When you start shopping quotes for Mexican insurance, the decision will arise between full coverage and liability only coverage. The division in these two options is typically reflected by a major price difference.
But what is the real difference?
If you hit the Facebook groups and forums, the diverse set of opinions will yield little real information. Everyone makes a decision based on personal preference. We advise our customers to make that decision based on risk tolerance (more below).
Before you jump to the lowest price option, do a quick analysis of your asset value and understand the risk associated with each policy.
Assess Your Value Against Loss
For vehicles older than 10 years, the default for most Mexican car insurance quotes is only for liability coverage. You will see the single option in this case. The cost is still relative to the vehicle value but it fluctuates far less than full coverage quotes.
While the form system defaults to liability only for older vehicles, we can always run full coverage quotes on an individual basis. There are plenty of very valuable vehicles in this category that are worthy of higher coverage levels.
Before even filling out a quote form, it’s a good idea to grab your Kelley Blue Book value. Knowing the value will expedite the quote process and it will ensure you have an accurate quote for the actual value of the vehicle.
A $10,000 value will have a lower premium cost than a $20,000 value. In the case of a total loss, it’s important to state your true value because anything lower will reduce your ability to regain the value of your loss.
With knowledge of your value, you know what is at risk!
Think Through Risk Tolerance
We’ve insured very high value vehicles for liability only. This means the owners had a high risk tolerance. They believed the risk of major damage or total loss on a short trip was very low. And in many cases, the risk is relatively low. But it’s not Zero!
Every individual differs on this subject.
Personally, I drive a 1994 pickup truck on my trips through Baja and much of the mainland. I used to drive a 1994 Astro van on these journeys as well. In part, I do this because the value is low and I feel the loss is acceptable. If my $4,000 truck is lost, I can live with that outcome. If I lost a $100,000 truck however, that would be a major hit.
I should also note, my truck is a common GMC and parts are easy to source. In fact, I have a few trusted mechanics on my routes and I always do my annual maintenance and repairs with these folks while traveling. I save money over high labor rates at home and I also learn something new on every stop as they frequently allow me to watch and participate in repairs.
For high value vehicles, I recommend a plan with full coverage against accidents, theft, etc. You will pay a higher premium but you also have the ability to be made whole in the event of a loss (if that loss falls within the parameters of coverage).
In summary, risk tolerance varies widely and it’s up to the individual. Maybe you are making a quick trip to the dentist and want the most cost effective coverage. Or, you are traveling through densely populated areas and want full coverage to manage the risk.
Why Buy Liability Only Mexican Insurance
There are a few common reasons travelers choose this option. It’s important to understand that liability is the legal minimum required for all vehicles. You have coverage limit options and we recommend choosing the higher side ($500,000+) as it doesn’t make a big impact in premium costs. Of course, you can always run multiple quotes and play with the numbers in our system.
You might settle on liability only for the following reasons:
- Short trips that remain close to the border
- Older vehicles
- Lower value vehicles
- High risk tolerance
- Excellent driving record and confidence
The policies come with legal assistance and third party coverages. Always read the line items before purchasing and carry a printed copy of your policy while driving in Mexico!
