Health Insurance

As with most other things, if you are someone with a preexisting condition, if and how you are accepted for private health insurance will be determined by the companies you apply to and the condition(s) that you may have.

Uninsurable Conditions: These conditions appear on a list provided by each insurance provider, and it varies between companies. If you already have one of these conditions unfortunately you would not be eligible for insurance with that specific company. They usually include the more severe illnesses like Parkinson’s, Fibromyalgia, Insulin-dependent Diabetes, Alzheimer’s, etc. A person must be Cancer-free for at least 10 years to be eligible for insurance with most companies.

If you have a preexisting condition, but it does not appear on that list, then you are still eligible for insurance. These conditions are taken on a case-by-case basis, so it is hard to know up-front how your condition will be accepted. The best we can do is submit an application, and then most companies will ask for some lab testing and a medical history report completed by a physician. They may also ask for supplemental forms to be completed regarding the specific condition, as well as any past documents that outline the diagnosis, treatment, evolution and current condition of the illness. Based on this information they make their decision. The common outcomes we see are:

  • The condition gets included in the coverage like normal
  • The condition is included in the coverage, but with a higher deductible, extra premium, or lower sum insured maximum
  • The coverage is permanently excluded from coverage
  • A moratorium is placed on the condition, in which case it starts off excluded, but can be reviewed at each renewal, with updated medical information, to determine if it can be included in the coverage

Age Limit of Acceptance: With both annual private medical insurance and travel medical insurance there are age limits for acceptance. With the private insurance, if you are accepted for a policy by that age, you are able to renew for life. The company cannot cancel you due to age. With travel insurance, once you reach that age limit you are no longer eligible for their insurance, so you cannot get a policy with them. The age limits very for both private and travel insurance, depending on the company, but generally the range is from 65-75 years old. So if you get travel insurance until you are 75, you are no longer eligible for any type of insurance because the cut off age for the private insurance is also 75.

Length of Coverage: With private insurance, once you are accepted you can renew your policy for life. The insurance company cannot cancel the policy due to age or use of the policy, etc. The only reason the policy can be cancelled by the insurance company is because of a lack of payment. With travel insurance, most policies can be bought for 365 days at once, but you can only have coverage for 2 consecutive years at a time. After the 2 years you would need to switch to another company for 1 year, before you could go back to the first company for another 2 years

Renewing vs. Repurchasing: Whether you only buy a travel policy for the few weeks or months per year, while you are out of your home country, or if you plan to use travel insurance as an annual plan in place of private insurance, you are never able to renew a travel insurance policy. It is always considered that you are purchasing a completely new policy. Because of that you are never able to accumulate seniority or any benefits that you normally get with private insurance as you renew your policy through the years.

Preexisting Conditions: As a continuation of the above point, because you are not renewing a travel policy, preexisting conditions are treated differently. With private health insurance, once you are covered by a policy, any injury or disease would be covered for the life of the policy (to the maximum sum value contracted). With travel insurance there are 2 examples of the difference. You buy a travel policy to cover you abroad for 5 months. Then you go back to your home country, so you no longer have the policy. If in that time you contract any disease or suffer any injury, the next time you go to purchase a travel policy to travel abroad, any medical expenses related to those conditions would be excluded as preexisting conditions. It works the same way if you use travel insurance in place of private insurance. Even if you have a travel insurance policy for 365 days, and buy a new policy to start on the 366th day, so there is technically no lapse in coverage, because you are repurchasing and not renewing, any conditions that may have been covered by the prior policy would now be excluded as preexisting conditions by the second policy.

There are 2 main ways that deductibles work with private health insurance in Mexico:

Per Year: This means that your chosen deductible will replenish at the renewal every year. It also means that ANY incurred medical expenses throughout one policy year can be added towards this deductible. The benefit of this option is that you are only needing to meet 1 deductible every year.

Per Event: This means that you need to reach your chosen deductible for each separate illness or disease. But these deductibles expand through the years, and that is where the benefit of this option comes in. If you contract a major disease like Cancer, instead of needing to meet a new deductible every year, you just meet the deductible 1 time for any Cancer-related costs, and then the Cancer is completely covered by the company for the life of the policy.

Also most deductibles are per person, however with certain companies, if there is a family group of 3 or more people on the policy, they reduce the deductibles to 2 or 3 per family unit.

The actual deductible options vary by company but can go as low as 250 USD per year, and as high as 10,000 USD per year.

All private health insurance providers have a waiting period for certain diseases. A waiting period means that once you are accepted under a policy, and coverage begins, you cannot be diagnosed with any of these certain illnesses until the waiting periods have expired. If you are diagnosed with a disease before its waiting period has expired, this disease would be permanently excluded from coverage as a preexisting condition for the life of the policy.

The waiting periods vary by company. Some of the more elite providers have a standard 60 day waiting period for all diseases. So have them leveled off, like for example, 3 months for kidney stones and mental disorders, 6 months for heart issues, 1 year for cancer, etc. HIV/AIDS is almost always 2 years.

When applying for a new private insurance, if you will be insured with a different private insurer until the time you are accepted by the new company, most companies will let you transfer your seniority to them. That means that any consecutive months or years you were covered by your old policy can be carried over to the new policy to eliminate that amount of time off any waiting periods.

Travel Insurance

Application process: While a health insurance policy needs you to fill out an application, send it to the insurance provider, and for some preexisting conditions the process may take a couple weeks, with a travel insurance policy things move a lot faster. This is a great benefit if you’re only looking for medical coverage in a brief period of time or a maximum of one year. Just keep in mind that a travel insurance company would exclude your preexisting conditions completely, or provide minimum coverage if specified by them.

Deductible: Most insurance policies come without a deductible, so your medical emergency would be covered in full and the cost of the policy would be the only premium you would have paid out of your pocket.

Lower premiums: Because you’re only looking for emergency coverage for a short term, and the insured amount is lower, the premiums of a travel insurance policy would be lower too.

Medical Evacuation

No. Medical Evacuation companies usually offer coverage only for the service of flying you back to your home country, but all hospital and doctors’ expenses before that have to be covered by the insured.

You are flown back to the hospital or medical facility in the USA or Canada that you elected when you contracted the policy. This benefit differs from the Medical Evacuation coverage on a private health insurance policy. The private health medical evacuation coverage will only evacuate you if the facility you are in cannot deal with the situation you are facing, and at that time, you will only be taken to the closest facility capable of treating you.

Mexican-Plated Auto

Very similar to the US, Canada and other countries, auto insurance in Mexico has 3 general levels of coverage. They are:

  • Basic: The basic coverage includes third party liability coverage, occupant medical expense coverage, legal assistance and roadside assistance
  • Limited: The limited coverage includes everything in the basic coverage, as well as total theft of the vehicle
  • Full: The full coverage includes everything in the basic and limited coverage, as well as total and partial damages to the vehicles

In regards to the coverages in the 3 different levels of policies, the only deductibles are for damages to the vehicle, theft of the vehicle, and glass breakage.

 Material Damages: 5% of the total value of the vehicle

Total Theft: 10% of the total value of the vehicle

Glass Breakage: 20% of the value of broken glass

In Mexico, there is no federal law or regulation requiring all motorists to carry third-party liability insurance. This coverage is regulated by each individual Mexican state, meaning that the minimum required amount of liability coverage will vary by state, with sum states not requiring the coverage at all. The standard amount of liability coverage that we give our clients is 3,000,000 to 4,000,000 MXN, but that value can be increased upwards towards 9,000,000 MXN. That value is per event, and covers property damage, bodily injury and death to third parties outside the insured vehicle.

There are 3 main ways that the vehicle value can be determined:

Commercial Value: Having your vehicle insured this way means that you will not see a vehicle value stated on your policy, but instead you will just see it listed as “amparada” or covered. This means that the premium you paid for the policy was based on the commercial value of the vehicle at the time. It also means that in the event of a claim the insurance company will pay out the commercial value at the time of the claim. Commercial value is determined by a Mexican system, similar to Kelley Blue Book, that the Mexican insurance providers use with the Vehicle Identification Number.

Fixed Value: Having your vehicle insured this way means that you will see a stated MXN value for your vehicle on the policy. This means that the vehicle value on the policy stays the same throughout the entire policy year, and then at the renewal the depreciation is applied, and a new value is placed for the next full year. This is different to the commercial value listed above, where the vehicle is depreciated throughout the policy year.

Factura Value: If you are purchasing a new vehicle from a Mexican dealership, you will get a factura, which is a formal invoice. As long as the vehicle year is of the current year or 1 year older, and the factura is not more than 30 days old, we can send it to the insurance company and they will place the vehicle value on the policy as the same value you paid for the vehicle.

As long as you purchase a full or limited coverage policy, there should be an occupant medical expense coverage included. This provides coverage for any medical fees related to any accidents that people may suffer while inside the insured vehicle. The standard amount we give for this section is 200,000 MXN, but it can be decreased or increased with a corresponding effect on the premium. It is also important to note that the sum insured value is the maximum value the company will pay out for all people in the vehicle combined, per event. The value is NOT per person.

Even the most basic policies will include some form of roadside assistance. The coverage of roadside assistance encompasses a variety of different services that most people are not aware of. Obviously these services vary by company. Some of the services that are commonly included are:

 A locksmith if you lock your keys in the vehicle

 A tow truck

 Someone to bring you gas if you run out

Death of the Driver: Similar to a small life insurance policy, this coverage will pay out a contracted amount, in the event that the driver of the insured vehicle dies in an accident, to help with funeral expenses and other related expenses. This coverage is usually very inexpensive at 50 MXN onto the premium for every 50,000 MXN in coverage desired.

Transportation Expenses / Total Loss: This coverage will provide compensation for transportation expenses (usually a rental car) ONLY if the vehicle is declared a total loss. The compensation is usually set for a maximum number of days and/or a maximum MXN payout value.

Transportation Expenses / Partial Loss: Similar to the total loss coverage, this provides transportation expenses if the insured vehicle is in the shop being repaired due to partial damages.

Passenger Liability: This coverage is beneficial if the vehicle will have consistent third-parties that are not of any close relation to the insured person. It provides protection against any legal action that these persons may take against you for injuries suffered in the vehicle. This is commonly used when people have a rental unit and include a vehicle for their renters to use, or when people have a business and are transporting paying clients from one point to another.

Cancellation of Deductible: This coverage comes in many forms. Essentially it is contracted so that you do not need to pay the deductible of the policy (which is listed above). Some many only come into effect if you were in an accident with another vehicle, some will include coverage for roll-overs, some will include coverage for accidents with stationary or semi-stationary objects. Some will only take effect if the amount of damages is greater than the deductible (5% of total vehicle value). Some will only cover the total theft deductible (10% of total vehicle value).

Partial Theft: The theft coverage that comes standard on all policies is for total theft of the vehicle, and does not cover partial theft. The partial theft coverage covers things like rims, mirrors, hood ornaments, stereo systems, etc. Anything that is attached to the vehicle. Most times it only takes affect if the items were stolen without the vehicle being moved from where it was parked, and also if the claim was filed before it was moved or driven. This coverage does have a deductible and it is usually 20% of the value of the stolen items. It is important to note here that personal belongings (iPod, GPS, purses, etc.) are NOT covered by this. There is no such coverage offered with auto insurance policies.

Some Mexican insurance companies will include some type of USA and Canada coverage in their policy for Mexico, at no extra cost. All you need to do is ask for the form that shows that coverage. Other companies will include coverage, but at an extra cost, so this coverage needs to be requested before the policy is issued, to make sure it is included. With the companies that include USA and Canada coverage for free in their Mexican policy, the coverages and term you get vary by company. Some companies will only offer liability coverage in the USA and Canada, and some will extend the full coverage to the USA and Canada, as long as that is the coverage that was contracted for Mexico. The term can also very. With some companies the free coverage is only meant for short trips, of no more than 30 days in the USA and Canada. Others will be for the full year.

Besides the coverages that can be included in the Mexican policy, some companies offer various strictly USA and Canada policies, which need to be purchased for a full year and are non-refundable. These policies are also usually very inexpensive, at about 100 to 300 USD annually, depending on the coverages you want. Usually the options will include liability, occupant medical expenses, legal assistance and roadside assistance, but not all will cover your vehicle against damages or theft.

Foreign-plated Auto

These policies can be bought for 1 day up to a full 365 days at one time. In most cases, the set terms of 6 months and 1 year will always be less expensive than terms for a set amount of days. For example, a 6 month policy is usually less expensive than a policy for 129 days (just over 4 months).

However, the length of time the policy will legally cover you is determined by the length of time the temporary import permit on your vehicle has been issued for. That is determined by your personal residency status. If you have a 6-month tourist visa, your vehicle’s temporary import permit and insurance policy are good for 6 months as well. If you have your temporary residency you can get an annual temporary import permit and insurance policy. If you have permanent residency status you are legally required to legalize your vehicle, so it has Mexican plates, in which case you need a different type of auto insurance policy.

The extent of the optional coverages or special features that are available to you will vary depending on the chosen insurance provider. Some of the main additional coverage include, but are not limited to:

 If you are going to be towing something behind the insured vehicle, coverage for that can be provided as well. This includes other vehicles, motorcycles, ATVs, boat, campers, travel trailers, etc.

 Motorist Deductible Waiver: Most companies provide this as an option to be added on the policy at an additional cost. This coverage lets you waive the stated deductible should you be in an accident with someone with no insurance and it is determined they are at fault.

 Territory Extension: If needed, some of these policies will even provide some form of coverage for these vehicles back in the US or Canada. Most times coverage for the vehicle is provided, but liability coverage is not, in which case you would need to purchase a small liability policy from one of the many providers along the border.

 Vandalism Coverage: Some policies will have this automatically included, and some need to be requested and will have an additional premium. This coverage also has a deductible that can be either a set value or a percentage of the damage done.

 Transportation Expenses: This usually means a rental car. This coverage usually needs to be added for an additional cost, and will cover transportation expenses up to a certain value or a certain amount of days. Sometimes this coverage will only come into effect if the vehicle is a total loss.

Property Insurance

When you are looking at how to insure the structure of your property, there are a few different methods that can be used:

Replacement Value: The best way to determine this value is to take the number of square feet (or meters) and multiply that by the cost of construction per square foot (or meter). The other way, which is not as recommended, is to list the price that you paid for the structure.

Market Value: To determine this value, you need a realtor to come to the property and appraise its market value based on many different factors. The insurance companies will not do this for you. The biggest situations where we see this used is when people own a condo unit. Sometimes the homeowner administration board of the condominium will have a master policy on the structure in place, and sometimes they will not. If they do not have a master policy, and the condominium takes major damage, because there was no insurance policy in place, they may decide not to rebuild at an out-of-pocket cost, in which case your unit would not be rebuilt, so it would be better to have market value, so you can buy a similar property in the area.

It is important to note here that we cannot under-insure structures. It is best to list the value at 100%, but in the interest of reducing the premium, we are able to go as low as 70% of the total value. In doing that, we still need to notify the insurance company of what the 100% value is. If we list a value that is anything lower than 70% of the total value, they will consider it under-insured, and you will only be compensated a value which is proportional to the value we insured it at versus the total value.

Property insurance in Mexico is one of the few types of insurance that has co-payments as well as deductibles. Below is a brief example to show you how each of these would be applied to your claim.

For hurricane/severe weather coverage the standard deductible is 2% and the standard copayment is 20%. So, let’s say you insure the structure of your home for 100,000 USD, and it takes some rain and flood damage for 50,000 USD. The deductible is applied to the total value of the structure (100,000 USD), so you would need to pay the first 2,000 USD. That 2,000 USD is subtracted from the amount of damage leaving the new damage total at 48,000 USD. Of that 48,000 USD you pay the 20% copayment, which is 9,600 USD. So in total, you pay 11,600 USD of the damages and the insurance provider pays the remaining 38,400 USD.

The 2 biggest deductibles and copays are the hurricane/severe weather and earthquake/volcanic eruption coverages for the building structure and interior contents. The basic fire and lightning coverage should have no deductible or copay, and neither should the liability. The other smaller coverages may or may not have deductibles or copays, and if they do, they are usually percentages of the total damage

Structure: This section provides coverage to the external, and sometimes internal, structure of your home or condo/apartment unit. It is important not to include the land value when calculating this value.

Contents: This section provides coverage for ALL contents and personal belongings within the unit. This includes A/C units, kitchen appliances, electronics, furniture, clothes, etc.

Third-Party Liability: A minimum amount of liability coverage is required on all property insurance policies. It is usually rather inexpensive at about 10 USD for every 100,000 USD in coverage. This provides coverage in case any third party may come on your property and get injured and try to take legal action against you. Especially in condo units it is also important to make sure this coverage includes “Cross Liability”. This provides coverage in case something originating in your unit causes damage to the surrounding units. The most common example is a water leak. If you are a renter, it is also important to ask for “Renter’s Liability” so you are protected against any damage you may do to the property you are staying in.

Outdoor Constructions: The values of any outdoor constructions on the property need to be accounted for separately, and should not be included in the structure section value. This includes pools, palapas, casitas, retaining walls, etc. as well as things that may be attached to the main structure, such as solar panels, terraces, patios, etc. To provide coverage for all items we need a list of each item and its corresponding individual value.

Severe Weather/Hurricane: The three above coverages have the option to have this coverage included or excluded on the policy. In some areas of Mexico, this coverage may not be offered to properties within a certain distance of water, or it will not be offered during hurricane season. It is important to remember that this is not JUST hurricane coverage, but it also includes damage from wind, rain, flooding, mudslides, etc. This coverage usually makes up a bulk of the policy premium.

Earthquake/Volcanic Eruption: Similar to the severe weather coverage, this coverage can be either included or excluded for the structure, contents and outdoor construction sections.

Betterments and Improvements: This coverage applies to condo units more than anything. If you buy a unit and then do any remodeling or make any upgrades, these costs, and increase in value, need to be accounted for in this section. This includes things like new cabinets, new flooring, new countertops, etc.

Extra Living Expenses/Loss of Rental Income: This coverage will take effect if you are not able to live on your property, or rent it out, due to damages or repairs to damages covered by the policy. Generally we can place an amount for either 3, 4 or 6 months, and we need to specify which. For the extra living expenses, hotel and other accommodation receipts will be required in order for the company to reimburse you. For the loss of rental income you will need to provide proof the property was being rented (rental agreement), or proof that had it not been damaged it would likely have been rented out during that time (past rental history).

Glass Breakage: Any major damage to exterior windows and doors is generally covered under the overall structure section mentioned above. This separate glass section provides coverage for two other things. The first is minor damage to exterior windows or doors. So for example, a coconut falls through a window, or a kid throws a rock through a window. Usually when just 1 pane of glass is damaged. The second is interior glass. Most commonly this is shower doors and enclosures, but can also include any large mirrors, glass banisters or railings, etc. This coverage, along with the severe weather and earthquake coverages, are usually the three most expensive on any property policy.

Power Surge: Your electronics are covered against any major damages in the general contents section mentioned above, except power surges. This coverage is usually very in expensive and well worth it. It is important to include A/C units, kitchen appliances, washer/dryer, TVs and other electronics, etc.

Theft of Contents: The general contents section above covers damages. This section covers theft. It is generally recommended to put a value of about 10-20% of what you listed in the general contents section, as it is unlikely all of your belongings will not be stolen. It is important to make sure this coverage is not limited to “forced-entry” theft. That means that if your belongings are stolen and there is no sign of a forced entry, you would not be covered. So if they came in through an open window or your door was left unlocked.

Cash and Valuable Documents: This section is a sub-limit of theft of contents, so its value can never exceed the theft of contents value. This is to cover small amounts of cash (up to 10,000 USD), and any valuable documents that may be kept on the property at a given time.

Artwork/Jewelry/Collectibles/Memorabilia: This section is a sub-limit of theft of contents, so its value can never exceed the theft of contents value. For these items to be covered by the policy, at the time it is issued we need appraisals, descriptions, and photographs of each item.

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