Glossary

Mexican Insurance Glossary

Plain-English definitions for the terms you'll see when shopping for or filing claims on Mexican insurance — auto, travel medical, homeowners, watercraft, and the rest. Spanish equivalents in italics where relevant.

This glossary is designed for U.S. and Canadian travelers, expats, and Baja regulars who run into unfamiliar terms when comparing Mexican policies or talking to carriers. Most policies in Mexico are issued in Spanish with English translations, and the underlying legal concepts often differ slightly from U.S. or Canadian equivalents.

If you’re new to Mexican insurance entirely, start with the Buyer’s Guide. For specific products, see the Insurance hub.

Acta: A formal Mexican police or legal report documenting an incident (accident, theft, etc.). Required for many claim payouts.
Actual cash value (ACV): The depreciated market value of an asset at the time of loss. Baja Bound's auto policies pay actual cash value, not agreed or replacement value.
Adjuster(Ajustador): The carrier representative who responds to the scene of an accident or evaluates a claim. Baja Bound's claims page says HDI and Chubb have adjusters located throughout Mexico (bajabound.com/info/claim/claim).
Affiliate: A platform or agency that refers customers to insurance carriers in exchange for a commission. SmartGringo is an affiliate, not an insurance carrier.
Agreed value: A pre-arranged settlement amount for a vehicle or other insured property. The insurer and insured agree at policy issue what the asset is worth, and that amount is paid out at total loss regardless of depreciation. Baja Bound's auto policies do not pay agreed value.
Air ambulance: Aircraft transport for medically critical patients, usually from Mexico back to a U.S. or Canadian hospital. Covered by medical evacuation insurance.
All-risk policy: A policy that covers all causes of loss except those specifically excluded. The opposite of a named-perils policy.
Asegurado: Spanish for “insured” — the person or entity covered under a policy.
Asegurador / Aseguradora: Spanish for “insurer” / “insurance company.”
Bail bond(Fianza): Funds posted to release a detained driver. Baja Bound's auto page lists legal assistance and bail bond, with a coverage limit matching the liability limit, available 24/7 (bajabound.com/insurance-info/auto-suv-pickup-van).
Bilingual claims support: Claim service available in both Spanish and English. Ask the seller which hours and languages its claims line offers.
Bodily injury (BI): Coverage for physical harm to people in an accident. In Mexican third-party liability, BI covers the other party's injuries, not yours.
Broker: A licensed intermediary who can quote policies from multiple insurance carriers. Brokers represent the customer; agents represent the carrier.
Carrier: The insurance company that issues and underwrites the policy. In Mexican auto, the most common carriers behind U.S.-side affiliate policies are HDI Seguros and Chubb Seguros.
Claim(Reclamación): A formal request to the insurer for payment under the policy after a covered loss.
Claim hotline: The phone number for reporting an accident or covered loss. It is printed on the policy.
Claim number: The reference number assigned to a specific claim once it's reported. Required for all follow-ups.
CNSF(Comisión Nacional de Seguros y Fianzas): Mexico's federal insurance regulator.
Coaseguro(Coinsurance): A percentage of a covered loss that the insured pays out of pocket after the deductible. Common on Mexican health and homeowners policies. Different from a deductible.
Cobertura: Spanish for “coverage.”
Collision coverage: Coverage for damage to your own vehicle from a collision, regardless of fault. Part of standard and premium auto tiers.
Comprehensive coverage: Coverage for damage to your own vehicle from causes other than collision (theft, vandalism, weather, falling objects). Part of standard and premium auto tiers.
CONDUSEF(Comisión Nacional para la Protección y Defensa de los Usuarios de Servicios Financieros): Mexico's consumer protection agency for financial services, including insurance. Handles complaints and disputes between policyholders and insurers.
Daños materiales: Spanish for “property damage.” A standard category in Mexican auto liability coverage.
Deductible(Deducible): The out-of-pocket amount you pay before insurance covers the rest of a covered loss. Mexican deductibles are often expressed as a percentage of the insured value rather than a flat dollar amount.
Depreciation: The decline in an asset's value over time. Affects ACV settlements; eliminated by agreed-value coverage.
Detention: Being held by the authorities after an accident. Baja Bound's auto page lists legal assistance and bail bond among its coverages (bajabound.com/insurance-info/auto-suv-pickup-van).
Dwelling coverage: The portion of a homeowners policy that covers the structure of the home itself, not the contents.
Emergency dental: Coverage for sudden dental injury or pain during a trip. Often a small line item in travel medical policies, distinct from routine dental insurance.
Endoso(Endorsement): A formal modification to an existing policy — adding a driver, changing dates, increasing coverage. Issued as a separate document referenced by the original policy number.
Fault determination: The process of deciding which party caused an accident.
Free Zone(Zona Libre): The border strip that extends 21 km into Mexico and includes all of Baja California state and Quintana Roo; entering beyond it means screening by Customs and INM, and a foreign vehicle needs a temporary import permit (Consulate General of Mexico in Montreal, consulmex.sre.gob.mx/montreal/index.php/en/foreigners/services-foreigners/311-travelling-to-mexico-by-land). Sonora has its own vehicle programme, with a free zone running to km 98 of Highway 15 at Empalme (sonora.gob.mx/servicios-y-tramites/7-tramite-de-importacion-temporal-de-vehiculos-only-sonora). Insurance is still required: the federal roads law requires all vehicles on federal roads to carry insurance covering third-party damage (LCPAF art. 63 Bis, diputados.gob.mx/LeyesBiblio/pdf/LCPAF.pdf).
Gastos médicos: Spanish for “medical expenses.” On a Mexican auto policy, this usually refers to medical payments coverage for the insured driver and passengers.
Gestor: A Mexican licensed intermediary who handles paperwork with government offices, often used for vehicle import permits, residency documents, and similar bureaucratic processes. Not directly an insurance term but commonly encountered.
HOA insurance: The master policy held by a Mexican condo association covering the building structure and common areas. Does not cover individual unit interiors or contents — those need separate condo or renters coverage.
Hull coverage: Watercraft equivalent of comprehensive auto coverage. Covers physical damage to the boat itself.
Indemnification: Compensation paid by an insurer to restore the insured to their pre-loss financial position.
Insurance card(Comprobante de seguro): Proof-of-coverage document. Carry it whenever you drive in Mexico.
International coverage: Health or auto coverage that extends outside your home country. Most U.S. and Canadian policies have very limited international coverage; Mexican policies are required for proper Mexico coverage.
Legal aid(Asistencia legal): Lawyer support after an accident. Baja Bound's auto page lists legal assistance and bail bond, available 24/7, with a coverage limit matching the liability limit (bajabound.com/insurance-info/auto-suv-pickup-van).
Liability coverage(Responsabilidad civil): Coverage for damage you cause to other people or property. Mexican federal law requires it for every vehicle on a federal highway, road or bridge (Ley de Caminos, Puentes y Autotransporte Federal, art. 63 Bis).
Liability only: A coverage tier that includes only third-party liability — no protection for your own vehicle.
Loss of use: Coverage for the cost of temporary alternatives (rental car, hotel) while a covered claim is being repaired or settled.
Marine liability: Watercraft equivalent of auto third-party liability. Covers damage you cause to other vessels, persons, or property on the water.
Medical evacuation(Evacuación médica): Transport for a seriously injured or ill patient to another hospital. TME's medical evacuation plan describes evacuation to a hospital of your choice (tmetravelinsurance.com/medical-evacuation-insurance).
Medical payments (MedPay): No-fault coverage for medical bills for the insured driver and passengers, regardless of who caused the accident. Baja Bound's auto page lists medical payments for the driver and passengers (bajabound.com/insurance-info/auto-suv-pickup-van).
Named driver: A driver explicitly listed on the policy. Not needed on a Baja Bound vehicle policy: its FAQ says other drivers are covered as long as they have a valid driver's license on their person, and you do not need to list additional drivers (Baja Bound FAQ, bajabound.com/faqs). Only Baja Bound's driver's-license policies limit cover to the listed drivers.
Named-perils policy: A policy that covers only specific listed causes of loss (fire, theft, named storm, etc.). Less common than all-risk for property.
Out-of-network: Care received from a provider not contracted with the insurer. Usually higher cost-share or full out-of-pocket. Relevant for travel medical when you're treated outside the carrier's preferred network.
Pérdida total: Spanish for “total loss.” Triggered when repair costs exceed a defined percentage of the vehicle's insured value.
Personal liability: Coverage in homeowners and renters policies for damage you cause to others off your property (or sometimes on it). Different from auto liability.
Personal property: Contents inside a home, condo, or rental unit covered under a homeowners or renters policy. Typically capped at a percentage of the dwelling coverage.
Police report(Acta): The official Mexican incident report. Required for many theft and major-damage claims.
Policy(Póliza): The written contract between insurer and insured documenting coverage, limits, exclusions, and terms.
Policy period(Vigencia): The dates the policy is in force. Coverage begins at the policy effective time and ends at policy expiration.
Premium(Prima): The amount paid for an insurance policy. Don't confuse with “Premium tier,” which refers to the highest coverage level on Mexican auto.
PWC (Personal watercraft): Jet skis and similar small watercraft. Usually covered under specific watercraft policies rather than standard boat policies.
Pre-existing condition: A medical condition that existed before the policy effective date. Travel medical and expat health policies typically exclude or limit coverage for pre-existing conditions.
Reclamación: Spanish for “claim.”
Reinstatement: Restoring a lapsed policy to active status. Possible within a grace window for some policies; impossible after the policy has been canceled.
Renewal: Continuing coverage at the end of a policy period. Annual policies usually offer a renewal option; daily policies don't.
Repatriation: Transport of remains from Mexico back to the U.S. or Canada in the event of death abroad. Usually covered under medical evacuation or a separate repatriation rider.
Replacement cost: The amount required to replace property with new property of similar kind and quality, without depreciation. Higher payout than ACV.
Reposición: Spanish for “replacement.”
Responsabilidad civil: Spanish for “civil liability” — i.e., third-party liability coverage.
Roadside assistance(Asistencia vial): Coverage for towing, fuel delivery, lockout service, and basic mechanical help. Baja Bound's auto page lists roadside assistance and towing (bajabound.com/insurance-info/auto-suv-pickup-van).
Robo total: Spanish for “total theft” — when the entire vehicle is stolen, as opposed to a partial theft of contents or parts.
Salvage: The remaining value of a totaled vehicle after a claim is paid. Settlements can be reduced by retained salvage if the insured keeps the vehicle.
SENTRI / Ready Lane: Trusted-traveler programs that speed northbound border crossings. Ready Lanes are CBP's lanes for travellers carrying RFID-enabled documents: the passport card, enhanced driver's licence and trusted-traveler cards are eligible; the passport book is not (cbp.gov/travel/clearing-customs/ready-lanes). Not insurance-related, but practical context for trip planning.
Settlement: The final payment by the insurer to resolve a claim.
Sonora-only insurance: Not a product Baja Bound sells. Its quote form asks one territory question — “Are you only traveling to Baja or Sonora?” — and quotes either a Baja & Sonora policy or one covering all of Mexico (Baja Bound quote form, 4 October 2026; bajabound.com/insurance-info/auto-suv-pickup-van lists a Baja & Sonora Saver discount). A Baja & Sonora policy covers Rocky Point, San Carlos and Kino Bay as well as the Baja peninsula.
Stated value: A vehicle value declared by the insured at policy issue. Usually used as a cap on physical-damage payouts; not the same as agreed value.
Subrogation: The insurer's right to pursue recovery from a third party after paying a claim. Common when the at-fault party has separate coverage.
Suma asegurada: Spanish for “sum insured” — the maximum amount the insurer will pay under the policy.
Temporary Import Permit (TIP)(Permiso de Importación Temporal): The permit a foreign vehicle needs to go beyond the border strip, obtained online at Banjército's site 60 to 7 days ahead or at the border; an expired permit while the car is still in Mexico can mean impound and a fine (Consulate General of Mexico in Montreal, consulmex.sre.gob.mx/montreal/index.php/en/foreigners/services-foreigners/311-travelling-to-mexico-by-land). Unrelated to insurance but required for the same trips.
Theft coverage: Coverage for theft of the entire vehicle (robo total) or contents/parts (robo parcial).
Third-party liability: Coverage for damage you cause to others — their vehicle, their bodies, their property. The core of Mexican auto liability.
Total loss: When repair costs exceed a defined percentage of insured value, triggering a payout instead of repair. Threshold varies by carrier.
Trailer coverage: Coverage for trailers towed behind an insured vehicle. Usually requires a separate rider; rarely included automatically.
Travel medical insurance: Short-term medical coverage for travelers in Mexico. Covers doctor visits, hospitalization, emergencies. Distinct from medical evacuation (which covers transport).
Trip cancellation: Coverage for non-refundable trip costs if the trip is canceled before departure for a covered reason.
Trip interruption: Coverage for unused trip costs if the trip is cut short after departure for a covered reason.
Underwriter: The person or system that evaluates risk and determines whether to issue a policy and at what price.
Uninsured motorist: Coverage that pays for your damages when the at-fault party has no insurance. Less common in Mexican auto than in the U.S.; check whether your policy includes it.
Vandalism coverage: Protection against intentional damage to your vehicle.
Vehicle value cap: The maximum vehicle value the policy will cover. Check the cap on any policy you are considering.
Vehicle Identification Number (VIN): The unique 17-character identifier for a vehicle. Mexican policies are tied to a specific VIN.
Vigencia: Spanish for “policy period” or “validity.”
Watercraft insurance: Coverage for boats, jet skis, and similar vessels in Mexican waters.

Still have questions?

If you ran into a term that isn’t on this list, reach out through our contact page and we’ll add it. For specific products, see the Insurance hub or the Buyer’s Guide.