Owning real estate in Mexico is a real dream come true for many buyers who look forward to enjoying the fantastic climate, stunning natural beauty, relaxed lifestyle and delectable cuisine, not to mention the many exciting activities that simply can’t be found anywhere else in the world. When you find the perfect home or condo, it’s also important to protect it with the right type of insurance to safeguard your investment against unforeseen circumstances and disastrous events. Here is a quick rundown of everything buyers need to know about buying property insurance in Mexico, to help ensure you receive adequate coverage without wasting money on a policy or coverage you don’t really need.
Insurance Coverage for Your Home in Mexico
Property insurance in Mexico is probably going to be different than whatever you are used to carrying, so you will likely notice some items missing that you are used to seeing included with standard coverage at home. Although there may also be some unfamiliar wording scattered throughout the policy, many Mexican insurance companies now offer policies that are closer to what buyers are used to seeing in the U.S. and Canada. But it’s important to point out that home insurance companies in Mexico will underwrite the policy so it is valid and legal according to Mexican law, so expect a few differences.
Still, the reason to obtain property insurance in Mexico is pretty much the same as it is anywhere else in the world; to protect your investment against catastrophic events and natural disasters. Just remember, there is a fine line between getting the coverage you really need and wasting money overpaying for insurance you will never even use.
To start with, we recommend choosing a property insurance provider in Mexico who offers policies in English. Today, there are even US-based insurance companies who specialize in creating property ownership policies that more closely reflect the wording, terms and coverages buyers are used to seeing, but the policy itself is actually underwritten by a Mexican insurance company, so it is fully compliant with the law. These companies simply work in partnership with their Mexican counterparts to create insurance policies that are more familiar to buyers in the U.S. and Canada.
Whether you buy insurance directly from a Mexican insurer, or opt to work with a specialty U.S.-based company, it’s important to make sure the policy is adequate and the underwriting is sound. Consider purchasing insurance on both your home or condo and any watercraft you may own. Keep in mind that you must have titled land in order to insure property built upon it, and some policies offer comprehensive (all risks) coverage, while others are limited to certain named perils.
All Risks Coverage vs. Named Perils
As the more comprehensive of the two main options, all risks coverage generally pays out in the event of most incidents that could involve your property. The best all risks policies will also provide coverage for major disasters like hurricanes, flooding, wind damage, fire, earthquakes and even volcanic eruptions, if applicable. On the other hand, named perils coverage only protects against specific pre-selected events, so it’s typically cheaper but also provides less protection.
Work with an experienced broker to help you decide what type of property insurance in Mexico makes the most sense for your situation. Ask your realtor for references and also talk to other homeowners to see who they use. A good insurance broker should be able to clearly illustrate your various options, including coverage and price differences.
Do you have other questions about owning property in Mexico? Post them in the comments section below!