Car Rental Insurance in Mexico: Do You Need It? How Does it Work?

PUBLISHED ON Mar, 05 2023


The Importance of Car Rental Insurance in Mexico

When renting a car in Mexico, it is important to be aware of the mandatory insurance requirements, as well as the options for additional coverage. In Mexico, there are two types of car rental insurance: collision damage and liability insurance. Mexican car rental rates usually do not include insurance, which means that declining coverage can be a potential minefield.

Mexican car rental companies are required to provide basic personal liability insurance, but it is recommended to purchase additional coverage for collision damage, as it is not mandatory and can become an enormous sum if a security deposit is held. It is worth noting that many U.S. car insurance policies do not provide coverage in Mexico, so it may be necessary to purchase additional coverage.

Some rental car companies may automatically include mandatory insurance in their rental rates, such as Sixt which offers Third-Party Insurance at check-out to cover personal injury claims or material damages caused to the other driver. It is also important to have proof of separate insurance plans and double-check with the rental car company before picking up the rental car.

Types of Car Rental Insurance in Mexico

A Collision Damage Waiver (CDW) covers the cost of damages or losses incurred to the rented vehicle in the event of an accident or other damage. However, it only covers the rental car and does not include liability for any injuries or damages to other cars, property, or people involved in the accident. CDW may not cover all types of damage, such as damage to the tires or windows. The cost of the waiver may vary depending on the rental company and the type of car being rented.

Loss Damage Waiver (LDW) is a combination of CDW and Theft Protection that typically provides coverage for losses or damages incurred by the rental vehicle in the event of an accident or theft, as long as the renter has not violated the rental agreement’s terms and conditions. LDW is not mandatory, but it can waive your financial responsibility for any damages or losses that may occur to the rental vehicle during the rental period.

Supplemental Liability Insurance (SLI) provides additional liability protection to the driver of a rental car. The coverage limits for SLI can vary depending on the rental agency and the statutory limits of the country in which the rental takes place. SLI is an optional service, and it is the responsibility of the driver to carry insurance to protect.

Personal Accident Insurance (PAI) provides coverage for accidental medical costs, emergency care, and accidental death resulting from an accident. PAI typically insures drivers of a rental car and their passengers during a rental trip. The coverage limit of PAI may vary depending on the specific policy and insurance provider. It is important to note that PAI only covers accidental injuries resulting from an accident and not sickness or natural causes.

Car Rental Insurance Mexico Cost

The basic insurance that is required by law in Mexico is often included in the rental cost. However, this coverage is limited, and rental companies may try to sell you additional coverage to increase your protection. This additional coverage can include SLI (Supplemental Liability Insurance), which increases the liability coverage beyond the basic 50,000 pesos. The cost of this supplemental coverage can vary by company and the level of protection required.

Another important thing to note is that rental companies may require a security deposit when you rent a car, and this deposit can be quite substantial, often exceeding $2,500. This deposit is taken to cover any damages or theft, so it’s essential to have adequate insurance coverage to avoid paying these costs out of pocket.

Finally, it’s worth noting that some rental companies may include mandatory insurance in the rental price. For instance, Sixt offers Third-Party Insurance at checkout, which is a basic personal liability insurance that satisfies the mandatory insurance requirement.

Overall, the cost of car rental insurance in Mexico can vary significantly, and it’s recommended to do your research and carefully read the insurance policy’s terms and conditions before signing up for coverage. It’s also wise to consider purchasing additional coverage beyond the basic insurance to increase your protection and peace of mind.

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Benefits of Having Car Rental Insurance in Mexico

Car rental insurance in Mexico is important for a number of reasons, and there are various benefits to having coverage. Here are some of the key benefits of having car rental insurance in Mexico:

  1. Extended protection: Many rental companies in Mexico offer Supplemental Liability Insurance (SLI), which is an extended protection that increases the coverage from the 50,000 pesos included in basic insurance. SLI is not mandatory, but it may come in handy in case of an accident.
  2. Mandatory insurance coverage: When you rent a car in Mexico, the mandatory insurance requirement is automatically included at checkout. This basic personal liability insurance satisfies the mandatory insurance requirement and covers personal injury claims or material damages you cause to the other driver in case of an accident.
  3. Peace of mind: Although full insurance is optional, it is definitely recommended for your peace of mind. Car rental insurance in Mexico can provide additional protection and help you avoid unexpected expenses in case of an accident, theft, or other incidents.

It’s important to note that the specific benefits of car rental insurance in Mexico may vary depending on the rental company and the type of insurance purchased. It is recommended to carefully review the terms and conditions of the insurance policy and to ask questions to the rental company to make sure you fully understand the coverage and benefits.

CarInsuRent car hire excess insurance starts from as low as $6.49 per day* to $94.90 for an annual policy. Our policies covers the excess on damage and theft up to €2,500 and provide full protection that Includes single vehicle damage, roof and undercarriage damage, auto glass and widescreen damagetowing expenses, misfuelling, loss of car key and tire damage. We cover multiple drivers between the ages of 21 and 84 years.

Car Rental Insurance in Mexico – Your Options

Purchase Car Rental Insurance Directly With the Rental Company

  • Rental company’s insurance – Most rental car companies offer their own insurance, which typically includes damage cover (CDW), theft cover (Theft Protection), and third-party cover (Third-Party Liability). These types of insurance options usually come with an excess, which is the first part of the bill that the renter will be responsible for. The rental company’s insurance is convenient, but it can be expensive and may not provide comprehensive coverage.

Cover Your Excess Through CarInsuRent

  • Third-party car rental insurance – Third-party car rental insurance is an affordable option that can provide comprehensive coverage for rental cars. This type of insurance typically covers collision damage, theft protection, and liability, and may offer higher coverage limits than rental company insurance. It can provide a cost-effective alternative to rental car company insurance.

Personal auto insurance policies

  • Personal auto insurance policies may cover rental cars, but it depends on the policy and the coverage. If the policy includes collision and comprehensive coverage, it may extend to rental cars. However, liability coverage may not extend to rental cars, so it’s important to check with the insurance company before renting a car.

Travel insurance –

  • Travel insurance may offer coverage for rental cars, including collision damage and theft protection. However, it is important to check the policy to confirm the coverage and any limitations or exclusions.

Credit card rental car insurance benefits – 

  • Some credit cards offer rental car insurance benefits, which may include coverage for damage and theft. However, the coverage and limitations can vary by credit card, so it’s important to check with the credit card company to confirm the coverage. Check if your personal insurance or credit card covers rental car insurance. 

Don’t Buy Any Additional Insurance At All

  • You are not required by law to buy a Rental Vehicle Excess Insurance or a Collision Damage Waiver. Such products are completely optional.  In case of an accident (whether major or minor), rental companies would quickly bill your credit card the maximum damage. Excess fee can reach $3,000–$8,250 depending on the company and the type of car you rented.

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Rental Company Insurance vs. CarInsuRent – Which Option is Best for You?

When renting a car, excess insurance is an optional add-on that can help reduce the excess amount that you would be liable for in the event of damage or theft of the rental car. Car rental companies charge for excess insurance by offering a Collision Damage Waiver (CDW), which will reduce the renter’s financial liability in the event of an accident, and/or a Loss Damage Waiver (LDW), which will cover the cost of repairing or replacing the rental car in case of damage or theft. The cost of CDW and LDW can vary significantly from one rental company to another and can depend on the type of vehicle, the location, and the duration of the rental. 

On the other hand, third-party providers like CarInsuRent offer excess cover insurance, which is usually more affordable and comprehensive than CDW or LDW offered by rental companies. The excess cover insurance from CarInsuRent will provide you with coverage for the excess amount that you are liable to pay in case of damage or theft of the rental car, and it can be purchased separately from the car rental agreement. Excess cover insurance can be purchased at any time before the rental period and it can be customized to fit your needs, which can be a more flexible option than the insurance offered by rental companies.

Mexico car rental insurance

Mexico car rental insurance


How to File a Claim

  • What to Do in Case of an Accident or Damage – If you are involved in an accident while driving a rental car, there are certain steps you should follow to file a claim with the rental car insurance company. First, exchange personal information with the other driver, including name, address, license plate number, rental vehicle information, insurance company, and policy number, and document the accident with pictures and notes. If the other driver is at fault, you should get their contact and insurance information and call their insurance company directly to file a claim. If you are at fault or have non-collision damage, you can file a claim with the rental car insurance company. The process for filing a claim with the rental car insurance company may vary depending on the provider, but typically, you would need to provide details of the incident, including the date, time, and location of the accident, as well as any police report numbers, if applicable. Additionally, you may need to provide documentation of the damage, such as photographs or repair estimates.
  • Required Documentation for Filing a Claim
    • A copy of the Certificate of Insurance
    • A copy of the rental agreement
    • A copy of the police report if:
      • you got in an accident with a third party
      • It is legally mandated in the country of incident
      • your claim is about stolen personal belongings
    • A copy of the damage report given by the rental company, detailing each cost incurred. Photographs of the damage are optional but may help ensure that the charges are reasonable.
    • Detailed repair receipts, invoices or other documents showing the breakdown of the amount the rental company charged you for the accidental damage or loss
    • A copy of your credit card statement that reflects your payment for the claimed damages
    • A copy of the driver’s license of the person driving the car during the accident


  • Tips for a Smooth Claims ProcessFiling an insurance claim can be a complicated and stressful process. The following tips can help ensure a smoother claims process:
    • Document everything: Documenting all the details of the accident or loss, including taking photos and notes, can help speed up the claims process and reduce the possibility of disputes.
    • Communication: Communication is key in any insurance claim process. Keep thorough records of all communication with the insurer, and discuss your expectations for the claims process with the adjuster. You can also ask about the frequency of updates and the preferred type of communication.
    • Avoid duplicate claims: Avoid submitting duplicate claims, as it slows down the claims payment process and creates confusion.
    • Understand your coverage: It’s important to understand your insurance coverage, including the limits and deductibles, before filing a claim. Understanding your policy can help ensure that you receive the maximum benefit to which you are entitled.
    • Be patient: Claims processing can take time, so it’s important to be patient. 

By following these tips, you can help ensure a smoother claims process, and increase the chances of receiving the maximum benefit that you are entitled to under your insurance policy.


Final Thoughts and Recommendations

In summary, purchasing adequate car rental insurance in Mexico is a crucial consideration for any driver renting a vehicle. The right insurance can provide protection against liability claims, financial loss due to damage or theft of a rental car, and medical expenses resulting from an accident. Therefore, it is essential to carefully consider the available insurance options when renting a car in Mexico.

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Frequently Asked Questions (FAQ)

Can I cancel my policy before my trip?

You can cancel your policy within 14 days of receiving your PDS and Certificate of Insurance. The premium you have paid will be refunded to you in full, as long as you have not started your trip and do not want to file a claim of any sort related to the policy. Once this 14-day period has passed, you can still cancel your policy but you will not receive any refund.

Does CarInsuRent cover Sand and Ash Protection and Gravel Protection?

Our Iceland policy include Sand and Ash Protection (SAAP) and Gravel Protection (GP).

What is Sand and Ash Protection (SAAP)?

Sand and Ash Protection (SAAP) is a type of insurance coverage that is designed to protect rental cars from the potential damage caused by volcanic ash and sand in Iceland. Certain areas of Iceland still have loose ash and fine sand from the Eyjafjallajökull eruption, which can blow around and damage vehicles. SAAP is a specific waiver that was created to cover this type of damage, as Icelandic insurance companies do not include it in their Collision Damage Waiver. This coverage is optional, but highly recommended if you plan to drive in Iceland. Camping Iceland, a local car rental company, claims that SAAP will serve you well and recommends it for all rentals.

When is it Common for the Wind to Toss Sand Onto the Roads?

Sand can be hurled onto roads in Iceland during the Sand & Ash period, which typically occurs in February, March, and April. During this time, the snow has only just thawed out and the grass hasn't grown sufficiently to keep the sand in its place. This can lead to damage to vehicles driving on the roads. It's important to note that sand and dust storms, which can also cause visibility issues for drivers, typically occur when strong winds lift large amounts of sand and dust from bare, dry soils into the atmosphere.

What does CarInsurent Sand and Ash Protection in Iceland cover?

Due to the recent volcanic eruptions in Iceland the risk of damage to the paint and windows of the cars has increased. Our Sand and Ash Protection (SAAP) insurance can cover damage to the paint, windows, lights, plastics, chromes, and wheels of the rental car caused by sand, gravel, ash, pumice, or other earth materials being blown onto the vehicle. The deductible for SAAP insurance is typically 50,000 IKR for all rental cars in the fleet. No other insurance covers these damages and insurance companies refuse to cover them. Even though all safety rules are followed damage can happen when, for example, wind starts blowing more than was forecasted thus moving the sand/ash and damaging the car.   [carInsurent_sc_get_quote_cta cta_text="See How Much You Can Save on Your Car Rental Insurence" cta_btn_text="Get Started"]  

Does the Insurance Cover Lost Keys and Remote Locking Devices?

Yes. CarInsuRent insurance covers lost keys and remote locking devices. Losing the keys to a rental car can be a stressful and frustrating experience. Many people wonder if their rental car insurance will provide coverage for lost keys. Rental car insurance policies may vary in their coverage for lost keys. Lost keys are not typically covered by car insurance for loss or theft, as keys are considered personal property.

Steps to Take If You Lose Rental Car Keys

Losing rental car keys can be a frustrating and stressful experience, but there are steps you can take to get back on the road quickly. Here are some tips based on the provided web search results:
  1. Contact roadside assistance: Most rental cars come with a roadside assistance phone number that you can call in the event of a lockout or lost keys. You should be able to call and have someone sent out to help with your situation. Note that our car hire excess waiver insurance may reimburse you for roadside assistance.
  2. Check for a spare key: Some rental cars come with a spare key that is located in a magnetic box under the car or in the trunk. If you have rented a car that has a spare key, this could be an option to get back on the road quickly.
  3. Contact the rental car company: Contact the rental car company as soon as possible to let them know what has happened. They may be able to provide you with a replacement key or arrange for a locksmith to come and assist you.
  4. Check your insurance policy: If you take out our car hire excess insurance you may have coverage for lost or stolen rental car keys.
  5. Take preventative measures: One of the best ways to avoid losing rental car keys is to make them harder to lose. Attach a big, noticeable lanyard or keychain to the keys, something that will make a noise when moved, to help you locate them quickly. Additionally, always double-check that you have the keys with you before leaving the car.
  We encourage you to read our full guide to learn everything you need to know about travel car hire excess insurance.   [carInsurent_sc_get_quote_cta cta_text="See How Much You Can Save on Your Car Rental Insurence" cta_btn_text="Get Started"]   Please see the Policy Wording for the complete terms and conditions.

Find the answers you’re looking for to the most frequently asked car hire insurance questions as well as other questions relating to our products and services.

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