HAVE OR NOT HAVE VEHICLE INSURANCE
Around 70% of cars in Mexico do not have vehicle insurance according to estimates made by the National Commission for the Protection and Defense of Users of Financial Services (Condusef).
Consequently, a car accident causes significant losses to the economy of a country and to you as a car owner .
According to the Mexican Insurance Association (AMIS), compensation for death is between $300,000 and up to $3 million pesos.
Having car insurance is your best option to solve an unexpected expense like this.
To mitigate the risks to which we are exposed, since September 2014 compulsory insurance has been implemented in Mexico. This means that all Mexicans must have a policy by law.
Vehicle insurance helps you cover unexpected expenses.
The Compulsory Vehicle Civil Liability Insurance covers the owner of the vehicle for the damage caused to a third party . Damages can be to property, bodily injury, temporary or permanent disability, and death.
WHY DON’T MEXICANS INSURE THEIR CARS?
According to the National Survey of Financial Inclusion , Mexicans do not insure their vehicles due to the cost of the policies and having to renew the policy annually.
Although it may seem like a lot of wool, it is necessary to analyze how prepared you are financially to face an emergency. Auto insurance is an investment.
For example, standardized insurance adapts to any income and covers the main risks to which you are exposed, and the process for claiming compensation is simple.
HOW MUCH DOES IT COST TO NOT HAVE VEHICLE INSURANCE?
As we mentioned before, the insurance rate in Mexico is low. The consequences for you are at least from paying fines every time you are infracted, to paying expenses in accident cases from your own pocket.
Any transit authority can request documentation such as a license, circulation card and insurance, in the event of a random inspection or in a road mishap.
Fines are calculated in Units of Measurement and Updating (UMA), published annually in the Official Gazette of the Federation. In 2020, the UMA is equivalent to $86.88 pesos daily, $2,641.15 monthly and $31,693.80 annually.
The penalty for not having vehicle insurance in the capital of the country is between 20 and 40 UMA, according to article 46 of the Traffic Regulations. That is, between $1,737 and $3,475 pesos. In Jalisco, the fine is for $2,418 pesos. While in the State of Mexico it reaches $1,460 pesos.
Exceptions for not having a fine
We’re sorry to remind you that you’re not so lucky, friend.
If you are stopped and you do not have an insurance policy for your vehicle, the Mexico City Traffic Regulations establish that you have an extension of 45 calendar days to contract your policy and then you have to verify that the sanctioned car has insurance.
To settle the penalty, you must go to the City Government offices with your policy, as well as your current license and the documents in order for the car.
Quite a headache, right?
WHY CAR INSURANCE IS THE BEST OPTION
The cheapest option (such as compulsory basic insurance) is not necessarily the most recommended. Because the sum insured to repair damages to third parties can barely be $100,000 pesos and $50,000 pesos for damage to their property.
If the damage you cause exceeds these amounts, you would have to pay out of pocket. For example, in case of death, compensation amounts to $4.5 million pesos for the victim.
It is convenient for you to evaluate ample coverage so that you really land on your feet like cats.
LIKE WHEN YOU DON’T HAVE INSURANCE
In case you have been the one who caused the accident and you have insurance, you only have to call your insurer so that they are responsible for the repair.
The adjuster will assess the damage and tell the third party how it will be compensated or repaired.
On the contrary, if the person you hit runs away , it is best to leave him and not risk your integrity. Instead of following him, point to the license plates and report him to the Public Ministry.
What to do if the person who hit you runs away from the crime scene?
If possible, seek to reach a settlement before taking legal action. Only if the person responsible refuses to pay, you will have to go to the authority and wait.
To avoid setbacks, insurers offer basic insurance coverage to people who do not have a policy and cause an accident, at an affordable cost.
WHEN CAR INSURANCE DOESN’T APPLY…
Surely you have heard someone who “did not pay the insurance”. What happens is that clients accept clauses with conditions in which your policy does not apply and then we forget about it.
That is why we are here, to explain everything clearly to you.
These clauses are called exclusions and are detailed in the general conditions of your policy.
Generally, vehicle insurance does not cover you when there are these exclusions :
- Driving under the influence of alcohol or drugs.
- That the driver of the damaged car is not the owner of the policy or has taken it without his permission.
- Not having or having an expired driver’s license or circulation card. (not in all companies)
- If you did not pay the policy on the dates agreed with the company or have not renewed the contract.
- That the car suffers mechanical failures due to natural wear.
- Damage to the lower part of the vehicle due to driving on roads in poor condition.
- In case of total loss, compensation is normally paid according to the Blue Book, which considers the depreciation of the vehicle, unless you have agreed that it be paid at replacement value (like new).
Is the deductible a trap for insurance companies?
It is common for us to be asked if the deductible is a pretext that companies use to pay you less. We make it clear to you…
The deductible is defined as the economic participation of the insured at the time of suffering a loss of your insured property.
Three coverages are normally applied in vehicle insurance:
- Material damage . 5% of the value of the vehicle
- Total theft. 10% of the value of the vehicle
- glass breakage 20% of the value of the crystal
Consult our advisors to clarify any doubts you have about the coverage of your vehicle insurance.
The Condusef ensures that the function of the deductible is to prevent the insured from making indiscriminate use of their insurance and that the company pays all expenses.
Thus, in the event that you have a collision and the amount of the repair is less than the deductible, you can choose between using your vehicle insurance or repairing the damage on your own.
We recommend that when you take out a policy you review the details and if you have any doubts, consult one of our advisers .
