A Look at Car Insurance Options When Renting a Vehicle in Mexico

One of the most common complaints that I hear from tourists to Mexico is how the Mexican car rental companies pressured them to purchase expensive insurance packages that substantially increased the daily rental rate.

During the sales pitch, the representative for the car rental company will probably tell you that your existing car insurance back home does not provide any protection for cars rented abroad — a statement that is true in most cases. However, that doesn’t mean that you need to purchase the rental company’s most expensive insurance plan either.

The key to saving money while still reducing your liability in the event of an accident, is to be an educated consumer. That’s where this article comes in.

What the Law Requires You to Have

Mexican federal law requires all vehicles to have a minimum amount of insurance coverage to cover property damage and/or injuries to third parties. This coverage is referred to as el Seguro Obligatorio de Responsabilidad Civil Vehicular.

Here are the minimum levels of protection required by federal law:

Injury and/or Death: $100,000 MXN (approximately $5,263 USD)
Property Damage $50,000 MXN (approximately $2,631 USD)

This mandatory basic insurance is normally already included in the rental price of the car; however, it falls short of providing any real protection. According to la Asociación Mexicana de Instituciones de Seguros (Association of Mexican Insurance Institutions), the average compensation for an accident involving a fatality can range from $300,000 MXN to $3,000,000 MXN. In U.S. dollars, that would roughly be $15,789 USD to $157,894 USD.

That’s why many rental car companies will require you to purchase some additional coverage or show them proof that you have coverage through another source (e.g. credit card company).

Coverage Through a Credit Card Company

Some credit card companies offer some level of rental car protection as a perk of membership — and to get you to use the card to pay for the rental.

Typically, this coverage is limited to collision damage and theft protection only, and does not include the two you really need when things go bad: personal injury and personal liability.

Before deciding to rely on your credit card company’s car rental protection, be sure to read the fine print and it wouldn’t hurt to speak to a customer service representative about the restrictions and conditions.

In order for your credit card protection to kick in, most credit card providers require the following:

  • The name on the credit card is the primary renter
  • The credit card holder declined the rental company’s collision damage waiver (CDW/LDW)
  • The rental was paid in full with the card providing the protection.

One more thing. If you do choose to use your credit card for coverage, I highly recommend bringing a letter of proof of coverage from your credit card company. Some companies will even provide this letter in Spanish. You can obtain one by contacting your card’s customer service department.

If the rental car company does accept your credit card insurance, they will likely put a large hold on your card. Some companies like National Rent a Car put a hold of $2,500 USD.

According to Europcar’s site, they will put a hold of between $12,000 USD and $30,000 USD. That’s pretty steep.

NOTE: Check the Terms and Conditions page of your rental provider first. Some companies specifically state that insurance through a credit card company will not be accepted as proof of coverage.

Traveler’s Insurance

If you rely solely on the mandatory insurance that comes with the rental car and the added protection your credit card provides, you will have to pay out of pocket for any emergency medical treatment you or your family members require — and that can get pricey.

Hopefully, you chose to purchase traveler’s insurance at the time you booked your trip. Typically, these plans cover emergency medical care and even include medical evacuation, if necessary.

I really can’t overstate the importance of springing for traveler’s insurance anytime you travel abroad. You don’t want your vacation experience to end up as a cautionary tale for future tourists.

Let’s Wrap This Up

One more thing. If you do decide to decline the rental car company’s insurance, don’t be surprised if they put a hold of up to $2,500 USD on your credit card. This practice is fairly common. The hold is removed when you return the vehicle.

Insurance is one of those things that might seem like a huge waste of money if you pay for it and don’t need it; however, if things go bad, chances are that you’ll wish you had as much coverage as possible.

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About the Author

Qroo Paul
Paul Kurtzweil (Q-Roo Paul) was a deputy sheriff in Florida for 25 years before retiring at the rank of lieutenant in 2015. He and his wife moved to Mexico looking to maximize their retirement income. They later started a blog called Two Expats Mexico (qroo.us) to share their experiences, as well as information about the logistical and legal aspects of retiring south of the border.

45 Comments on "A Look at Car Insurance Options When Renting a Vehicle in Mexico"

  1. Paul…I’ve been here for many years and that’s the best explanation I ever heard on Mexican car rental insurance. Right to the point. Like you, I hear complaints from tourists about the high cost of rental cars, and much of it is the cost of the associated insurance. I’m going to copy this, and next time, I’ll just hand it to the inquiring tourist. Thanks.

  2. José Prego | January 20, 2019 at 9:23 am |

    The other thing to note, is that the Credit Card coverage option does not cover tire damage and glass damage. If you are lucky and you damage a tire, I have replaced it in one of e many tire shops that are everywhere in Mexico. In this case it’s a case of “don’t tell as they did not ask!”

    One of the other tactics that many rental companies use is that as soon as you decline the added coverage opting for coverage from your CC, they all of a sudden ‘run out of cars!’ Stick to your guns and wait for a car! Keep smiling and get a car for the original quote given.

  3. Thank you. I finally understand the Mexican auto insurance after 30 years

  4. Kgfran356@yahoo.com | January 20, 2019 at 10:06 am |

    Thank you Paul. Because it’s not the high cost of renting the car, it’s the price of the insurance. We are going through that now. And even if you buy insurance on line, the rental car companies at the airport do not honor or recognize this purchase. They still insist you purchase insurance through them.

    • Many of the larger rental car chains will have it written into their policy that insurance policies purchased through third-party travel sites will not be accepted as “proof of coverage.”

  5. Question
    If you have Mexican car insurance for your Mexican car and have a Mexican drivers license and need to rent a car while traveling other parts of Mexico, do you need to follow the same advice for rental insurance?

    • Yes, it appears so. I contacted several Mexican insurance companies to ask if their coverage extended to vehicles rented by the policy holders and so far, they have all replied that it did not.

  6. Cliff du Fresne | January 20, 2019 at 10:14 am |

    Can you purchase a reasonably priced policy from the rental company to increase the coverage for personal liability only?

    • The last time I rented a car, I had a few insurance options to choose from. I can’t remember if that was specifically listed as one of them.

      • Paul…what is the typical daily rate most people have gotten for their rental cars that you have heard from? We typically pay about $26-29 per day for a midsize car which includes the 3rd party liability insurance. Rates are higher during holiday periods. 3rd party insurance is about 80% of the daily rate I mentioned. Wanted to see what most other people were getting including the 3rd party insurance.

  7. Richard 'El Jefe' | January 20, 2019 at 10:33 am |

    Paul, Would it be a good idea to mention here getting taking to the police station and held until the damages are settled? I know you touched on it in your crash article. If you don’t have enough insurance or are using your credit card, you need to have a way to pay the damages on the spot and submit it to the credit card later for reimbursement. You don’t want to end up sitting in ‘tourist jail’ scrounging for money to pay the damage. Which is why “if things go bad, chances are that you’ll wish you had as much coverage as possible.” Great topic!

    • That’s a great point, Richard. This article was running a little long, so I plan to discuss what to expect after an accident in a future post. There were some significant changes to the procedures in 2016 when el nuevo sistema penal acusatorio went into effect.

  8. Great article and explanation. Since we live in Baja Norte we carry Mexican insurance on our cars that go back and forth across the border. Via Vagabundos we have rental car insurance which also provides English speaking lawyer if needed. Haven’t needed to use that service but it is nice to know one call from anywhere in Mexico or the Caribbean will get us help.
    I am new to your posts so, could you clarify what we’ve been told regarding Mexican law about going to jail if the police cannot determine who caused the accident on scene?

    • I am working on a future post that explains what happens in the event of an accident. If there is a dispute about who is at fault but there are no injuries and you have insurance to guarantee payment if you are found at fault, the most likely thing that will occur is the vehicles will be seized until the matter is resolved. However, if there is an injury, you can expect to be taken to the Ministerio Público where you can be detained for up to 48 hours during the fact-finding period. If the matter isn’t resolved during that time, the case moves to the next stage of the legal process and that can mean formal charges for causing injuries and/or damage through negligence (e.g. speeding etc).

      These procedures can change based on jurisdiction.

      I know this sounds pretty scary, but your insurance company should provide you with legal assistance to help speed the process along and bring it to a successful conclusion.

      I’ll explain more about this in a future post. Until then, drive safely. 🙂

  9. Ronald and Lynne Gallant | January 20, 2019 at 11:52 am |

    Paul, to expand on your great advice concerning coverage with a credit card used to rent the vehicle: We have great coverage for rental car insurace with our CC, but only if we rent in our home country of Canada, or the US . . . unfortunately Mexico and other countries are excluded. So yes folks . . . read the fine print!!

    • You should get a card without all those exclusions like Thank You Preferred, Citi Premier or AAdvantage. 🙂

  10. I have read that if you book with Expedia it explicitly states that insurance is covered in the cost of the rental. Is this correct? Can you depend on Expedia’s insurance covereage?
    Midsize
    Chevrolet Aveo or similar
    Passengers 5 5 4 doors4
    Manual transmission Unlimited mileage Unlimited mileage MXN $750,000 liability coverage included
    Reserve now, pay later Free Cancellation Earn 98 Expedia Rewards points
    Pick-up : Counter and car in terminal

    • I haven’t done enough research about the insurance offered through Expedia but I can tell you that many of the larger rental car rental chains will have it written into their policy that insurance policies purchased through third-party travel sites will not be accepted as “proof of coverage.”

  11. Hola Q-Roo!
    Question: could there be a better rate for the extra comprehensive auto insurance for the “residente”. Less than what a tourist would pay ?

    I don’t have Méxican car insurance.

    Thanks so much!

  12. I would not book with a 3rd party like Expedia. I have been renting for over 10 years. For peace of mind, I rent from a few local companies and get the insurance as part of their quote (tires/glass extra which I get for longer trips – recently to Bacalar / Mahahual (hint: do not park under coconut trees)

  13. PS: Paul, good to see you at Lol-Ha for the reunion (Salty Snowbirds)

  14. My husband and I went to Akumal for the first time in October 2017 and rented a car through Expedia when we booked our trip; we opted for Expedia’s insurance at the time we booked, thinking we were covered. When we actually had to pick up the car the car rental agent were told the same thing Paul mentioned – in Mexico the insurance we bought through Expedia was basically worthless, and if we declined the extra insurance the rental car company was going to place a $2,500 hold on our credit card. I was SO MAD. We sucked it up and paid for the extra insurance through the car rental place, thinking for sure we were being scammed. I guess I am somewhat relieved to see it wasn’t a scam to pay the extra insurance in Mexico and that is standard practice for the rental car companies to place a large hold on your credit card if you decline the extra insurance. Next time we go to Mexico and rent a car I’m definitely going to skip the Expedia insurance because I’ll be paying extra for insurance in Mexico when I go to pick up the vehicle.

    I do have a question or possible suggestion for another blog post . For snowbirds who are not intending to be permanent residents, can you get a better rate for the car plus insurance if you rent for several months than if you are just there for a week or two? I read somewhere that renting a car there for a longer term rental can cost cost several hundred dollars a month and wondered if there are better deals to be had.

    Thanks for all the great information!

    • Although the rental car companies don’t accept insurance purchased through third-party travel sites as “proof of coverage”, those policies can still come in handy if you’re ever involved in an accident down here.

      As far as finding better deals if you rent a car for a longer period of time, we have found that to be true; however, those discount prices aren’t advertised anywhere. What we generally do is negotiate a lower rate with the manager at the car rental business.

  15. Hi Paul,  I read your interesting post on car insurance in Mexico.  I am a retired police officer from the Quebec Provincial Police Force and spend time in Mexico on a tourist visa. In Quebec we have a Public No Fault Insurance Plan for Quebec residents.  This plan covers all bodily injuries or death sustained following a traffic accident.  Of course there are conditions and obligations attached to the Plan.  For your information I have 2 PDF files, how might I forward them to you?

    By the way I appreciate and laud your time and effort with your blog.  A wealth of information!

    Be safe,

    Tom Turnbull

  16. We rented cars frequently in 2018; here are a couple of our observations:

    The (up to $2,500 US) credit card hold is if you decline the rental company’s CDW/LDW/Theft coverage. This makes sense, as any third party insurance you may have for these (via credit card benefits or a booking site like Expedia) REIMBURSE you for covered expenses – you still must pay for the damages out of your own pocket. So it may not be true that the coverage is “worthless”, but you need to understand the process. If you go this route, make certain that your credit card has a sufficient credit line to support it.

    For cheaper third-party liability coverage, we found two options: Sanborns, https://www.sanborns.com/, and Lewis and Lewis, https://mexicanautoinsurance.com/. While these are US companies, they have partnered with a Mexican insurance company and resell Mexican liability insurance, that will send an adjuster to the accident scene (see Paul’s recent fender bender article for more details on that process).

    • Thanks for sharing that information, Scott. We have heard of some Mexican car rental businesses placing holds on cards for declining other insurance packages as well, not just the CDW/LDW/Theft. It’s important to review the terms before you rent. 🙂

  17. You may want to research and confirm on the minimum amounts of liability coverage required for each state that you plan to travel in. Perhaps the state that you pick up your rental car will have a lower minimum than some of the other states that you have plans to visit. Confirm that you have a generous amount of legal assistance included so you will not spend much time in jail. If there is an injury, then you go to jail. If you do not speak Spanish confirm that your insurance carrier has english speaking representatives available. If you get a ding in the body work somehow go to plan B and return the car at night away from a street light. (Just messin’ with you).

  18. Julee Doiron | January 22, 2019 at 9:25 am |

    Hi Paul, and thank you! Scott H. slightly touched on it, but are there any recommendations for getting proper rental car Mexican coverage before hand, without having to use what the pushy rental agents try to force on you? Or, should we just succumb to their carnival tactics and buy what they sell?

    • I don’t have any specific recommendations related to insurance alternatives when renting a car, sorry.

      Your reference to “carnival tactics” did make me laugh out loud though…lol.

  19. My understanding is that in QROO, the SLI minimum amount is $350,000 pesos. That is with any rental, including 3rd party sites. Now the limits on civilian death varies per state. In QROO, its about $90,000 US (close to $2,000,000 pesos. In the Yucatan state (e.g. Merida), is over double that amount.

    So make sure your SLI (Liability insurance) is 2+ million (pesos) – or more if going outside of QROO.

    Please let me know if I am mistaken.

  20. Paul…what is the typical daily rate most people have gotten for their rental cars that you have heard from? We typically pay about $26-29 per day for a midsize car which includes the 3rd party liability insurance. Rates are higher during holiday periods. 3rd party insurance is about 80% of the daily rate I mentioned. Wanted to see what most other people were getting including the 3rd party insurance.

  21. Hi I’m a wee bit confused now. What I understood from this article Is the insurance quoted is protected by law and includes mandatory insurance. Is mandatory TPI inclusive.
    So then why do we need to be paying more. So if I read that law to them will that change things. This is where I’m confused.
    Maybe the term mandatory and enough insurance is where I’m confused.
    Or do u mean final price is law but to check that the amount of coverage is enough.
    We go through the pitch each and every time we rent. Very frustrating. 🙁
    I think by viewing the comments people are thinking that the pitch is ok after all but I’m thinking there’s still a bit of a scam for us at times.
    Thank you for clarification.
    Gail

  22. Heidi Wulfers | February 4, 2019 at 8:47 am |

    We are hearing more and more about personal car rentals. What are the pros and cons of doing that? Does the owner’s insurance cover us (as it would in the States if we borrowed a neighbor’s car)? Thanks Paul. You are our go-to guy!

    • Hopefully, the person took that into account and got the appropriate type of coverage for their car. Car insurance companies often look for loopholes to avoid paying for claims.

      If the person is renting their car through a site like Carengo, then it should be fine.

      https://www.carengo.mx/

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