AUTO INSURANCE
What are the different types of auto policies?
In Mexico, there are several types of auto policies, being the main one, Resident Auto (vehicles registered in Mexico). There are also tourist auto policies, both northbound (Mexican vehicles entering the USA, also known as Non-Resident Auto) and southbound (USA vehicles entering Mexico). Resident auto policies are divided into Trucks –commercial coverage- and private vehicles.
What is the basic coverage for autos?
All policies include the third party liability coverage and legal assistance, which could include a bail bond in case of a major accident; medical expenses and other coverage’s (material damage and theft) are optional.
Do I need a driver license to have insurance?
Yes, you need to have a valid driving license and according to the type of vehicle you drive, meaning that if it’s a commercial vehicle, a truck, a corresponding valid license, has to be in place
Does a policy have to be paid for the loss to be accepted?
Unless it’s within the 30 days grace period, the policy needs to be paid.
Does a policy cover’s Physical damage?
You need to be aware of the type of policy you buy, if its full coverage, covers your own physical damage; if its limited coverage it covers the total theft of the unit and all policies include the third party liability and legal assistance which is the basic coverage. In the case of pick up trucks, have to state its use, because if normally carries loads, then it needs to be quoted as a commercial unit.
Am I covered if I driving under the influence?
It’s an absolute exclusion in commercial units and in most tourist auto policies.
Does an auto policy cover everything?
There are some standard exclusions such as partial theft (tires, mirrors, etc) and vandalism. Also you have to be conscious of the deductible that your policy has for your own damages. These deductibles are sometimes a % of the commercial value of the vehicle or can be a fixed amount (please read your policy carefully).
When involved in a collision and I am not at fault, who pays the deductible?
Normally, the third party would pay for your deductible (assuming they have their own insurance), but this is something the insurer cannot guarantee since this recovery is based upon the collection from the third party.
Does a resident auto policy covers’ me in the USA?
Most of the Insurance companies are already including the liability coverage for the USA for Mexican registered vehicles. This does not apply for commercial vehicles, as these do require a separate policy.
HOME OWNERS
What does a Homeowners policy provides?
It’s a package policy, which should have at least three coverage’s; basic fire and allied perils for building, contents and general liability. Additional coverage are: extra expenses or loss of rents, and miscellaneous coverage such as burglary/robbery/assault, cash and securities, glass, electro-domestic breakdown and personal items. In addition and to round up the policy, some insurers have additional coverage consisting of services such as home assistance like plumbing, locksmith service and power failure. Also included is some limited travel assistance.
What are the EXCLUSIONS that I need to be aware of?
Excluded items and perils are; value of land, frescoes or murals, gold bullion or any type of valuable papers, boats, aircraft or motor vehicles that require of a license plate, glass under 4mm thick, acts of authority, war, political risks, nuclear, pilferage, damages caused by graffiti, abandoned property. Also, Loss of rents for catastrophic perils like Flood, Wind or Earthquake.
What does General Liability cover?
General liability coverage includes third party damages, including damages caused by pets, servants or employees of the insured, within the property covered. Also outside the home for damages caused to third parties, by members of the family with use of bicycles, skateboards, row boats, and others.
What does Burglary covers?
It covers burglary/theft of your household contents. Signs of forcible entry and/or assault need to be present, to trigger the coverage. Additional coverage is available for vvaluables such as jewelry, works of art, and valuable items which can be insured, but they have to be scheduled on the policy.
What does Electronic equipment covers?
Coverage includes negligence, sabotage, short circuits, breakdown due to centrifugal force of electronic type equipment. Major exclusions include wear and tear, minor damages such as paint coming off, scratches, software that has been installed, maintenance, spare parts, filters and other consuming goods.
What does personal objects covers?
Provides coverage for property of the insured that is carried outside the home such as, cameras, watches, blackberries, lap tops, etc., but usually for a very low insurance limit, and they have to be scheduled on the policy. Mysterious disappearance, Money and securities are excluded.
MAJOR MEDICAL EXPENSES
What does a major medical expenses policy covers?
There are individually on a family basis or group policies, they cover the expenses due to hospitalization, due to sickness or to accident and includes doctors visits, medicines, lab studies, X rays, blood tests and surgery always and as long as the claim amount exceeds the deductible agreed in the policy.
Are preexisting conditions covered?
If there is a preexisting condition, the insured has to declare it in the application before insurance is in force and the Insurance Company has the right to accept or exclude the specific case. Also since there are sickness and conditions such as pregnancy, that have a waiting period, some policies even for more than 12 months, such as AIDS among others.
Differences between Individual and group policies?
An individual policy is more expensive than a group one but it has a big advantage, the renewal is guaranteed as long as the policy is paid. Also, in case of covered losses, the Insurance Company cannot increase the price of the Insurance individually on renewal of the policy. Group policies have can be non-renewed by the carrier and the premium is always linked with the loss experience.
Does a Medical Policy cover everything?
All policies have a deductible (accidents is sometimes cero deductible) and most have a copayment depending if you are using hospitals and doctors of the network and payment is handled directly from the insurance company to the hospital, when appointed has been made in advance; instead, when using other hospitals, payment is handled by reimbursement, once surpassing the deductible. Keep in mind there are some standard exclusions such but not limited to schizophrenia, bipolar disorders, anxiety, depression, to mention just a few.
What to do when a surgery is going to be conducted?
It is very important to call the insurer to negotiate with hospitals and Doctors to ensure their honoraries fall within the brackets that the company is willing to pay for such operation.
What to do in case of sickness?
When possible call the carriers 800# there is always a Doctor to direct and assist you
LIFE INSURANCE
Do I need to fill out an application to obtain life Insurance?
Yes on all cases there is an application to be filled out and depending on the amount insured and age of applicant, some medical exams might be requested at the Insurance Company expense.
Are Premiums Tax deductible?
Yes, on pension policies the risk portion of the premium is tax deductible up to an annual amount established by the Mexican IRS
Can a policy cover a loan?
Yes, policies can have special beneficiaries, to guaranty liabilities in case of total/partial disability or death.
COMMERCIAL INSURANCE
What does a Commercial Policy covers?
It covers the insured assets and merchandise against losses listed or not excluded in the policy, depending whether the policy is named perils or all risk and, its very popular in Mexico to group perils as package policies, which mean, all property, casualty and miscellaneous are all included in one single contract.
What does property insurance covers?
This is buildings, contents and Business Interruption, including boiler and machinery are risks, where the insured has to provide with total values, 100% of the replacement cost for fixed assets, annual sales less expenses for BI and net selling price for stock since by definition there is a 100% coinsurance provision, which means that in case of a loss, the insurer will apply underinsurance penalties on a pro rata basis if actual values were larger than sums insured. For casualty and miscellaneous perils such as glass, neon signs, cash & securities, burglary & robbery, their coverage operates on a first loss basis, where coinsurance penalties are nonexistent.
Does burglary is an automatic coverage?
Burglary/robbery/assault is not automatically included in our special all risk form; it has to be added; we suggest to use a limit of what could be taken or subtracted on one truck load. There are several exclusions, for instance, theft from the outside of copper wires and a/c units. As their name suggests it does not cover mysterious disappearance. Different from this, is coverage for cash & securities (inside and outside premises is available), which is only intended for money.
What is the basic peril cover for property?
The basic peril is fire and lightning, and can be purchased stand alone; other perils are the extended coverage (explosion, fallen objects, smoke, vehicles, strikes, rots and civil commotion) plus coverage extensions: FHM which is hurricane, hail, flood, water damage, mudslide, tidal waves as well as quake and volcanic eruption.
What thing is important to consider when insuring Boiler and Machinery?
For boiler and machinery it is possible to get a policy limit but carriers tend to ask not only for the full values of all machinery subject to explosion and breakdown, but also sometimes ask for the list of the equipment; or at least the list of the 3 or 5 main pieces of machinery.
What thing is important to consider when insuring EDP?
For EDP is the same as for boiler and machinery, total values and full listing or key pieces can be requested. Laptops and other movable devices can be insured but this is not automatic and additional information is requested.
What about Casualty Insurance?
In the casualty side, civil general liability, which basic coverage is premises & operations; other extension of coverage includes independent contractors, tenant liability, crossed liability, excess auto, products, finished works, assumed liabilities. Specialties are; professional Liability for most professions, errors and omissions, D & O, Pollution Liability in premises and for Cargo. Especially important when you lease a building is the tenant liability since subrogation rights will be used by the buildings owner insurance.
Are molds, patters and dies automatically covered?
No, it is very important to request in all manufacturing processes, to include (its at no cost) automatically coverage for molds, patters and dies; otherwise, if this is not specifically requested, these are not covered.
Is outside property covered?
This a very important item to ask if the insured has outside property in the open; this is very typical of homeowners, because of pools, “Palapas”, and garden furniture, but it is applicable to commercial lines as well.
What does glass coverage covers?
This coverage is intended for glass that is more than 4 mm thick; all others under this dimension are excluded.
How does Transportation works?
As respects to Transportation insurance, there are stand-alone policies to cover Hull insurance for boats, yachts and aircraft; their liabilities can be included in such policy. Most carriers, even being part of property, treat cargo insurance separately. There are available policies per shipment or preferable annual policies either on a reporting or non-reporting basis. Reporting has the disadvantage that if reports are missing after 30 days they are due and both, coverage and can become inv Policy and coverage can become invalidated by law.
What does a construction policy cover?
This policy provides coverage for constructions - all risks construction- the information insurers will request to quote are a narrative description of the project, timetables or chronogram, expenses/investments forecast, and blueprints. Other available policies are Machinery installation, which basically follows the same pattern as the CAR coverage.
How does Workers Compensation works in Mexico?
In Mexico, the Social Security Institute (IMSS) for employees of the private sector and ISSSTE for the government run bureaucracy, take care nation wide of the workers compensation as well as health insurance, some death benefits and Seniority Pensions. As to work accidents, there is really no options for the private sector, which is not under the network of either one of these Institutes; this is a reality for people who is self employed or patrons business owners, who have to have private medical insurance and fund long term savings.
What happen to people that not qualify for IMSS or ISSSTE?
For people who do not qualify for any of the two giant health providers, in the health side, there is an option called “Seguro Popular”, which by a minimum fee of around $ 100 dollar per year, have the option to go into some specific public health institutions, which will only provide with limited assistance.
Is there any private option?
We have been able to adapt a personal accident program which covers the best private hospitals for 24⁄7 accidents for the private sector which operates as a payment reimbursement and that prevents employers from using IMSS for minor cases, that, will not need to trigger longer term disabilities and this in turn reduces their losses and can reduce the premium charged by IMSS which is very substantial
BONDS
What types of bonds are in the Mexican Market?
There are four types of bonds: Fidelity (theft, fraud, etc), Judiciary, Administrative (performance bonds for construction, tax related obligations, concessions, contract compliance) and Credit ( gasoline credit for gas stations, mainly).
What requirements are need it to obtain a bond?
All bonds require of an application, there has to be a contract, a written agreement, a government resolution or a payment order, an original source, from where right and obligations have to be fully stated.
What information is required to obtain a bond?
In the procedure to get a bond, the guarantor, has to file in advance, all their financial information and general information, “to open a file ” so when the bond is needed it can be issued right away.
What collateral guarantees are need it?
Collateral guarantees are needed at all times, such as an asset like real estate, letter of credit or a cash payment, being an exception to get a line of credit, excellent financial numbers for a well established firm in Mexico.
In case you haven’t found the answer for your question please feel free to contact us, our customer support will be happy to help you.