Many United States residents consider purchasing a home in Mexico for either their own vacation retreats or to be used as an investment property. In fact, Mexico is the top country for U.S. residents who want to buy another home abroad.
What’s more, there were in excess of 1 million U.S. residents who were living in Mexico as of 2019, and about half of those people owned a home there.
There’s a lot of value to owning a home in Mexico. It offers impressive and exotic vacation destinations, and a lower cost of living than most places in the U.S. That’s why it’s such a popular destination for Americans to own a second home.
If you own a home in Mexico, it’s important that you protect your investment. But, can you purchase U.S. home insurance for your Mexican home? Let’s dive deeper into this subject below.
Can You Purchase U.S.-Based Insurance for Your Home in Mexico?
If you own a home in Mexico, one option you have for insuring your property is to go through a company that’s based in the country. However, that can be complicated and confusing to American citizens, many of whom don’t speak Spanish and aren’t familiar with the typical standards for insurance policies.
Many U.S. citizens, as a result, will turn toward insurance companies based in America that have partnerships with insurance companies in Mexico. This last part is necessary, as Mexican law requires that an insurance company based in Mexico must fully underwrite all policies.
These partnerships are valid in Mexico, because they result in a legal filing with the Mexican insurance company. The American-based company simply acts as an intermediary.
Why Use a U.S. Insurance Company?
There are many benefits to getting home insurance for your home in Mexico through a U.S.-based company. The overarching reason is that they will provide you with all the details in familiar terms to you.
Not only are there different types of property insurance offered in Mexico, but the wording that’s included in their policies is unique, too. If you went directly through a Mexican insurance company to get your policy, you could easily find yourself confused.
Your U.S.-based insurance company, meanwhile, will not only translate all the wording into English for you — if that’s necessary — they will also present the information in familiar terms. This allows you to make an apples-to-apples comparison to property insurance you might have on your home in America.
Not only that, but when you get your property insurance through a U.S. company, you will be able to pay your premiums in U.S. dollars rather than having to convert currency into pesos. Any insurance payout you receive through this partnership would also be paid out in U.S. dollars rather than pesos.
What Type of Coverage Will You Need?
Much like the U.S., Mexico is a very diverse country. Different locations present different potential perils for homes.
If your home is located on the coast, you may need to consider flood and hurricane insurance in addition to the standard property insurance. If your home is located more inland, you may not need flood or hurricane insurance, but you may want to consider policies that cover earthquakes.
The typical home insurance policy in Mexico will provide coverage for damage that’s caused by weather-related activities, vandalism and burglaries, damages to other people and injuries suffered by someone who works in or on your home.
In Mexico, you can choose to purchase a home insurance policy that covers all the potential risks, or you can choose one that specifies the perils from which you want to be protected. Which option you choose really depends on the specifics of your property.
Some things to consider include …
- Other structures: If you own a single-family home with some property, or have other structures on your property, you would want to consider policies that provide coverage for the other structures you might have.
- Third-party liability: This coverage provides protection in case someone who doesn’t live at your property is injured while they’re present or working on your property, or is injured by something on your property, such as a tree falling.
- Rental: If you use your home in Mexico to generate income as a rental property, you should look into extra coverages that could be available that would provide protection for not only the valuables in your home, but damages caused by renters and third-party liability in case someone gets hurt.
- Condos: Condos are extremely popular types of second homes in Mexico. If you own this type of property, you need to consider liability coverage for condos that meet special arrangements that are necessary and/or required by the condo association.
- Other specific coverages: Many people who own coastal homes in Mexico will also own watercraft. If you do, you can protect it by adding it as part of your home insurance policy. This would obviously be above and beyond your normal coverage, but could save you a lot in the long run.
Work with a Trusted U.S. Insurance Company
There’s a lot that can go wrong if you own a second home, but especially if that home is located in another country. That’s why it’s important to work with an insurance company you can trust to help protect your home in Mexico.
It’s even more important in this case, though, as the company that underwrites your policy in Mexico is the one that’s going to determine your payouts, should you ever need one, and get you the money that you deserve.
At Signature Insurance, we have been serving people just like you for years, providing all types of insurance to cover your most valuable possessions. If you own a home in Mexico, you can trust that we work with only the best insurance underwriting companies in that country.
So, if you ever have a need to file a claim, you can rest easy knowing that everything will be just fine.
To find out more information about insurance coverage for your home in Mexico, contact us today.
Get insurance today!
At Signature Insurance we want to help you understand your insurance coverage options so you make the best decision.
Contact us at (586) 274-9600 and we’ll be happy to get quote for you from many of the top auto insurance companies or home insurance companies in Metro Detroit.