may need to pay a ‘Resident Surcharge’ on your Mexican insurance policy
- You may have to pay a higher US/Canada insurance premium if you try to re-activate your US/Canada insurance later. If you have a gap in insurance coverage, many companies will then charge a higher rate.
- If your vehicle is financed, this could possibly upset your lien holder who may require that you maintain US/Canada insurance

Suspending your US/Canada auto insurance coverage – ‘lay-up provision’, ‘non-operating status’, ‘suspension of coverage’, etc.

There is one more option to consider when deciding how to handle your US/Canada insurance. Many US/Canada insurance companies will allow you to temporarily suspend your Collision or Theft coverage while the vehicle is not being used. Originally, this concept was created for people who may be storing their vehicle in their garage for a long period while the owners travel abroad ‘non-op status’, but this option can also be applied while the vehicle is in Mexico. The US/Canada insurance company understands that there is no risk of a claim that they could be responsible for while the vehicle is in Mexico, so they are willing to place the US/Canada insurance in ‘non-op status’ for this time (at a reduced insurance rate).

Many Mexican insurance carriers will accept US/Canada Collision and Theft coverage that is in ‘non-op status’ as valid current US/Canada insurance, thus the need for a ‘Resident Surcharge’ can be waived.

Adventure Mexican Insurance works with a few Mexican insurance companies who do accept this US/Canada ‘non-op status’ as current US/Canada insurance, so please call our office for details. We can save you from having to pay any Mexican insurance surcharges!

All of this information may have your head swimming with questions, and we completely understand. This is a confusing topic, and we believe that you should talk to an insurance professional if any of this information applies to your situation.

So please, call our office so our insurance agents can advise you of your best options. Adventure Mexican Insurance Services 800-485-4075