Good News – Bad News
Mexican car rental rates look wonderfully cheap on websites. Unfortunately, those rates usually don’t include insurance, which can easily double, and in some cases triple, the cost of renting a car. Declining to buy the insurance some of which is mandatory, is foolhardy to the extreme, but buying the full package without knowing what you’re buying is a mistake also.
Penetrating the Insurance Thicket
Mexican car rental companies offer various types of insurance, and only one is mandatory as far as the Government of Mexico is concerned. Here are the basics:
BASIC PERSONAL LIABILITY
Called “third-party liability insurance,” this is the one mandatory insurance in Mexico — as it is in the majority of the USA. It covers claims for injury and or damage you cause to another person, car, or other property in an accident. Mexico does not accept liability coverage from U.S. auto policies or credit card insurance. You simply cannot rent a car without Mexican liability insurance. By law a small amount of liability insurance is included in the rental price — however the mandated liability coverage amounts to less than $4,000.00 US Dollars. Nobody in their right mind wants to take a chance that this much coverage is adequate in Mexico. If you are under insured your most memorable vacation sight could include the inside of a Mexican jail until you pay off your obligation, and by the way our Rental goes to a Storage Yard until everything gets settled also. We will not rent a car to a client and have them and our Rental exposed to this kind of Liability.
#1 Supplemental Additional Liability Insurance (SAI or SLI)
Additional liability insurance is the answer to the third-party liability coverage problem, and is available from all rental agencies. Price and coverage amounts vary. BBB’s (SAI/SLI): Insurance policy coverage coverage is $5,000,000.00 pesos total for property damage, injuries, and death; $400,000.00 pesos for occupants medical; plus $5,000,000.00 pesos for legal assistance.
Our Policy Coverage appears to exceed all competitors’ stated coverage. There is Proof of Insurance Policy Coverage information in every one of our rentals.
#2 Loss Damage Waiver (LDW)
This is also called “collision damage waiver” or CDW. This is actually not insurance, but rather the rental agency’s agreement to waive some of the cost of theft or any damage you inflict on the rental vehicle. Keep in mind: You are responsible to the rental company for any loss or damage to the vehicle — no matter what the cause is or who is at fault. Collision damage waivers usually carry a deductible equal to 10 to 20 percent of the vehicle’s value. Depending on what you rent, this could be a significant amount of money.
There is also a “loss of use” clause that allows rental agencies to add an estimated amount of their loss of business because the vehicle is not available to rent while it is being repaired. Not all credit card coverage will pay for this type of claimed loss. You will be detained until money matters are settled. Before you decline LDW or CDW verify that your auto policy or credit card covers you for a car rental in Mexico, and that it includes this “loss of use” charge.
This one requires some research and some careful thought: If your own auto policy or credit card insurance benefits cover collision damage to a Mexican rental vehicle, you can pass on the collision damage waiver. Most other rental franchises will fight you on this and insist that you buy their coverage. If you insist on not buying it, they will then insist on you executing a separate credit card voucher for their deductible amount that they will hold and execute if there is any damage to their vehicle. This voucher can can sometimes be up to $5,000.00 or more and does freeze that amount of money on that card’s account.
Do yourself a favor and read the exclusions carefully — in fact, read them twice. The small print can deny coverage when you least expect it. For example, clauses excluding damage to cars driven off-road have been used to deny a claim for a car damaged in a dirt parking lot.
BBB’s LDW waives all charges for any damage to our rental car after our deductible.
#3 Zero Deductible Waiver (ZDW)
This waiver, sold by other rental agencies, eliminates you having to pay any deductible in the event of damage to the rental vehicle. As an example, if the rental agencies deductible is $5,000.00 (ours is $1,000.00) then you will have to pay for damages, up to the deductible to the rental agency before leaving the country. You then can file a claim with your insurance company to be reimbursed for the difference between what you had to pay and your stated deductible on your policy or credit card coverage.
ZDW is not sold by us. What we offer is a rental contract that has no deductible for a modest charge. In the event of loss or damage we will assist you in obtaining a claim number, you then assign the claim to BBB and we will file the claim for any loss directly with your insurance company or your credit card insurer. This option eliminates you having to pay us, and then file for, and wait for a refund for the loss or damage.
Purchasing complete rental car coverage in Mexico eliminates any unexpected transportation expenditures on your trip. As a bonus, there is no chance of your driving or accident record at home being negatively affected for anything that happens while you are in Mexico.
Credit Card Rental Insurance + Additional Resources
Most Credit Card rental insurance is Secondary Coverage. If you have any other policy that covers a Mexico rental, that insurance will have to pay any and all claims before the credit card company — this will expose you to higher premiums in the future.
A Google search for an explanation of policy benefits and exclusions for Visa, Master Card, and American Express credit card holders turns up many resources. Here is one of the best: wallethub.com. You can also search Visa Card benefits, Master Card benefits, or American Express benefits, and research your card’s rental coverage benefits.
Trip Advisor also has a great article about Mexican rental Car Insurance: tripadvisor.com
Renting a Car in Baja?
We’re here to help!
Give us a Call or Get a Quote and we’ll set you up with the perfect rental, at the right price.
“These guys are so easy, friendly and natural to work with. No hidden fees or “gotcha” insurance charges. They make using Credit Card provided collision coverage easy (check with your provider). All of our email correspondence is quickly and politely answered. Their used cars work great – and the prices are totally fair. We don’t go anywhere else!”
“My boyfriend and I recently rented a car for a week from Sagi and everyone at BBB . I wasn’t familiar with the insurance requirements for travelers in Mexico, but they explained everything honestly and didn’t pressure us to spend more than we needed. They also sent helpful info via email, and there are no charges for canceling or changing. They operate on honesty and courtesy. Easy to pick up and drop off, and Sagi took the time to tell us about the area and show us how to get around on a map. Fantastic business!!! Highly recommend you rent from them.”