I am planning a trip to Cabo San Lucas and need to rent a car. This forum has been helpful, but never completely answered my questions about renting cars in Mexico. As a consequence, I did lots of research about Mexico's car insurance policies and coverage from USA credit cards. This is my understanding.
In Mexico, although car insurance is optional, rental car companies will not rent a car to you until you prove you are capable of paying for any damages "before" you rent the car. This assurance often involves purchasing daily insurance with the car rental. If there is a deductible on the insurance coverage you have chosen, the rental car company may place a hold on your card up to the deductible amount (making that amount unavailable for purchases during your vacation).
Note that rental car companies use a variety of terms for their coverage but essentially they fall into these four categories: (1) Personal Liability, which covers 3rd party damages, including medical costs or other claims/lawsuits against you, (2) "Partial" Loss Damage Waiver (LDW) otherwise known as Collision Damage Waiver (CDW), which includes damages and theft to the rental unit, less a deductible of 10% or 20%, (3) Personal Accident Insurance (PAI) which covers medical costs for the renter and passengers, but not 3rd parties (since that is covered under Liability), and (4) "Complete" LDW/CDW which simply eliminates the deductible from the partial LDW/CDW.
Okay, now for credit card rental car insurance coverage. Some people say they are invalid in Mexico, some say they are not. I have a platinum Visa card through my credit union and I spoke directly with Visa (on a few occasions) to clarify things. I also received a printed copy of the "Auto Rental Collision Damage Waiver Program," which I plan on bringing with me to Mexico to prove I have certain coverage. I found a link to details of coverage here:
It basically says it covers 100% of the damages to the rental vehicle (paid for with the credit card). Note there is no deductible! It also says that the purchase of any LDW/CDW coverage voids the Visa coverage! I figured it is because the purchased coverage simply becomes first priority over the Visa coverage. I then asked a Visa specialist if Visa would cover the owed deductible if I purchased LDW/CDW insurance through the rental car company. My thinking was at least now they would only have to cover the deductible and not 100% of the damages. The response was "No." Purchase of any LDW/CDW insurance eliminates all benefits from the program!
Here are some key things the Visa coverage DOES NOT include: Injury of anyone inside or outside of the vehicle, Personal liability (meaning damages to a 3rd party), coverage within Israel, Jamaica, or Ireland (so yes it is valid in Mexico).
So what does this mean? If you want to use your credit card coverage, you will still need to purchase 3rd party liability insurance to cover any damages you may have to someone else (injury, vehicle or other property). This is also important because this proves to the police that you can pay for someone else's damages. If you don't have this coverage, they may detain you until you can prove you are not responsible or you can pay for the damages. If you are concerned about injuries to you and your passengers, you will also want to buy PAI. My personal opinion is to either use your credit card coverage for LDW/CDW or buy complete LDW/CDW. The reason is because partial LDW/CDW has a very high deductible and with the credit card coverage you have no deductibles (and it includes theft of the vehicle).
If you think you won't sleep well at night because you are worried about eventually having to prove to someone in Mexico that your Visa provides sufficient LDW/CDW coverage, go ahead and buy complete LDW/CDW coverage. This will cost you a pretty penny though and sometimes will double or triple your rental car costs. For me, I just plan on buying 3rd party liability coverage with use of my Visa for 100% LDW/CDW coverage. I will rely on my family health plan instead of the PAI for personal injury.
Here is a summary of the different insurance plans I found in Cabo San Lucas:
Personal Liability is not sold separately – you must purchase "partial" LDW/CDW coverage at $11 a day, which includes damage on third parties (including collision and medical) as well as damage and theft to the rental unit. The deductible for partial coverage ranges from $1,500 to $4,000, depending on the vehicle. That means there is no way to use your credit card coverage with National, since the liability coverage also includes LDW/CDW, which voids your credit card coverage! The main drawback here is that your credit card would have covered 100% of the vehicle damages/theft, where now you still have to pay a significant deductible. Partial LDW/CDW and PAI can be purchased together for $15 a day or you can purchase "complete" LDW/CDW with PAI for $22 a day, which eliminates the deductible. Although it is a drag they don’t offer 3rd party liability by itself, their total coverage of $22 is at least somewhat reasonable.
Avis is one of the only companies that "includes" 3rd party liability insurance, which is relatively small - up to MXN 350,000 (approximately $33,000 USD). Unfortunately their rental rates are also typically higher. In this case, most credit cards will cover 100% of all other damages "to the vehicle" (including theft). Medical expenses to the renter and passengers are not covered, however. For that coverage, you need to buy PAI for $4 a day. If you and your passengers are on a health plan, this probably isn’t a concern for you. Note that 3rd party health costs are covered in the liability insurance. If you want additional liability insurance up to MXN 5,000,000 (approximately $470,000 USD), it will cost you an additional $11 a day. Partial LDW/CDW ranges from $14 to $21 a day with a deductible ranging from $1,000 to $3,000, depending on the car. Complete LDW/CDW will run between $20 and $27 a day, depending on the vehicle.
Third party liability is offered for $11 a day and includes coverage up to MXN 950,000 (about $90k USD). Partial LDW/CDW is offered at $24 a day with a 10% deductible (on vehicle value) for accidents and a 20% deductible on total loss or theft. Personal accident insurance (PAI) is $4 a day and covers up to MXN 200,000 per event (about $19,000). Complete LDW/CDW costs $30 a day. Evidently Thrifty requires you to purchase 3rd party liability if you do not purchase the partial or complete LDW/CDW, which leads me to believe their LDW/CDW may include 3rd party liability, but I cannot confirm that.
I could not determine the cost of 3rd party liability – I have to call the Mexico office and cannot get through with their (624)146-0700 office number. Partial LDW/CDW is $11 a day and covers the costs of theft and accident, less a deductible ranging from $1,500 to $4,000. Personal Accident Insurance (PAI) is $4 a day and covers medical costs to the renter and passengers only – up to $9,000 (per event?). Complete LDW/CDW does not eliminate the deductible for theft and costs an extra $7 a day ($18 total). So CDW + PAI + EPC is $22 a day, but you would still have to pay a deductible in the event of theft. Also, this does not cover the most important thing - 3rd party liability.
Could also not determine if Payless offered any coverage for 3rd party liability since I cannot dial internationally. Their office number is 011 52 624 1465290, if anyone can help here. This may also only be offered at the counter in Mexico. They do offer partial LDW/CDW at $14 a day with a deductible of 10% of vehicle's value. For complete CDW/LDW, it will cost you $23 a day. PAI is an additional $3 a day. At Payless, if you cannot provide proof of insurance coverage, you must pay for the partial CDW.
For most Dollar insurance coverage, you need to inquire at the counter. The only stated coverage is Partial LDW/CDW, which ranges from $14 a day to $17 a day, depending on vehicle type. It has a 10% deductible on damage on 20% deductible on theft.
I didn't look at some of the other renters, such as Hertz, because they were way more expensive at the time of my quotes. If anyone else has something to contribute based on personal experiences, please let me know! Also, if you can find out the liability coverage costs for Advantage, Payless, or Dollar, please report it.