What happens if I don’t have mandatory auto insurance in Mexico for federal highways?

According to figures as of May 2019 from the Executive Secretariat of the National Public Safety System (SESNSP), 5,564 people have died in traffic accidents and 13,728 have suffered injuries from this cause this year alone. If a person involved in a vehicular mishap causes damage to others… How will you pay for the damages caused? Will you be able to afford the expenses? What if one or more people die? This is a topic for reflection. We invite you to ask yourself… What if I don’t have mandatory auto insurance in Mexico?

The economic and social damage caused by an automobile accident can be of such magnitude that the person responsible does not have the solvency to face his responsibility.  There are countless cases in which the person involved loses his freedom and an important part of his patrimony.  On the other hand, the affected party is left with the frustration of suffering damages that in many cases cannot be compensated. And in some cases, with the regrettable death of someone involved in the vehicle accident.

Data from the Mexican Association of Insurance Institutions (AMIS), indicates that compensation for accidental death has a cost ranging from $300,000.00 pesos (approx. $16,000 USD) and $3,000,000.00 pesos (approx. $160,000 USD). The variation is determined by the legislation of each state in Mexican territory. In addition, those affected who are hospitalized acquire a debt that can represent 100% of their monthly income.

Faced with this situation, the authorities have taken measures. As a result, they have established mandatory auto insurance in Mexico for driving on federal highways. This insurance will cover at least damage or injury caused to people or property of others in a collision.

What is compulsory auto insurance?

compulsory-car-insurance-mexicoAs of January 1, 2019, mandatory civil liability insurance is established for driving on federal highways in Mexico. What models of cars must have mandatory insurance? All, from 2019 and below. This means that regardless of the year of manufacture, value and/or the capacity of the vehicle, they must be insured.

The coverage required to be within the minimum limits established by the corresponding legislation are:

  • $100,000.00 pesos (approx. $5,250 USD) for damages to third party/bodily injury
  • $50,000.00 pesos (approx. $2,625 USD) for damage to property of a third party

Important: Compulsory automobile insurance is not cancelable, because of federal requirements. In addition, it only covers the insured vehicle while driving on federal highways. Therefore, it does not provide coverage within the populations of the municipalities. This is because traffic surveillance is the responsibility of the municipality or state and not the federation. That said, upon solely carrying this mandatory coverage, you are unprotected the minute you are off the federal highway.

Which is better, paying the fine or buying mandatory auto insurance?

Many people think that the possibility of the authorities asking for insurance on the road is far from happening. And is why they bet on such probability to not insure their car. The reality is the risk of being stopped or involved in a traffic accident is 50/50. We recommend betting 100% on being prepared.

So, is it better to pay the fine or buy insurance? This is a personal decision, however we will share some figures that may incline you towards an answer.

Article 63 Bis of the Ley de Caminos, Puentes y Autotransporte Federal (Federal Highway, Bridge & Transportation Law), cites the following:

“All vehicles that travel on federal highways, roads and bridges must have insurance that guarantees the damages that one may cause to a third party…”

From the beginning, we can see that having obligatory auto insurance is an unavoidable measure. If there is non-compliance, Article 74 Bis establishes the following sanctions:

“For driven vehicles on federal roads and bridges that do not have an insurance contract […] the fine is from twenty to forty days of the minimum wage in force”.

In numbers, how much is that fine? It is equivalent to a fine of between 2,053.60 (approx. $110 USD) and 4,107.20 pesos (approx. $220 USD).

And so… is it cheaper to buy insurance than to pay the fine? The mandatory auto insurance in Mexico with limits requested by the authority, will cost less than 1,000 pesos (approx. $53 USD) on average depending on the vehicle. Sounds better to be prepared with your insurance policy, doesn’t it?

There is “good news” and so is the fine can be voided. In other words, if you purchase and show proof of insurance within 45 days after the fine, the penalty is canceled. With this, we go back to the sentence of the previous paragraph… “It sounds better to be prepared”.

If you already have car insurance, should you buy another one?

mandatory-auto-insurance-for-driving-on-federal-highways-mexicoIf you already have auto insurance where you live, it usually covers more than the minimum required by law. We suggest that you check the limits for civil liability and whether they comply with the law.

There are currently 14 states with mandatory liability insurance in their legislation. Each one has different conditions and fines. The states that require car owners to have insurance are: Baja California, Chihuahua, Mexico City, State of México, Jalisco, Morelos, Nayarit, Nuevo León, Querétaro, San Luis Potosí, Sinaloa, Tabasco, Tamaulipas, Veracruz, and Yucatán.

From the above, we can conclude that if you only have the mandatory insurance to drive on federal highways, when entering any of the states mentioned above, there will be the possibility of being imposed a fine for not complying with local legislation.

What is PROTEC’s recommendation? Always, at least carry auto liability insurance. It must cover all national territory regardless of whether you are traveling in any municipality or federal zone.

At PROTEC we are ready to offer you a quote for mandatory auto insurance in Mexico or full coverage.  Leave us a comment or click here to send us a message.

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