EXCESS MEXICAN COVERAGE FOR A PERSONAL MOTORCYCLE POLICY

(November 2024)

The Personal Motorcycle Policy (PMP) does not offer coverage to a driver while operating a cycle in Mexico. Motorists driving from the USA to Mexico must buy special automobile insurance before crossing the border. Motorcycle policies written on vehicles garaged in the USA apply only to accidents, occurrences, and losses during the policy period while the vehicle is within the USA, its territories and possessions, or Canada, or is being transported between those locations.

MT 03 07—Limited Mexico Coverage

The purpose of this endorsement is to provide excess coverage over valid Mexican automobile insurance for covered motorcycles that are used within 25 miles of the Mexico-USA border. There are two important considerations concerning the form's use:

1. Coverage is strictly on an excess basis that applies over an underlying, primary Mexican insurance policy. This endorsement only offers a layer of coverage over the Mexican policy if the limit of the Mexican policy proves to be inadequate. It will not drop down to provide primary coverage.

2. If an insured travels further than 25 miles into Mexico, this endorsement’s excess protection is void. It is important that insureds review their travel plans carefully and be aware of these limitations before going into Mexico. Poor planning may result in an insured being inadequately protected.

An insured planning to ride in Mexico can attach this endorsement to their existing PMP. The endorsed policy extends the policy coverage and conditions (on an excess basis) while the motorcycle is driven in Mexico. HOWEVER, the application of this endorsement’s coverage and conditions must be carefully read and understood.

Any insured using this endorsement must be aware of the form’s cautious, opening wording. It conspicuously states that any accidents will be handled according to Mexican law, which may treat traffic incidents as criminal acts. Further, an insured is instructed that he or she MUST purchase valid, primary coverage from a properly licensed insurer in Mexico.

Note: Unless the insured has also purchased primary liability insurance through a licensed Mexican Insurer, this endorsement does not apply.

The MT 03 07 endorsement places a limit of 25 miles on this coverage; beyond that point, excess coverage does not exist. In other words, an insured can only travel a maximum of 25 miles into Mexico at which point all coverage ceases. In addition, this form offers excess coverage for a maximum of 10 days, after which the coverage is void. Further, the endorsement’s protection is excess over any other valid and collectible insurance.

The insured’s PMP, even if it bears the Mexican Coverage endorsement, may not be recognized by Mexican authorities. An individual, whether a resident of Mexico or a tourist, according to Mexican law, must be financially responsible for any injury or damage caused by an automobile accident. The law further states that a motorist involved in an accident must be detained until he or she shows satisfactory evidence of financial responsibility in the form of either an authorized Mexican insurance policy written by a Mexican company or cash.

Definitions

The form changes the PMP’s definition of “your covered motorcycle.” Under this form, the term applies to the vehicle shown in the PMP’s declarations, a motorcycle that is newly acquired, an owned motorcycle cargo trailer or transport trailer when described in the declarations. The newly acquired motorcycle also refers to newly acquired motorcycle cargo or transport trailers.

Coverage

Via this endorsement, all of the coverages that apply to the base PMP apply to accidents that occur in Mexico if the location is no greater than 25 miles from the U.S. border and takes place during a trip that is not scheduled to exceed ten days. Protection includes, under certain circumstances, the insurer’s obligation to provide a legal defense. The obligation is voided if the applicable accident involves a Mexican citizen and/or if the lawsuit is filed in Mexico.

Exclusions

Besides the exclusions caused by a lack of primary Mexican insurance, driving further than 25 miles into that country and the 10-day trip limit, there are a number of additional exclusions. Specifically, there is no:

· Coverage if liability insurance has not been obtained, and is not in force, from a licensed Mexican Insurance Company

· Coverage for a citizen or resident of Mexico except for a loss payable under physical damage coverage—should a covered motorcycle be damaged during an accident while being driven by a Mexican citizen or resident

· Physical damage coverage for repairs made in Mexico unless the covered motorcycle cannot be driven in its damaged condition. Note that there is a limitation in case this event occurs: the most that an insurer is obligated to pay for repairs in Mexico is the actual cash value of those repairs that could have been made in the USA.