What’s the cost of homeowner's insurance in Mexico?
Sandi Vandiver
I don’t know a single person who has homeowners insurance in Mazatlan, although I believe there is a bank now that carriers it. At this point, I wouldn’t even consider buying it.My understanding is that the way the policies are written, they don’t cover much. In addition, our houses here in Mazatlan don’t generally burn down, because they’re all concrete. That may be different in the interior, where a lot of houses are made of...
I don’t know a single person who has homeowners insurance in Mazatlan, although I believe there is a bank now that carriers it. At this point, I wouldn’t even consider buying it.My understanding is that the way the policies are written, they don’t cover much. In addition, our houses here in Mazatlan don’t generally burn down, because they’re all concrete. That may be different in the interior, where a lot of houses are made of wood.
(Old town Mazatlan, Mexico, pictured.)
Posted October 15, 2015
Ivan Castillo - Secure Title Riviera Maya
The cost for homeowner’s insurance will vary, depending on location. For example, we’re in Riviera Maya, which is in an area that has a higher potential for hurricanes. So more or less you would pay between US $1,500 to $2,000 a year for insurance that would protect you against damage from flooding, fire, and so on, not including the contents of the property, such as furnitureFrom a cultural perspective, other than insuring against hurricanes, in Mexico,...
The cost for homeowner’s insurance will vary, depending on location. For example, we’re in Riviera Maya, which is in an area that has a higher potential for hurricanes. So more or less you would pay between US $1,500 to $2,000 a year for insurance that would protect you against damage from flooding, fire, and so on, not including the contents of the property, such as furnitureFrom a cultural perspective, other than insuring against hurricanes, in Mexico, we’re not accustomed to insurance. For example, I don’t have insurance on my house. However, that doesn’t mean that the major insurance companies aren’t located in Mexico. They are and you can find any type of insurance that you want.
One of the reasons is that houses in the US are constructed out of different components. In the US, you would use more wood, while here in Mexico, essentially everything is constructed out of concrete, so it is extremely uncommon to see a house burn in Mexico.
(Tulum, Mexico, pictured.)
Posted January 26, 2016
Alicia Gomez - Collins Real Estate
I don’t have the exact amount of homeowner’s insurance in Mexico because not everybody has homeowner’s insurance here in Mexico. Having homeowner’s insurance depends on the value of your property. If you have an expensive property then you had better have one. A few years ago, we had terrible rains and we had a big cloud above the lake that took a lot of water. When it was so heavy, it rained all the water in the mountain. There was...
I don’t have the exact amount of homeowner’s insurance in Mexico because not everybody has homeowner’s insurance here in Mexico. Having homeowner’s insurance depends on the value of your property. If you have an expensive property then you had better have one. A few years ago, we had terrible rains and we had a big cloud above the lake that took a lot of water. When it was so heavy, it rained all the water in the mountain. There was a house that took a lot of rainwater. It took all the furniture and destroyed the house by 80%. It was a total loss and the house had no insurance. It is important to have homeowner’s insurance.
Very few people get homeowner’s insurance because you look at the homes here in Mexico, they are built out of brick so people do not worry about the home burning down because there is very little wood in the home. But fire can start from the things in the house. It doesn’t have to be the stove. It could be an issue on the electrical wirings. Once it creates a spark it could go to your couch or curtains and then the fire starts. This is why it is better to have homeowner’s insurance.
(Kitchen in Lake Chapala, Mexico, pictured.)
Posted October 16, 2016
Melanie Lansing - Mexico Insurance Advisors
There is not one simple formula for calculating Home Owner's Insurance in Mexico. Home insurance covers you for many things, not just damage due to catastrophic weather conditions. Home owner´s insurance provides protection for your home, home contents, personal belongings, accidental damage, & injury to others, among other benefits. Home insurance premiums are based on the following values:
1. Home (what it would cost to rebuild...
There is not one simple formula for calculating Home Owner's Insurance in Mexico. Home insurance covers you for many things, not just damage due to catastrophic weather conditions. Home owner´s insurance provides protection for your home, home contents, personal belongings, accidental damage, & injury to others, among other benefits. Home insurance premiums are based on the following values:
1. Home (what it would cost to rebuild the home-- not the foundation or the land on which it was built)
2. Any adjacent home(s)
3. Contents: Furniture, home appliances, electronics, valuable art items.
4. Windows & Mirrors: Sliding glass doors, skylights, tables with glass surfaces, etc.
5. Personal items - Cash, jewelry, etc.
6. Enhancements: Solar panels, storm windows, security systems, solar water heaters, water purification systems, etc.
7. Outdoor Items: Swimming pool, exterior lighting, ball courts, palapas, palm roofed huts, etc.
Additional coverage options include:
1. Earthquake & Volcanic Eruption coverage
2. Water damage due to weather conditions (Hurricanes, torrential rains, flooding, mud slides).
In general, to qualify for hurricane coverage, your dwelling must be more than 500 meters from the ocean. However, insurance coverage requirements differ from company to company and based on your exact location.
It is best that you reach out to an insurance agent who represents several companies, so you have more plan & cost options to choose from.
Posted October 16, 2016
Ariadna Delsol - COLONIAL REAL ESTATE
Homeowner’s insurance is not widely used here in Mexico. You can have homeowner’s insurance if you want to but if you ask 80% of the population, you’ll find that they don’t have it. Expats are the ones in the 20% who usually get homeowner’s insurance. There are some companies that offer homeowner’s insurance and the price depends on the company and on the location of the house. Having a home in the US is different than...
Homeowner’s insurance is not widely used here in Mexico. You can have homeowner’s insurance if you want to but if you ask 80% of the population, you’ll find that they don’t have it. Expats are the ones in the 20% who usually get homeowner’s insurance. There are some companies that offer homeowner’s insurance and the price depends on the company and on the location of the house. Having a home in the US is different than having one in Mexico. In the US, houses are made with prefabricated materials and wood. Here in Mexico, we use real brick walls. If there is a fire, your house here in Mexico won’t get burned in 5 minutes. Your furniture may burn but you cannot burn a brick house. The risk is there but it is less and that is why homeowner’s insurance is not a big thing here.
If you live in an area that gets hit by earthquakes and hurricanes, then you may want to get homeowner’s insurance but we don’t have those natural phenomena here in San Miguel de Allende.
Another reason why people in the US get homeowner’s insurance is because of liability. We don’t have that here in Mexico, thank goodness. There is a culture of fear in the US where everybody is suing everybody for everything and we don’t have that type of mentality here in Mexico. If a person falls in front of your house because you left some soap when you were washing the sidewalk, that person will not sue you. He will fall and that’s it. He would go to the hospital if he broke a bone but that is it.
(Living room in a colonial home, San Miguel de Allende, Mexico, pictured.)
Posted March 18, 2017
Karen Herrtwich - S&S Auto
In Mexico, there aren’t many homeowners who insure their homes because there are really no fires. I guess we could have earthquakes in Mexico, but people typically self-insure. Home insurance is an American and Canadian thing. A typical Mexican would say, "Why do I need insurance? My house probably won't burn down, and if somebody comes and steals my TV, I'll just buy a new one- there’s the cost of the insurance.” ...
In Mexico, there aren’t many homeowners who insure their homes because there are really no fires. I guess we could have earthquakes in Mexico, but people typically self-insure. Home insurance is an American and Canadian thing. A typical Mexican would say, "Why do I need insurance? My house probably won't burn down, and if somebody comes and steals my TV, I'll just buy a new one- there’s the cost of the insurance.” Earthquakes can turn your home to rubble, but I tell you, I have lived through several earthquakes here in Chapala. The odds of anything happening, I just find very minimal. Yes, how unfortunate it would be if after just investing US $300,000 – US $400,000 in my home, and it turns to rubble. That would be a terrible, terrible thing. But the odds of that happening are very low.
There are landslides in Mexico, too, and that would be an issue. As an example, in the Raquet Club (a sub-division in San Juan Cosala), there was a massive amount of rain and the mountainside came down and filled their pool and their house completely with rocks & dirt. They were lucky to have gotten out safely. They couldn't even drive their car, it happened so fast. It took them a year to clean everything out, after that, there was no damage to the structure of the house, and once they emptied the pool of the rocks, they repainted and filled it with water. Everything went back to normal.
In Chapala, we also have waterspouts that can make their way up the mountainside. It happened to my house years ago. The water spout picked up the water from the lake, and started up the hillside and let go. It dropped a lot of water, washing the dirt and the rocks down the hillside, knocking down our back wall. The gardener happened to be there, so he opened the front door of the house so the mud and water went down through the living room, down the stairs, down on the terrace and it just kept flowing out and bringing some of the furniture with it. It was cleaned it up, and no problem.
I've lived in Chapala long enough that my attitude is taking on the Mexicans’ “life still goes on" attitude. When someone comes in and they steal your furniture and your jewelry, your life is still the same. You don't have those diamond earrings anymore, but your life doesn't really change, so why would I pay insurance to protect those things? Mexicans are not very materialistic, so they really don't care about that stuff. That's their attitude.
For Mexicans, you have to take responsibility for what you did. It's hard to sue people here for tripping or falling on their property because they take responsibility here. You put your face through a box window, well, you should've been careful. That's the attitude of the Mexicans.
If there were ever a lawsuit, the judge may say something like, “Prove to me why it was his fault that you fell down and tripped on his porch.”
“Well, he didn't clean the ice.”
“You should've walked around the ice.”
In Mexico, liability issues are extremely rare.
(House in the hills of the Raquet Club, near Ajijic, Mexico, pictured.)
Posted March 20, 2017
Andre Bellon - Bellon Insurance Agents
The cost for home insurance in Mexico depends on the value of the home and the place where it’s settled. If it’s on the mountain or near the lake, insurance will have a different rate because the risk is totally different. The average premium of home insurance for homeowners is 10,000 pesos ($500) yearly. In the Chapala area, for a home that’s valued at 3 million pesos ($150,000) with contents valued at 300,000 - 400,000 pesos ($15,000 -...
The cost for home insurance in Mexico depends on the value of the home and the place where it’s settled. If it’s on the mountain or near the lake, insurance will have a different rate because the risk is totally different. The average premium of home insurance for homeowners is 10,000 pesos ($500) yearly. In the Chapala area, for a home that’s valued at 3 million pesos ($150,000) with contents valued at 300,000 - 400,000 pesos ($15,000 - $20,000), a liability coverage of 1 million pesos ($50,000), and glass coverage, insurance will cost between 20,000 and 30,000 pesos ($1,000 $1,500). This also includes the basic coverage which is fire, earthquake, flood, hail, and hard winds.
It would be more expensive to have a hurricane coverage in Quintana Roo because it has a bigger risk for hurricanes. We have earthquakes here in Chapala and Ajijic often, but the chance of a fire burning down your house, generally speaking, is very small since most of the houses in Chapala and Ajijic are not built out of wood.
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But there can be surprises in terms of fire because the fire can start with electrical malfunction and burn the curtain, which will then burn the bed or the rug. The fire will then consume all the other contents of the home, but the home itself will not be damaged by it because it’s made of brick.
It’s important for moral reasons to have liability coverage here in Mexico. You need to be covered because you’re not going to take care of the damages that you caused just because the law obliges you to pay for what you did. Liability coverage is not expensive- a 1 million peso (about US $50,000) liability coverage in Mexico will cost you not more than 1,000 pesos ($50) a year. If you break something in a friend’s home by accident, your liability coverage will cover that. Your liability coverage extends to your family, to your maid and even to your pets.
If someone were to slip and fall on your property, your liability coverage will pay for all the damages. If someone’s working in your house, gets on a ladder and falls, however, that’s different, because he’s not a visitor, he’s a worker.
For workers, you should get a coverage called “working accidents” that’s needed to pay for hospitalization and medical attention. If the worker is going up the stairs, falls down and breaks his arm, the working accidents coverage will cover it. The working accidents coverage in Mexico only includes 3,000 pesos ($150). If you broke your arm after falling from a ladder, hospitalization could cost you around 5,000 pesos ($250), but only 3,000 pesos will be covered.
(Village home in Ajijic, Mexico, pictured.)
Posted March 25, 2017
Francisco Gutierrez - Isaac Insurance
Thirty years ago, when I was working with the second largest insurance broker in Mexico, based in Monterrey, we hit a great success selling homeowner´s insurance to the employees of a large corporation. They were located all across Mexico. During the first month of enrollment, we got more than 2,500 sales. We were all happy!!
But then, the very first day of the policy term we started receiving calls to make claims. Everything happened!!...
Thirty years ago, when I was working with the second largest insurance broker in Mexico, based in Monterrey, we hit a great success selling homeowner´s insurance to the employees of a large corporation. They were located all across Mexico. During the first month of enrollment, we got more than 2,500 sales. We were all happy!!
But then, the very first day of the policy term we started receiving calls to make claims. Everything happened!! Since fires in brick houses that nobody thought would burn, glass breakage, robberies, slip and falls, pets bitting neighbors or visitors, windstorms, floods, accidents to the household members or the help, electrical surges damaging appliances and electronics, vehicles crashing into the house, even an earthquake!! We were filing at least 3 new claims a day, more than 10 on Mondays
And then, the follow-up. What are the company´s requirements to pay for the claims?. Did the clients have receipts for every item damaged or lost? Nope.
We had to hire a couple of extra people just to help with the claims. The loss ratio was 130% the first year, meaning that the company had to pay 1.3 for every peso received in premiums. After our initial success, we campaigned in 2 other corporations with similar results, until the Insurance Company asked us to please stop doing that!
If you buy homeowner´s insurance and you actually get to know what it covers and how to use it, you would file at least 1 claim during a 5 year period, probably recovering what you invested in premiums until that point. The homeowner´s insurance rates, like all other types of insurance, are calculated assuming that the company ends the year with a slim favorable margin, because their actual business is the financial profit.
But not all the policy wordings are equal, and because homeowner's insurance is the most extensive in different types of coverages that can be included, is very important that you shop around, not only for the price, but mainly for the professional advice of an agent able to provide you with what is best for you, rather than just selling you a cheap policy.
By the way, a homeowners insurance policy in the Chapala area for a $200,000 USD house, with many other benefits included, in addition to fire, covering you and your belongings in and out of the house, would cost you between $500 to $600 USD a year (about half of it allocated to Earthquake coverage). If you invested a significant part of your money in buying your house, I would advise you to get homeowner's insurance, and get it from an agent that at least shows you in the policy wording what are the requirements to get paid in case of a loss.
Posted December 22, 2017