Here is some semi-accurate and useful information about renting a car in Mexico. This is not designed to be comprehensive but rather like "filling in some of the blanks". Auto insurance, What you must have, What you are often encouraged to buy, What your credit card might pay for or cover, and what your personal auto insurance policy will do for you in a foreign country. Insurance is the part that has been the greatest source of confusion and frustration for travelers, so here is an attempt to clarify it.
Making a car rental reservation in advance, using the internet or telephone will inevitably skip over the issue of auto insurance and is never completely included in the rental rate that you are quoted. It can double or triple the quoted daily rate in most cases.
The Two Principal Components of Auto Insurance (there are quite a few more but these are the basics):
1. Collision Damage Waiver (CDW) / Loss of Use
Certain credit cards promote insurance coverage as complimentary if you use the card to make the reservation and to make payment for the rental. It will generally cover Collision Damage Waiver (CDW) and Loss of Use. If not, you will have to purchase it at the rental counter and it will add approximately $35 per day to the cost of the rental. If your card covers it, you can DECLINE the coverage even though they will often attempt to insist that you must have it. If they do, walk away. they will come get you.
2. Third Party Liability
This is mandatory in order to rent and drive a car in Mexico. Your credit card WILL NOT provide this coverage. Your personal auto insurance policy back home in the U.S. won't cover it (it will if you drive your own car into Mexico). The rental car company might provide basic liability coverage as part of the daily rental charge. The Hertz website allows you to select a city and country and then select insurance. The information provided is specific to the location you have selected. As with most insurance it doesn't seem to actually cover much if anything but it does help you understand what is required at that location. For example, an agency in Huatulco says basic Third Party Liability IS included in the price of the rental and covers up to $35,000. Additional liability coverage to $450,000 can be purchased for an additional $13 per day.
Basically, between your credit card and rental car company you can decline any and all additional insurance coverage suggested or demanded by the rental counter agent. It is possible, however, to purchase all the addtional insurance you can afford. and then some. You can also get insurance quotes from 3rd parties who specialize in auto insurance for driving in Mexico.
Your auto insurance policy in the U.S. WILL NOT cover your own
automobile in Mexico.
Declining additional coverages over and above the mandatory Third Party Liability while thinking that your credit may give you this protection is foolhardy. If one chooses to decline, then the companies "extort" you with a demand for a credit card hold or deposit that may range from 10% to 100% of the rental vehicle value. Even if you use a credit card that covers 100% of Collision, Theft and Personal Injury Medical Expenses up to $100,000. The Mexico franchises refuse to recognize this plan and either demand the deposit or hold you hostage to take their plan ($37/day in one case)
Keep in mind that while one could decline certain coverages because of credit card provided insurance, buying it could provide "legal assistance" or bail bond coverage that keeps one out of jail under certain circumstances.
They also charge 3,000 to 5,000 USD as security note that you will get back when return the car. So make sure you have a credit card knows that you are in Mexico and that charge is expected.
One recommendation is take a picture with dates of the car, all the little scratches, bumps, chips and check the gas. Use credit card as much you can. Paying gas with cash is asking to be robbed.
The basic 3rd party liability in most rental car policies in Mexico is $50,000, but note that $ means Mexican pesos, or about $3,700 American at current exchange rates.
All gas in Mexico is sold by the state company Pemex and very few of their stations take credit cards, so you have no alternative but to pay with cash. Just look to make sure the pump is re-set to zero before the attendant starts pumping. When paying for gas in cash: Switching bill denominations is common. Ask for a specific amount when filling up, and be prepared for that exact amount. If you ask for $700 peso fill, you may give a $500 & $200 ($700) peso bills. An attendant may try to distract you, the attendant will point to the pump price, you may be tempted to look and verify the amount. Don't take your eyes off the money, this is where the switch is done! If you look at the pump, the attendant can then switch the $200 for a $20 peso bill ($520), meanwhile you did give $700 pesos. He will try to convince you that you made a mistake, he will point to the charge on the pump, don't let your eyes leave the money. Don't look at the pump!
In February of 2013, new minimum liability limits were announced by the individual Mexican States, and here are the ones with minimum limits above $100,000 USD:
Warning: Many rental car agency Supplemental Liability Policies do not meet these new standards.
Articles about rental insurance in Mexico: