If you plan on taking a trip across the border to Mexico, make sure you have Mexican auto insurance coverage. Without proper coverage, travelers risk paying exorbitant fines and possibly jail time. Buying the right type of Mexican auto insurance can be difficult due to the differences between American and Mexican laws.

One common misconception that travelers have is that their U.S. auto insurance policy provides coverage for them in Mexico. That is not likely the case. If your auto insurance company is not licensed to do business in Mexico then they will not be recognized by the Mexican government and therefore cannot provide coverage for you.

If you drive a vehicle in Mexico, Mexican law requires you to have at least civil liability insurance issued by a Mexican Insurance company. This type of insurance will cover any damage which you cause to another person or vehicle up to your policy limits. There is also additional coverage that drivers can purchase which will cover their own vehicle as well.

In Mexico, if you do not have liability insurance and you are involved in an accident, it is very likely you will have to spend some time in jail. This is because you are guilty until proven innocent in Mexico. However, having Mexican Auto insurance will not guarantee to prevent you from jail time if the details of the accident are under investigation. Due to these types of laws, most Mexican auto insurance comes with some type of coverage for legal aid and bail money.

There are many companies in the U.S. which offer Mexican auto insurance in different forms. You can purchase a regular policy just like your U.S. auto insurance; or you can buy insurance for a certain amount of days. If you are just taking a trip for a short period of time, it is better just to get coverage for the amount of time you will be visiting.

(more…)

Every state has different laws when it comes to car insurance coverage. These laws lay out the minimum auto coverage motorists can purchase. Depending on the state, the minimums vary as well as the type of insurance. Although these are the state minimums; it is highly recommended that you buy as much insurance as possible. Some states require you to have just bodily injury and property damage coverage and some states require you to carry those two and others, such as Uninsured/Underinsured Motorist coverage and Personal Injury protection (PIP). You can find a list of state minimums here.

Whether you use an insurance agent or go direct to the insurance carrier; make sure to go over your state’s requirements. Another thing to keep in mind is that laws change all the time. Check back with your agent or carrier to make sure your coverage is up to date.

Auto insurance is designed to protect you from any liabilities arising from an auto accident, theft, vandalism, or Mother Nature. If possible, don’t just buy the minimum amount. If you are involved in an accident, costs can add up very quickly. Always purchase the maximum necessary in order to protect yourself. Your premiums may be higher but your level of security is greater as well.

But what happens if you are on vacation in a state where the minimums are different from your state? Will you be covered? These are very common questions and people get confused. In most cases, if you are involved in an out of state car accident; your insurance carrier is obligated to extend your minimum coverage to that of the state where the accident occurred. Many carriers also extend automatic coverage to rental cars, especially when used as a temporary substitute for your insured vehicle. However, limitations apply and not all carriers cover “pleasure rentals” or will just cover liability, so be sure and read your policy or check with your agent before renting a vehicle.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

There many types of auto insurance coverage to choose from. It is very important to understand the different types of coverage in order to make sure you are properly protected. The following is a list and brief description of the main types of auto insurance coverage available.

Collision Coverage:

This type of coverage refers to your own vehicle. If you are involved in an accident which is your fault; or the at-fault party is not identified, your collision coverage will cover the damage to your vehicle. Most types of collision coverage include some sort of deductible. Your deductible is the amount of money that you will have to pay before your insurance company will pay out. For example, if the damage to your vehicle is $750 and you have a $500 deductible; you will have to pay $500 and your insurance company will pay the remaining $250.

Comprehensive Coverage:

Comprehensive coverage applies to non-accident related vehicle claims. Comprehensive coverage covers theft, acts of God, vandalism, and damage by animals. Just like collision coverage, there is a deductible attached to this type of coverage as well.

Property Damage:

Property damage coverage applies if you are at fault for an accident. Your property damage will cover the damage to any property resulting from an accident for which you are at fault for. This could be the damage to another vehicle or a fixed piece of property like a guard rail. Limits of property damage range from $5K to millions of dollars. It is very important to have enough PD coverage. If you have $5K PD limits and you t-bone a Bentley, you’re going to be on the hook for a hefty bill.

Bodily Injury Liability:

This type of coverage applies to any harm or death caused to a person; resulting from an accident you are at fault for. Aside from injuries, it also protects you from any lawsuits resulting from the injuries. Bodily injury liability will cover medical bills, loss of income, and pain and suffering. Make sure you have sufficient coverage to prevent anyone from coming after your personal assets.

Uninsured Motorist:

This coverage protects you in the event you are involved in an accident with an uninsured, at-fault motorist.  It consists of Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage coverages, which take the place of the equivalent liability coverages of the uninsured motorist.  Given the high rate of uninsured drivers, especially in urban areas, this coverage is a must to ensure complete protection.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

An umbrella policy is designed to cover high dollar claims that may not be completely covered by your regular insurance policy. Umbrella policies can protect you from lawsuits arising from an accident or severe home damage.  They provide another layer of coverage over and above your auto, homeowners, boat owners, and other policies. A good candidate for an umbrella policy would be someone who owns multiple properties or someone who has a lot of equity in their home. However, those are not the only requirements. An umbrella policy also offers reassurance for people who have many additional assets in their home, such as a swimming pool, expensive electronics equipment and much more.  Umbrella policies can also fill “gaps” in coverage not provided by your underlying policies, such as coverage for libel and slander.

Having an umbrella policy is a good way to protect you, your family and your assets. It is a good idea to purchase your home, auto, and umbrella insurance from the same carrier. By doing this you may be able to receive additional discounts on all of your policies. Consolidation with one provider can also save you time when filing a claim by only having to go through that single company; and if you have ever had to file a claim before, I’m sure you agree.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.