Introduction

As of 1 January 2019, all motor vehicles travelling on federal roads must be covered by civil liability insurance. This measure was announced in 2014 and gradually rolled out under the Law of Federal Roads, Bridges and Transportation as follows.

Year of enforceability

Vehicle model

Coverage

Insured amount

2014

2011 models onwards

Damages to third parties (injury and death)

Ps100,000

2015

2008 models onwards

2016

2005 models onwards

2017

2002 models onwards

2018

2000 models onwards

2019 onwards

All models

Personal injury and death

Ps100,000

Material damage

Ps50,000

Mandatory coverage

In 2014 the federal government announced that civil liability insurance would be required for motor vehicle owners who travel on federal roads, avenues and bridges in order to guarantee third parties relief for any damages caused to themselves and their property.

As of 1 January 2019, this measure became effective for all motor vehicle owners. The required minimum coverage is:

  • Ps50,000 (approximately $2,500) for material damages; and
  • Ps100,000 (approximately $5,000) for personal injury and death.

While the amounts are immaterial, the fact that this insurance is mandatory will lead to an increase in civil liability premiums paid to Mexican insurers.

The coverage must be contracted on an annual basis, and the premium must be paid in its entirety on being contracted. As this insurance is mandatory, insurers cannot cancel, rescind or otherwise terminate it.

Local requirements

Mandatory civil liability insurance is required at the federal level. At the local level, each state regulates the need for motor vehicle owners to take out insurance. For example, Mexico City requires motor vehicle owners to have a current liability insurance policy that covers, at a minimum, civil liability for damages to third parties and their assets. Public transport vehicles used to carry passengers or freight must also have this insurance.

Penalties

Failure to take out the mandatory insurance will result in fines ranging from Ps$1,612 to Ps$6,448 (approximately $82 to $322) and, in some cases, the offending vehicle being impounded.

For further information on this topic please contact Carlos Ramos Miranda at Hogan Lovells by telephone (+52 55 5091 0172) or email carlos.ramos@hoganlovells.com. The Hogan Lovells website can be accessed at www.hoganlovells.com.

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