Personal Automobile Insurance for Mexico
Non-Admitted Insurance Laws in Mexico
In Mexico, Non-Admitted Insurance is addressed under Article 3 of the General Insurance Law. In summary, this article prohibits insurance transactions for risks in Mexico with foreign (nonadmitted) Insurance Companies. Even though the Law provides for certain exceptions, it pretty much requires that any and all
insurance must be contracted with Insurance Companies admitted in Mexico, to the extent that coverage is available in the Mexican Insurance Market.
Penalties for violating Non-Admitted Insurance Laws in Mexico Under the Mexican Legal System, which is more like the Napoleonic Code, as opposed to the Common Law System in the USA, penalties for violations of the Law are very clearly typified' and stipulated. The General Insurance Law, under article 141, establishes the penalties and crimes for violations to article 3, which regulates non-admitted insurance. Specifically, article 141, under fraction II, stipulates that any person who violates the prohibition to contract insurance with foreign companies will be sanctioned with:
Imprisonment for a term from 3 years to 10 years; and
A fine between 200 and 2,000 Daily Salaries.
CALIFORNIA CODES INSURANCE CODE SECTION 11580-11589.5
11580.6. Where a policy of liability insurance covering the ownership, maintenance, or use of a motor vehicle or aircraft contains a provision indicating that coverage is extended to accidents, occurrences, and loss arising in Mexico, the policy shall contain an additional provision, either on the face of the policy or by an endorsement attached thereto stating as follows:
WARNING
Unless you have automobile or aircraft insurance written by a Mexican insurance company, you may spend many hours or days in jail, if you have an accident in Mexico. Insurance coverage should be secured from a company licensed under the laws of Mexico to write such insurance in order to avoid complications and some other penalties possible under the laws of Mexico, including the possible impoundment of your automobile or aircraft.