Mexican law requires that anyone operating a motor vehicle have at least $20,000 in Mexican liability insurance to cover the cost of damages in the event of a traffic accident. Insurance issued by non-Mexican companies often will not cover damages and is not considered valid under Mexican law.
Drivers can purchase full coverage or liability-only coverage for their time in Mexico. Liability-only coverage is restricted to damages to the other car and injury to passengers in that car if an accident is your fault. Full-coverage policies will cover the other car plus damages and injuries to you and your passengers.
In the event of an accident, it is likely that both drivers will be taken into custody until fault is determined. Having proof of liability insurance will shorten the time in custody and prevent jail time. According to the U.S. State Department, if you are found to be under the influence of drugs or alcohol and cause an accident in Mexico, your insurance will be considered invalid.
