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Mexico Insurance and Credit Card Coverages REVISED

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San Diego...
posts: 204
reviews: 3
Mexico Insurance and Credit Card Coverages REVISED

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:

…visa.com/personal/…anchor_4

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:

National Car

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

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.

Thrifty

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.

Advantage

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.

Payless

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.

Dollar

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.

Thanks!

277 replies to this topic
Cabo San Lucas...
posts: 7,287
1. Re: Mexico Insurance and Credit Card Coverages REVISED

JCL,

WOW, it is obvious that you have spent a great deal of time and energy researching this much debated topic and i am confident that many will benefit from your exhaustive research. I will confess that this level of research and dissection is a bit lost on someone like me as i err on the side of caution and when on holiday do not want to expose myself or anyone else to any risk or potential liability so i have simply chosen to pay the few pesos to get the full pop for the Mexican insurance regardless of the potential coverage by credit card companies or the like. I have spent a great deal of time in Baja and have seen and had first hand knowledge of the woes of folks who were involved in disputes of this regard and i have elected to avoid this by the path of least resistance. It occurs to me that most people go to Cabo for a week or two and that the savings in money,time and worry may not be worth the intense focus on an expense that amounts to a few dollars a day. I rent in Los Cabos a lot and a 10 day rental with all of the Mexican insurance for a compact car cost about 300.00. No doubt i could shave a couple of pesos off of this, but for me it is not worth the effort or risk. It occurs to me that some people research their vacation into nonexistance. This is not a slam just to say that : its a rental car not a rocket ship and unless you want to obcess over a couple of dollars, is it really worth all of this microscopic examination when all you have to do is give the man a credit card and pay the 12.00 a day, go your way and enjoy? I have driven from Baja Norte to Baja Sur many, many times and owned vehicles in Baja Sur, rented cars there more times than i would care to remember and, thank God i have never had an accident but when i rent a car on a vacation in paradise a long way from home i want to enjoy all of what is there and not have a single worry about any complication so i have chosen to pay this small amount and enjoy my travels. I do thank you for what is no doubt the most comprehensive accounting of Mexican rental car insurance ever posted on this forum and apologize if you think my response is foolish or insensitive. I did not intend it that way. I wish you happy travels and Buena Suerte..... jim

Parker, Colorado
posts: 166
reviews: 13
2. Re: Mexico Insurance and Credit Card Coverages REVISED

YM, Would you recommend a specific rental - planning to rent at airport?

Cabo San Lucas...
posts: 7,287
3. Re: Mexico Insurance and Credit Card Coverages REVISED

barclay,

We have been using Advantage though most all are good. their office is a few paces from the terminal and i have never had a problem with these people. Book online and print out your confirmation to take with you. you will need to pay for whatever Mexican insurance you elect to purchase when you get there as this is not something you can do online. The originial poster had some outstanding information and in extrordinary detail. i am confident there is much to be learned from his post. Buena Suerte... jim

Parker, Colorado
posts: 166
reviews: 13
4. Re: Mexico Insurance and Credit Card Coverages REVISED

Thanks YM, will do - like you I plan to go the easy route with insurance - don't want to think about it on vacation.

San Diego...
posts: 204
reviews: 3
5. Re: Mexico Insurance and Credit Card Coverages REVISED

Yachtmerchant, I have always felt like the daily car rental insurance is a scam, both in the USA and in other countries including Mexico. My main goal was simply to understand what coverage I have through my credit card and what coverage I "need" to purchase in Mexico. If it was just a few dollars a day for full coverage, without a doubt I would take full insurance. What I have found is that it costs $30 a day (or more) for full Mexico insurance coverage. It's hard to swallow that given the daily rental cost on the vehicle is often only $10.50 a day. For a one week rental, I would pay more for Mexico auto insurance than I do for my full year's worth of USA insurance through Wawanesa!

I appreciate your opinion and I understand some people are more "risk averse" than others and would rather just pay up the extra money. For people like me, I would rather get educated about what is covered through my credit card and determine what I need to buy in Mexico. I'm also on a budget and can't justify renting a car with an extra $30 a day for insurance. We are now talking $300+ for a week rental versus $100 to $150. With that cost, I would be swayed to just take the shuttle to my hotel and then occasional taxis to downtown.

Yachtmerchant, if you can find full Mexico insurance for just $12 a day, including no deductibles, please let me know where!!! For me, I plan on just paying for the personal liability insurance, which is $11 a day through National. Pease note that I AM NOT advising people to not buy any Mexico insurance. I am simply saying don't pay for anything that is covered through your credit card, so you only need to buy the personal liability (or PAI if you want). And since I have provided a link to Visa's LDW/CDW insurance coverage, I don't know how Visa's credit card coverage can be disputed?

The importnat thing is, if you buy any LDW/CDW coverage, you get no benfits from the visa card progran. So if you buy partial LDW/CDW in Mexico and your vehicle is stolen or totaled, you will still have to pay up to $4,000 with your 10% to 20% deductible (no credit card coverage on this, now). If you had only purchased personal liability and used your credit card coverage, you would have to pay nothing for the stolen or totalled car.

I was totally frustrated at not being able to find good information on the web about Mexico insurance requirements. Yes, It took me a few hours of my time to get to the bottom of this and that is why I posted such a lenghty message. I just want to be a nice guy and pass on the information I gathered to others that may be in my same situation.

One other thing I have found out. Sometimes in Mexico they may still insist you need the extra coverage even though it is stated as optional inthe agreement. Since it is so costly, the agents often have relationships with timeshare companies and will offer to provide the insurance "for free" if you attend their timeshare presentation.

San Diego...
posts: 204
reviews: 3
6. Re: Mexico Insurance and Credit Card Coverages REVISED

I need to correct something. The $11 a day liability coverage is through Thrifty, not National and it is the only rental company that I know of that allows you to purchase the coverage "online" in advance (at www.thrifty.com). This provides some comfort for me, because I don't want someone telling me liability is $20 a day once I get to the counter.

Make sure you read the Thrifty terms and conditions and it will state the following:

* Optional Third Party Liability - cost USD 11.00/day. It is a protection that extends the coverage of legal liability up to MXN 950,000.

Cabo San Lucas...
posts: 7,287
7. Re: Mexico Insurance and Credit Card Coverages REVISED

JCL,

I think i made it clear that your reseach was outstanding and that many would greatly appretiate all of your efforts. I stated this again in my response to Barclay and i also explainded that i was simply stating my opinion and not denegrating your post or your intent. If you are offended by this there is nothing i can do. Buena Suerte....... jim

Sun City West
Destination Expert
for Rosarito
posts: 4,194
reviews: 47
8. Re: Mexico Insurance and Credit Card Coverages REVISED

I, too, did this kind of research; therefore, I rent from Avis (so the liability is included in the base price--that way it does not negate the credit coverage). I use my credit card coverage because if there is a problem, I want Mastercard/Visa/American Express behind me, not some insurance company I can't deal with adequately because my Spanish is pitiful. I have more faith in the power of a major credit card company to resolve the differences (if there are any) than I do in my ability to resolve the issues.

For the Mexican police, the insurance that is important is the liability; the lack of liability insurance can get you taken directly to jail--so that I want as a part of the rental insurance from the local company, hence Avis for me. By the way, once the liability charges ($5.00-$7.00 a day) are added to the rates you are quoted from other companies, I haven't found Avis to be higher.

Pat

San Diego...
posts: 204
reviews: 3
9. Re: Mexico Insurance and Credit Card Coverages REVISED

Yachtmerchant, I take no offense in your response and I hope I didn't come across that way. Someties it is hard to determine teh tone of a message when it is being read and not said. The main reason I responded was because I felt that even though your intent was good, I think your response was a little misleading – mostly by saying the insurance cost is just "a few pesos" or "a few dollars a day." For many people, the difference between the advertised rate and the all-in cost with full insurance and taxes is substantial enough to choose against renting a car. I would hate for people to realize this after they made plans and arrived at the counter when it may be too late to avoid any cancellation fees. At Advantage, for instance, you would have to pay $18 a day for complete LDW/CDW (except theft) plus $4 a day for PAI, then an additional $14 a day for liability (as stated over the phone). That’s $36 a day plus 10% airport access fee and 10% value added tax. Now we are looking at an extra $43.20 a day (about 460 pesos a day) for full coverage - and you still may be liable up to $4,000 if your car is stolen! So now, the advertised $10.50 a day rate jumps to $55.80 a day (including taxes), much more than a few pesos difference.

As a local expert in the Cabo San Lucas forum, I also think people will naturally respect your opinion more than others. I think I have read most posts in this forum about Mexican insurance and you regularly respond by suggesting people play it safe by paying up and taking out full insurance. Although I think it is great you take the time to post information for people, I think that over and over again, you are unintentionally placing unnecessary concern on having people use their credit card’s LDW/CDW coverage.

I personally know I will sleep better at night during my vacation knowing that I didn’t buy Mexican LDW/CDW insurance. Why? Because I did my homework and know that I have 100% credit card coverage on the vehicle – even if it is stolen. With Advantage’s full coverage, it would void my credit card protection so I would still have to pay up to $4,000 if the car was stolen. That really bothers me. And with Advantages partial coverage, in all instances, I would be responsible for the first $1,500 to $4,000 in damages. What kind of insurance is that? The only way that insurance would be beneficial is if I pretty much totaled the whole car. So for me, renting a car with the Mexican LDW/CDW insurance would still be a pretty big gamble.

Another thing that seems misleading is your statement that "a 10 day rental with all of the Mexican insurance for a compact car cost about 300.00." I would be curious to know what coverage you actually had? I think you may have had much less protection than you thought - given the full insurance coverage at Advantage currently costs $432 over a 10-day period. If you add the $13 a day compact car rental price, plus the 20% in taxes, the total 10-day rental cost should be $588, which is almost double what you stated.

Pstreet1, you also make a good point. If there were damages to your vehicle, would you like to work with an American based global corporation such as Visa International or would you want to go through a Mexican car rental franchisee and/or the Mexican insurance company they have chosen?

I also wanted to add that I have fished in Cabo a couple of times with an American guy that owns a sportfishing fleet. I gave the owner a call and asked him what he can tell me about rental cars and Mexican insurance. He said he tells all of his American clients to use their credit card’s coverage for the car, but make sure you purchase the 3rd party liability insurance, since that policy will prevent you from being retained by police if there is a dispute between you and someone else. He said police do not care about accidents that only involve your own vehicle, since it is clear that you will be responsible for paying for those costs.

Cabo San Lucas...
posts: 7,287
10. Re: Mexico Insurance and Credit Card Coverages REVISED

JCL,

i appretiate your clarification. This is very useful information and i certainly do not want to mislead anyone about anything so thanks for your detailed report. Buena Suerte....... jim

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