How auto, life or health insurance work in Mexico

Everyone is exposed to unfavourable events that reduce their pocket. Car accidents, earthquakes, fires and property thefts are just some of the problems that would require the disbursement of large sums of money.

This is where insurance and insurers come in. Each of them offers specialized policies – such as auto or home insurance – that protect your assets and cover the expenses that have been caused by their loss, theft, theft or irreparable damage.

Insurance in Mexico: What you should know

Although the Mexican market has different insurance companies, not many people access insurance contracting. This is due, on the one hand, to the lack of purchasing power and, on the other, to ignorance of its benefits or how the policy works.

In fact, according to the latest surveys conducted in 2018:

  • Only 30% of the car fleet is insured
  • 40% of the population does not have any type of health insurance
  • Only 9% of houses and apartments are insured against earthquakes
  • 85% of Mexicans do not have insurance for major medical expenses

What are insurance and other frequently asked questions

The insurance is simply a contract undersigned a person or group of persons with an insurance institution to cover certain costs, replacement of an asset or financial gain before a major event, such as death.

The insurance activity is regulated in the Law of Insurance Institutions and Bail Bonds, the Law on the Insurance Contract and other regulatory bodies; In addition to the policies of each insurance institution and the provisions of the particular contract.

What types of insurance exist?

There is a wide variety of insurance available. In Mexico, the most common are:

  • Life insurance: If the insured person dies due to natural causes or an accident, the beneficiaries of the policy receive the insured sum
  • Health insurance: It is focused on primary health care. It covers medical consultations for occasional diseases, tests, blood tests, imaging, etc.
  • Home or home insurance: It protects the property in case of fire, earthquakes, thefts or floods and gives the beneficiary the total amount of damage, loss or stolen property
  • Car insurance: It protects both the car and the driver and passengers inside it in the event of an accident. It also covers material damage caused by crashes or theft of the car.
  • Education insurance: It works as a savings plan for school expenses. Once the insurance term expires, each insured child receives a specific figure to continue their studies
  • Insurance of major medical expenses: They are specific for chronic diseases, terminal pathologies or disabling accidents. The insurance company will cover medical expenses, consultations and hospitalization up to the limit that is reflected in the subscribed policy

How does insurance work?

Insurance is contracts that work in a simple way, even if it doesn’t seem so. The risks that exist of theft, loss, loss, illness or death are transferred to the insurance company who will be responsible for the expenses – up to a maximum insured limit – in exchange for the payment of a premium.

This premium is the result of a risk analysis carried out by the insurance institution on the good, health or life of the beneficiary. For this reason, the life insurance policy premium of a person who practices high-risk activities is higher than that of a standard citizen because he or she is more likely to suffer an accident. The same happens when health policy is contracted for adults over 50 years old.

Normally, the premium is paid annually. Those who cannot cover the total cost have the option of accessing fractional payments or financing with the insurance company or with their trusted bank.

What obligations does the insured and the insurer have?

The obligations and rights of the insured and the insurer are contained in the insurance policy. This contract carefully defines the type of coverage provided by the insurer, what type of expenses it covers, the amount of the policy, how reimbursements operate or if there is any service affected with deductibles.

For example, in the case of health insurance, the annexes show the insured the clinics, hospitals and assistance centres with which they have a direct agreement or the expenses that are excluded from the policy, such as psychiatric consultations or plastic surgeries.

How to make insurance effective?

Claiming insurance coverage will depend on the type of policy purchased:

  • In the case of health, life, car and housing policies, it is necessary for an accident to occur and that it be reported or reported within the period indicated in the contract. Losses are the cases in fact framed in the policy, that is, a crash, an accident, an illness or death
  • In the case of instalment policies, such as education insurance, it is only necessary that the term of the contract signed by the parties is fulfilled

If you are interested in purchasing an insurance policy, you can search for different options and compare them among them. This way, you will know which one will bring you the best benefits.

Some of the most contracted in Mexico are AXA Insurance, GNP Insurance, Qualitas Insurance, MAPFRE Insurance and Zurich Insurance, but there are also smaller insurance companies that have excellent plans and policies.

Take your time and analyze all the advantages and disadvantages of the policies offered. Only then can you choose the ideal for your assets and your family.