Under Mexican law, motorists are required to have insurance, or "proof of financial responsibility", in the event of an accident, even if you are not at fault. As a foreigner traveling in Mexico, the only way of demonstrating this financial responsibility is to have sufficient real currency to cover damages, or an insurance policy from a Mexican company. U.S. or any other non-Mexican insurance does not cover your liability for potential accidents, nor does it fulfill the basic requirement for insurance according to Mexican law.
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SIMPLE, STRAIGHTFORWARD. OLD GUYS LIKE THAT. WILL DEFINITELY USE IN 6 MONTHS IF STILL RUNNING...