What is the deductible in car insurance, and how does it work in Mexico?

Cómo funciona el deducible en un seguro de auto

The deductible in car insurance in Mexico is the portion of the cost that the insured (you) must pay in the event of an accident or theft before the insurer covers the remaining damages. This amount is specified in the insurance policy and is typically calculated as a percentage of the car’s insured value, which is subtracted from the compensation the insurer will provide.

Why does the deductible exist?

The deductible exists so that both you, as the insured, and the insurer share the financial responsibility in the event of an accident. It helps prevent claims for minor damages, as you would cover small repairs yourself and encourages responsible use of the vehicle. Additionally, it helps keep premiums lower.

Some deductibles applicable to insurance coverages:

• "Daños Materiales" (Collision): Covers damage caused by road accidents, natural phenomena, vehicle transportation, among other risks. For this coverage, deductibles of 3%, 5%, 10% of the insured sum contracted for the vehicle.

• "Robo Total" (Stolen Car): For this coverage, the available deductibles are 5%, 10% or 20% of the insured sum contracted for the vehicle.

• "Rotura de Cristales" (Glass Breaking): This deductible corresponds to a percentage applied exclusively to broken glass, generally 20% of the repair cost.

• "Robo Parcial" (Partial Theft): This deductible applies only to the theft of parts or accessories installed by the manufacturer, commonly 10% of the cost of the stolen parts.

• "Equipo Especial" (Special Equipment): Applies to damage or theft of any part, accessory or additional label installed on the vehicle, that is not part of the manufacturer's original accessories and has been declared in the policy. Generally, the deductible is 25% of the amount of the insured sum of the affected equipment.

  
  

Example:

Your car is insured for $200,000 with a 5% deductible. If you have a crash and the repair costs $50,000:

• You pay $10,000 (5% of $200,000).

• The insurer pays the remaining $40,000.

However, if the cost of the repair is less than the deductible—for example, a minor dent costing $8,000—you would cover the entire amount, as it does not exceed the deductible.

Benefits of understanding your deductible:

• Choosing the Right Deductible: You can opt for a lower deductible, which results in a higher insurance premium. Conversely, choosing a higher deductible lowers your premium but increases your out-of-pocket costs in the event of an accident.

• Zero Deductible: Some policies offer the option of not paying a deductible in specific situations, such as when the person responsible for the accident accepts fault or when certain coverage is contracted.

• Knowing Which Coverages Do Not Have a Deductible:

  Liability coverages do not have a deductible. This means that if you are responsible for an accident, the insurance company will cover 100% of the damages caused to a third party, up to the limit of the insured sum contracted.

• Understanding How the Deductible Works in Different Types of Insurance:

  The application of deductibles varies depending on the type of insurance and the coverage.

Recommendation:

It is essential to review the "Condiciones Generales" (Terms and Conditions) of your policy or consult your insurance company to understand the deductibles applicable to each coverage, as these may vary between insurers.

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