Known in Spanish as Ley Nacional de Extinción de Dominio, the law enables a judge to immediately order the seizure of a property that is suspected to be part of a corrupt or illegal transfer chain (for example, if previous owners used illicit means to acquire it or build it) and/or if it’s suspected the property is being actively used for criminal purposes.

Legal quagmire if your property becomes entangled

Under this law, a property may be immediately seized without trial if the authorities present a petition to a judge and that judge deems that there are grounds to suspect the authorities have a genuine case.  The state may subsequently dispose of the property even before a trial has taken place. The law is causing some controversy especially in relation to a present owner’s risk of loss due to an illicit transaction history that the owner could not have known about.

If you buy a property in Mexico and, even years later, it’s discovered that the property was transacted illegally you could forfeit the asset and have no recourse to insurance coverages which would become null-and-void in this circumstance.

As the law is relatively new and untested there are no substantive case studies to reference regarding the appeal process.  In any event, legal costs to defend the asset would be substantial even if a subsequent trial ruled in the owner’s favor.

The law covers titled land, titled physical property (residential and commercial) and ejidos (communal land); as well as any assets situated on or linked to the property including valuables, goods, bank accounts, etc.

Definitions of ‘illicit uses’ of the property include —but are not limited to— organized crime, kidnapping or human trafficking, concealment, storage of stolen or illegal goods (e.g. cars, fuel, drugs), extortion, and money-laundering.

The wrong tenants could cause you to lose your Mexican home

This law also places the burden of responsibility of current use of the property directly on the owner.  If you rent your house out and the tenants use it for illegal purposes, then the state can seize the property from you with a writ from a judge.  In circumstances where your rented property is used by the tenants for illegal purposes it may prove impossible to get your home back or get compensated after the fact.

When you rent out your Mexican home you should be absolutely sure that detailed referencing and due diligence has been undertaken on potential tenants and that the people who apply and sign the rental contract are the same people who move in.  The contract should also contain carefully-worded legal clauses which specifically prohibit illicit use of the home.

Speak to your real estate agent or a lawyer or Notary Public to ensure your contract is current in respect of this new legal code.

The information contained in this article is published in good faith and not intended to constitute personal, professional, legal, financial or investment advice, nor replace the services of professional advisors.

Learn more about caring for and insuring your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Latest articles about property rental in Mexico
• Free Guide: House maintenance and home security
• Latest articles about property insurance
• Articles about real estate in Mexico

It’s possible to lose a great deal money (and even a life’s savings) if you are not insured or discover following an unforeseen event or natural disaster that your policy was not adequate or that the insurer underwriting the policy was not financially sound.

This article highlights practical aspects related to property insurance in Mexico to help you understand home insurance policies and choose coverages which are suitable to your needs and that will be adequate in the event you need to make a claim.

Home insurance if you own or rent in Mexico

You can arrange property insurance whether you own or rent a home in Mexico.

If you own a home in Mexico, you can insure the physical structure of the property as well as arrange coverages for loss of personal property at the home, and third party liabilities.

If you are renting a home in Mexico, you cannot insure the physical structure but you can arrange coverages for loss of personal property situated at the home and third party liability in relation to people visiting or working in your rented home.

Uninsurable residential structures in Mexico

Note that certain physical structures, especially risky ones like wood-framed buildings and palapa (palm or straw) roofing structures are usually explicitly excluded from all policies; if you must insure these, be prepared to pay a high premium to have them included in your coverages (it’s usually uneconomic to do so).

“All Risks” —vs— “Named Perils” insurance coverages

Some policies will offer “All Risks” cover, a form of comprehensive coverage that will pay out in the event of most incidents involving your home.

The better policies offer the option to cover catastrophic incidents such as hurricanes, floods, wind, fire, volcanic eruptions, and earthquakes; surprisingly, some Mexican insurers are unable to underwrite some of these events, although specialist US insurers will.

To lower the insurance premium, you can elect to limit certain “Named Perils” assigned to your policy instead of taking All Risks coverage.  When you do this, certain events will be covered while others will not.

Less expensive policies are often the “named perils” type—even though on the surface they might appear to be comprehensive. A good broker will make a clear distinction between these two during its sales offer and demonstrate the cover and price differences between options.

Property insurance —vs— property title insurance

Note that property insurance and property title insurance are different.

Property insurance coverages are paid annually and can underwrite the physical property on the land, your personal possessions at the property, and may also cover third party liabilities related to the property.

Property title insurance is a one-time insurance payment you can buy when you purchase a property that mitigates risks related to unforeseen issues or liens associated with the property’s title.  It must be purchased before you close the property transaction.

Obtaining coverage for all your dwelling spaces

Your policy should cover the main structures of your home space and provide sufficient compensation to rebuild those structures if necessary.

Optionally, you may also cover carports, guesthouses, and other outbuildings including garages, games rooms, cabañas, equipment rooms, bungalows, stand-alone studios, etc.

Some homes in Mexico are composed of several structures (for example, several buildings situated around a central courtyard) and in these circumstances, the insurance rule is usually: everything that is directly connected is treated as one building. Anything that stands alone is considered an additional building.

Insuring your personal possessions situated at the property

A good insurance policy will cover personal goods owned by you, your guests, or domestic employees when they are working at your residence. Coverage for theft of personal property varies, depending on whether it is “scheduled” (specifically listed) or not.

Some policies include coverage for certain valuable property, such as cash, securities, jewelry, fine arts, sporting equipment and property used for business purposes—up to certain limits.

If you need higher limits for specific items of property that you own, this option is available by listing them on a special section of the application and making them a type of ‘named risk.’

Third party liability protection in relation to your home in Mexico

Good home insurance policies provide coverage for personal liabilities to third parties to protect you and your family against any lawsuits or demands presented against you.

For example, if a wall collapses and injures someone who was near it at the time; or the neighbor’s property is damaged due to a falling tree from your garden, a good insurance policy will cover your liabilities in these circumstances.

Policies can also cover injuries to people visiting or working in your home, for example if your housekeeper or gardener injure themselves on the job.

Loss of home use, or rental income

If you rely on your property for work, or to bring in a rental income, you may also choose to include a “loss of use” risk coverage in your policy.

This cover provides for additional living expenses if your house is damaged and cannot be lived in for a time while it’s repaired or rebuilt.

If you rent out your home and rely on this for income, you could take the additional option to cover rental income loss, whereby you are compensated for lost income if your home becomes damaged and unavailable for rental to others (you will need to provide evidence that a rental contract exists).

Rent liability coverage

Some home insurance policies exclude coverage when your home is rented (even occasionally or part time) or add a hefty supplement to the policy’s premium to include renter’s liability as part of the coverage.

If you rent out your home in Mexico (or intend to at some point) and want your coverages to be valid when others are renting the property, check with the provider you get a quote from to see if renter’s liability coverage is included in the premium, or how much more you need to pay in premium to include it.

Insuring your condominium unit in Mexico

Condominium associations in Mexico are supposed to keep a blanket commercial policy in place to cover the entire property.

Typically, this provides insurance coverage for the building as well as communal elements of the property such as pools, garages, the interior walls, fixtures, fittings, and outbuildings associated with the development, or fraccionamiento.

The wording of these commercial insurance policies tends to be very limiting in what they will cover within the terms of a blanket condominium insurance policy and it’s prudent for individual condo owners to arrange separate insurance to mitigate expenses of paying for certain types of damage.

Exclusion of third party liability

Many Mexican-issued insurance policies exclude third party liability and renter’s liability from the standard policy and charge a substantial premium to include these as optional extras. This places an obligation on condominium owners to cover elements not included by the commercial policy on a unit-by-unit basis.

Liability to adjacent properties in the building

Don’t be lured into a false sense of security by condominium blanket coverages: in a situation where an event that happens in your condominium affects an adjacent condominium —for example, a water leak in your shower room that damages your neighbor’s room below— you will be made liable for repairs to yours and your neighbors’ damages.  Having a unit-based insurance policy in place will protect you from the expenses of these sorts of events.

Check the documentation

The key documents to check on your Condo contracts are the ‘Byelaws’ and ‘Covenants’ associated with your condominium property: these are the documents that contain the small print regarding what is and what is not covered by the condominium building’s ‘blanket’ insurance program.

Insurance for beachfront and waterside property in Mexico

It’s possible to insure property near oceans, rivers, and lakes—although premiums may be higher to reflect the additional risks which may arise from storms and flooding that can be more common in these areas.

The online insurance application form will ask you for the Mexican postal code (zip code) of the property, and this is mapped to detailed topographical and statistical data which enables insurers to assess the hydro and meteorological risks that are related to the property and quote accordingly.

Some companies may refuse to insure properties very close to the sea or other bodies of water if historical statistical data show that it’s unviable, although policies may be available from different brokers that will quote for coverage in certain acute circumstances—with higher premiums to reflect the increased risk.

Insurance for homes situated on Mexico’s Yucatán peninsula

If you own —or intend to own— a home situated on Mexico’s Yucatán peninsula, you’ll discover that getting your property insured is more difficult than if it’s situated in other regions of Mexico.

The Yucatán region’s geology, coupled with unique hurricane risks, has made it either difficult or prohibitively expensive to insure homes in this area. However, our insurance associate MexPro offers home insurance coverages in the Yucatán region.

Watercraft insurance in Mexico

A few people live on their boat moored in Mexico, while some people who own homes here near a body of water might also own a boat, a jet ski, or a yacht—and these ought to be properly insured while they are situated in Mexican waters.

The premium you pay for insurance of your watercraft is based on two factors:

• the number of days the craft will be in Mexico, and
• the value of the watercraft.

Personal injury and third-party liability cover should also be taken out in case you become involved in an accident on the water. The better policies also offer legal assistance and ‘bond’ cover in addition to the injury and liability cover.

In legal terms, accidents involving watercraft where people are injured or killed are treated in similar fashion to serious car accidents in Mexico.

If you own watercraft and and spend extended periods of time here, or live here, an annual policy may be a better investment than a short term policy covering specific dates.

Check with the broker providing your quote to find out what options they have for year-round coverage of your watercraft in Mexico.

Learn more about property insurance in Mexico

Mexperience offers detailed insights about property in Mexico for buyers, owners, renters, and sellers.

• Choosing a home insurance policy
• Insuring domestic help and workers in your home
• Third party damage cover
• Latest articles about property insurance in Mexico
• Get a no-obligation online quote for home insurance in Mexico

Policy wording for Mexican property insurance

Property insurance policies sold in Mexico differ from policies you are used to seeing in your home country. The policy wording is unique, and the types of coverage offered by insurance companies is different here, so some things that you would expect to be included as standard, might not be present if you purchase your insurance in Mexico directly from a Mexican insurer.

Familiar policies, fully underwritten in Mexico

To help foreign residents who own property in Mexico to purchase insurance products familiar to them, specialist companies based in the U.S. have developed property ownership insurance policies which reflect the wording, terms and covers included on US and Canadian policies.

The insurance policy is fully underwritten by a Mexican insurance company (by law, it has to be this way), but the U.S. companies work in partnership to create a product that is familiar to those purchasing insurance in the US and Canada, and which is legally sound under Mexican law.  The premiums are paid in US dollars and any pay-outs are also paid in US dollars.

Policies to suit your situation and needs

The home insurance policies available in the market offer a wide range of options, and you can choose what to include and what to exclude as part of your coverage plan.

Depending on where your home is situated in Mexico, the risks (and coverage) you need to insure against will vary. For example, homes near the coast should be insured against hurricane damage and earthquakes, whereas inland only cover for earthquakes (and perhaps flooding, if you home is situated near water) will be needed.

Home insurance policies cover a wide range of eventualities and the most common coverages include reimbursement of costs related to:

• Damage caused by hurricanes and earthquakes
• Damage caused by and wind storms and floods
• Injuries to housekeepers and other workers in your home
• Burglaries and vandalism
• Damages to third parties, e.g. falling trees
• Coverages for owner-specific liabilities, e.g. in condos

You can cover all risks or named perils

Policy options and choices include all risks versus named perils, whether to cover assets like outbuildings surrounding the main property, and the option to insure your personal goods.

• The better policies will include coverages for third party liability: this is  helpful in the event that someone who does not live at your home meets with an accident on your property, or where some damage is caused to a neighbor, e.g. by a falling tree.
• This article about third party liability in relation to your home shares more details.
• Other considerations to take into account when you’re assessing your insurance needs include purchasing cover for any watercraft you may own, as well as special arrangements for condos, where some liabilities are shared and some are owner-specific.

Regardless of the type of insurance you choose, the insurer underwriting the policy is far more important than the broker or agent selling you the product: in the event of a claim, the integrity of the underwriter will determine pay-outs, not the insurance broker.

Learn more about caring for and insuring your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Free eBook: House maintenance and home security
• Latest articles about property insurance
• Articles about real estate in Mexico

It’s therefore sensible to take some time to review the composition of your habitat and living spaces to help mitigate the risk of damage and injury that may occur during an earthquake, making your situations easier to cope with in the aftermath of a strong seismic event.

Effects of earthquakes on your property

Weak earthquakes may not be felt, or cause a gentle sway with little or no discernible impact on objects or the structure of your home. Stronger earthquakes can cause a wide variety of hazards, including:

• hung objects falling from walls and ceilings;
• furniture and other household items can fall or fly across a room;
• food pantries, crockery storage and other cupboards may be affected as shelving or items stored on the shelves fall;
• mirrors and glass can break causing dangerous shards and splinters;
• tiles, fixtures, and fittings can become loose and/or fall;
• live electricity wires may become exposed;
• gas pipes can break, causing a fire or explosion;
• water pipes can burst, causing the house to flood;
• utilities like electricity, telephone (internet), water, and gas may be cut-off;
• swimming pools may crack open and leak;
• strong quakes can cause buildings to move-off their foundations and collapse.

Earthquake insurance

You can insure your Mexican property and its contents against natural disasters, including earthquake damage—and better policies also cover the costs of temporary alternative accommodation if your home becomes uninhabitable.

If you already have a home cover insurance policy, double-check the renewal date and that the policy specifically covers your home for earthquake damage, as not all policies are comprehensive.  You can learn about protecting your house and its contents on our detailed guide to insuring your home in Mexico.

Preparing your habitat for earthquakes

Some forethought and planning around your home situations can make a material difference when a strong earthquake strikes.  Most earthquake-related injuries and casualties occur when people fall trying to run during the shaking; are hit by falling objects or debris; and/or when they are struck by collapsing walls or buildings.  Considering how your habitat is furnished and arranged, and what impact an earthquake would have on the objects inside of it, can help you to mitigate damage and injury.

Bedrooms

Earthquakes can happen at any time, and it’s possible that you’ll experience an earthquake overnight while you’re in bed.  Situate your bed away from glass and don’t hang heavy pictures/frames or mirrors above the bed; consider also what you may have attached to or hanging from the ceiling above the bed.

Children’s rooms

If you have children, carefully review their bedroom spaces for potentially hazardous fixtures, fittings, and toys that might fall and cause injury during an earthquake. If you have children’s play areas in your home, check that any heavy items that could tip or fall are securely fastened, and cross check outdoor play areas (like tree houses) to mitigate the risk of heavy objects falling onto the children in the event that they are playing there when an earthquake happens.  Be mindful that mirrors and other glassware can fall and/or crack and break; consider relocating any hazardous objects away from children’s bedrooms and other play areas.

Tall and/or heavy furniture

Book-cases, wardrobes, and other heavy furniture which appeared solid and stable when you placed it can fall effortlessly during a strong earthquake—and can pose a lethal risk if they fall on you or block vital exits.

Review the current placement of heavy furniture in your home, and screw large pieces to the wall using metal brackets designed for this; consider also how falling pieces could block your evacuation route and make changes as necessary. Packed boxes, stored baggage, and other stowed heavy items should ideally be kept in defined storage spaces, or low-down, so that they don’t cause a falling hazard.

Fixtures and fittings

Review your home’s fixtures and fittings and consider how they may behave in the event of an earthquake.

Picture frames and wall art: Picture frames (especially those framed using glass) and mirrors should be securely fastened to walls using double-hooks, and mirrors especially can benefit from additional fastening with putty (mastique).

Shelving, cupboards and storage units: If you have floor-based shelving or cupboards that store heavy items, for example, in food pantries, crockery storage, laundry areas, tool sheds, etc. it’s wise to ensure that the shelving, cupboard or other storage units are securely screwed to the walls.  When an earthquake comes, these types of units can become unstable and fall over.  Replacing the items could be costly, and if someone is nearby them when the quake comes, units laden with heavy objects could fall on top of people.  It’s prudent to avoid storing heavy objects on open shelves near frequently used work or transit areas.

Overhead hanging objects: Overhead lamps and chandeliers should be routinely checked to ensure that they remain securely anchored, especially in older properties where the wood or cement ceilings they are attached to may be in a state of decay.  If you have a heavy (e.g. iron) chandelier over/near a bed or other space where people rest or meet (e.g. a dining table or desk), ensure it’s very well secured, or consider relocating or removing it.

Bookshelves and other storage: If you have heavily laden bookshelves, don’t place these too near any beds or other resting places, nor along key exit routes, even if they are fastened to the wall.  Heavy cabinets ought to be fastened to the wall if they are in a space near where people work or sit, or near doors or exit routes.  Consider installing latches on high cupboard doors to prevent objects from falling out of them in the event of a quake.

Water heaters

Most water heaters in Mexico are gas-fired.  Your water heater should be securely strapped to a strong load-bearing wall using appropriate brackets.  Ensure you know how to switch-off the gas feed and water supplies.  If you are (re)installing your home’s water heater, consider using modern flexible gas piping instead of metal pipework.

Learn more about caring for and insuring your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Further advice about how to plan and what to do during and after an earthquake is available online.
• Read our free guides about house maintenance and home security
• Latest articles about property insurance
• Articles about real estate in Mexico

This article introduces you to property insurance choices and guides you through important considerations as you search for and choose a home insurance policy for your needs and lifestyle situation.

Principal coverages offered by insurance policies for your home in Mexico

Depending on your needs, circumstances, and budget, you can insure your property entirely or partially.

The insurance premium will depend on key variables related to the risks you want underwritten, including: the location and type of your property, its age and replacement cost, and what events you want coverage for.

You can insure your home in Mexico for:

• Structural damage caused by natural phenomena like wind, floods, earthquakes and hurricanes, as well as damage caused by acts of vandalism and burglary (owners only).
• Loss or damage of personal possessions in the event of flooding or theft (whether you own or rent).
• Third party liabilities related to owning or renting property, for examples if a tree falls on your neighbor’s house or your housekeeper is injured while working in your home (whether you own or rent).

Property insurance policies in Mexico

Property insurance policies in Mexico are different to policies sold in the U.S. and Canada. The policy wording is different, and the types of coverages offered are different, so some things that you might think are included as standard, might not be if you purchase your insurance in Mexico directly from a Mexican insurer.

To bridge this gap, specialist companies based in the U.S. have developed property ownership insurance coverages which reflect the wording, terms, and coverages typically included on US and Canadian policies.

The insurance itself is underwritten by Mexican insurance companies (by law, it must be this way), but the U.S. companies work in partnership with Mexican underwriters to create an insurance coverage that is familiar to those purchasing insurance in the US and Canada (or those who want a US-style policy), and which is legally valid under Mexican law.

Some homeowners in Mexico purchase property insurance from a Mexican insurer direct that charges premiums in Mexican pesos and pays out in Mexican pesos; others purchase from a specialist US-based company that offers US style insurance with premiums in US dollars and pay outs in US dollars.

Buying insurance for your home in Mexico

Should you buy your insurance from a local Mexican broker or a specialized US firm?  Here are some key points to consider about each route:

Buying from an insurance broker in Mexico

When you buy home insurance from a Mexican broker you will typically:

• obtain coverages sold with Mexican-style terms and characteristics, often different to those offered in the US and Canada and which may offer less coverages or have limitations you are not accustomed to;
• have policy wording presented in Spanish, so you will need to be able to read Spanish fluently or have someone translate and/or explain the policy terms to you;
• need to file insurance claims in Spanish and any discussions or disputes about claims will need to be argued in Spanish; you will need to get an interpreter to deal with claims if your Spanish is not that good;
• pay your insurance premiums in Mexican pesos and any claims will be paid out in Mexican pesos.

Buying insurance from a specialist US firm

When you buy home insurance from a specialist US firm you will typically:

• obtain coverages sold with US-style terms with the same kinds of characteristics you see on insurance policies offered in the US and Canada;
• have a policy sold and worded in English;
• be able to file claims and undertake discussions about claims in English;
• pay your premiums in US dollars with any claims paid out to you in US dollars.

Should you choose a Mexico or US based home insurance policy?

If your Spanish is good, you have a decent local insurance broker contact, and you’re satisfied with the coverages offered by a Mexican-style insurance policy, then a local insurance policy will suffice, although there’s no harm in obtaining a quote offered by US-based policies to compare coverages and rates.

We recommend that you consider the services of US-based specialists set-up specifically to service foreign-home ownership in Mexico if your Spanish is not fluent and if you don’t have much experience of buying insurance in Mexico.

It’s also important to consider that, in the event you need to claim, you will find yourself in a stressful situation, and having an insurer that has issued a policy in English, in terms you are familiar with, and covering events which you are used to seeing covered in an insurance policy will be worth any additional premium on the day you may need to make that telephone call to file a claim.

Further, US-led policies can include coverages (for example, third-party liability cover) as standard, whereas many Mexican policies do not cover these without them being specifically scheduled—and with significant additional premiums.

Learn more about property insurance in Mexico

Mexperience offers detailed insights about property in Mexico for buyers, owners, renters, and sellers.

• Practical checklist for home insurance coverages
• Earthquakes in Mexico
• Hurricane season
• Windstorms in Mexico
• Latest articles about property insurance in Mexico
• Get a no-obligation online quote for home insurance in Mexico

Comprehensive guide to real estate in Mexico for buyers, owners, sellers and renters—continually revised and updated.

Extensive and detailed guide to real estate in Mexico

Our comprehensive guides to real estate in Mexico introduce you to essential information about property in Mexico whether you are:

• Renting property in Mexico;
• Buying a home in Mexico;
• An owner who needs to insure and maintain the property;
• An owner who plans to rent a property in Mexico;
• Selling your home in Mexico; and
• Working with Real Estate Agents in Mexico.

Property rental in Mexico

We publish detailed guides about all aspects of property in Mexico, including renting residential property here.

Property purchase in Mexico

Connect to detailed and exhaustive guides about buying and owning property in Mexico.

Owning and maintaining a property in Mexico

Browse detailed information that helps existing property owners manage, maintain, and insure their property in Mexico.

Insurance for your home in Mexico

Helpful guides and insights to help you consider how to get the right level of coverage for your home and property in Mexico, including coverage against third party liability damages.

Selling your home in Mexico

When you come to sell your residential property in Mexico, our guides and articles give you practical insights to help you prepare, market and sell your property.

Working with realty agents in Mexico

Insights and tips for finding and working with a local realty agent in Mexico, whether you are renting, buying or selling a property.

Learn more about real estate in Mexico

We continually update our guides and articles about matters related to property and real estate in Mexico.  Connect to further resources for insights and connections:

• Latest insights about real estate in Mexico
• Latest insights about renting property in Mexico
• Tips and insights about insurance for your Mexican home
• Latest insights about realty agents and agencies
• Connect to professionals who can help with property closings

Most of homeowners are aware that property insurance helps to protect the investment of what is often our most valuable asset.  If you have a mortgage, the bank usually insists that you carry property insurance as it protects them, too. Homeowner’s insurance can also protect from liability in those instances when a third party is hurt on the property.

Severe damage can make a home uninhabitable

When your Mexican home is seriously damaged by storms, flooding, fire, or a natural disaster, far more than your financial investment is at risk.

If your home becomes uninhabitable for a time, you’ll need to evacuate while repair works are undertaken, and you and your family may suddenly be seeking temporary housing at a hotel or other fixed-term rental.  Depending on the amount of time it may take to complete repairs to your home, the out-of-pocket expenses can quickly add-up.

“Loss of use” provisions in property insurance

However, if you have planned well and are protected by a “loss of use” provision in your property insurance policy, you will be able to move into rental accommodation while your claim is being adjusted and repairs are being made without incurring living expenses that are higher than your ordinary outgoings. This can help you to protect your savings, or stay out of debt, and return your life-situation to its normal rhythm as soon as practicable.

In addition to paying for temporary housing, you may also be covered for moving expenses and temporary storage of your home furnishings. Policies vary, and the total monetary amount and length of time you are covered for will be determined by the provisions of the coverage you arrange.

Depending on your policy, you may also qualify for help with restaurant bills (beyond what you and your family might spend ordinarily on food): after all, if you can’t cook in your own kitchen, you will still need to eat —typically in restaurants— until you can return home.  Your insurer might also provide some immediate help with replacement clothing if yours is damaged or not available.

Loss of rental income might be covered

If you rent your property out and your tenants are affected by the damage to your home, some policies offer a provision to pay you for lost rental income; and tenants might also qualify for property insurance benefits if they have had losses or were forced to move out. Check with the policy you purchase to see what the details are if you rent out your property part-time or full-time.

‘All-risks’ policies provide comprehensive coverage for your home

While the likelihood of your property becoming damaged to the point of being uninhabitable is slim, disasters do happen—and not always to ‘somebody else’.  An affordable all-risks homeowner’s property insurance policy is the best way to ensure that major damage to your home is going to be repaired, your life can continue as normally as possible in the meantime, and you won’t be financially crippled by the event.

Our insurance partner MexPro remarks that it’s best to think of property insurance premiums as part of the total cost of owning property—as it costs much less get adequately covered than it would be to try to recover from a major loss without insurance.

Learn more about caring for and insuring your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Free eBook: House maintenance and home security
• Latest articles about property insurance
• Articles about real estate in Mexico

However, some types of property in Mexico are only available for purchase under Agrarian terms, and while this type of property transfer gives you possession, it does not offer legal title.  This article explains the difference and explores the practicalities of purchasing land or property on Agrarian terms.

Not all land is titled land

After the 1910-1917 Revolution, most of Mexico’s lands were divided into Ejidos: large land parcels which were owned collectively by many different people —often groups of families— who had the right to work the land, usually for growing crops and raising livestock.  Large swathes of Ejido land continue to exist today, and while there is a legal process to ‘convert’ Ejidos to legally-titled property, the process is involved and expensive.  It’s usually undertaken by specialist companies on large parcels of land which are then sub-divided and sold to property developers for use in residential, commercial, and tourism developments.

If you’re seeking something off-the-beaten track in Mexico, you might find that certain properties you’re offered —some with very desirable/idyllically-located homes built on them— are not legally titled but instead classed as communal property.  These types of properties are most usually situated in rural or semi-rural areas and might only be available for purchase under an Agrarian arrangement.

Practicalities of land possession vs land title

Many people purchase, pass quiet enjoyment of, and sell their right of possession of untitled properties without any trouble. However, if a property you fall in love with is only available on Agrarian terms, it’s as well to be aware of the practicalities and risks.

No legal title

Property designated to you under an Agrarian arrangement does not constitute legal title: your possession of it holds no force in Mexican civil law and any matters related to it will only be heard by the Agrarian Court (or Assembly) which adheres to its own code.

No title deed

When you purchase right to possession instead of title, you will not receive a Title Deed enforceable in a civil court and the property will not be registered on the national property register. Instead you receive two important documents:

• Cesion de Derechos (Transfer of Rights) and
• Constancia de Posesion (Record of Possession)

The first document records the previous holder(s) yield of their possession of the land, and the second records your current possession of the property.  When you sell, you will yield possession in the same way that the previous holder yielded to you.  This process is managed entirely through the local Comuneros, not the civil courts.  The property might or might not be listed on the national agricultural land register.

No finance, collateral value, or title insurance

These properties can only be purchased with your own money: you cannot take out a mortgage on them; you cannot use them as collateral; and you cannot obtain title insurance for these properties.

Difficult or impossible to insure the property

Civil law requires you have to have legal title to something before you can insure it.  It’s difficult (and may be impossible) insure untitled properties, because when you claim on a policy, the insurer will demand to see proof of legal title, especially for larger claims; thus any structural damage caused by earthquakes, floods, storms, etc. may not be insurable and you’ll need to pay building repair or reconstruction costs out-of-pocket.

If you hold land on agrarian terms, cross-check this issue with the insurance agent or company and if they say they’ll insure untitled property, obtain unambiguous pledges in writing to ensure that claims are not rejected after the fact due to an absence of legal title.

Transfer and sale on Agrarian terms only

You can transfer these properties to others through a private contract or bequeath transfer of them in your Will, although the beneficiaries will inherit the land on the same Agrarian terms as you did when you purchased it.  When you sell the property, the buyer will need to agree to purchase on Agrarian terms; this significantly reduces the potential buyer pool as most people seek legal title, not a Record of Possession, when they buy property in Mexico.

Disputes cannot be settled in Mexican civil law courts

If a dispute arises regarding the property, you must abide by the code of the Agrarian Court (sometimes referred to as Asambleas, or Assemblies) to resolve it; you cannot seek any remedy through Mexican civil law courts.

Tips when purchasing Communal or Agrarian property in Mexico

Mexicans and foreign residents buy and sell property on agrarian terms every year and transactions can pass without hindrance provided that the terms are known and understood by the parties and that proper local protocols are adhered to.  Here are some tips if you are intending to purchase land on agrarian terms.

Get a clear understanding of what you are buying

It’s not unheard of that buyers (Mexicans and foreigners) have been sold property given the impression that the ‘title’ sold was a legal title when in fact it is a Record of Possession under Agrarian terms.  A good Notary Public will ensure the buyer is aware of the land’s legal situation before a sales transaction takes place.

Understand the protocols and documentation

When you purchase agrarian land, you normally receive a Cesion de Derechos (Transfer of Rights) document and a Constancia de Posesion (Record of Possession) document.  Any other documentation (including ‘title deeds’) are unlikely to be recognized by agrarian courts/assemblies who adjudicate on all matters related to communal land transfers in their area.  The procedures and protocols for land transfer are distinct to those under civil law, and buyers and sellers (or their Gestor, see below) often have to attend a meeting with local Comuneros at one of the regular assemblies to discuss their plans and intentions in regard to any land transfer.

Hiring a local ‘Gestor’

If you need advice about a property, or you need to ‘regularize’ the status of a property purchased on agrarian terms, you will probably be advised to hire a local Gestor—a manager / representative who specializes in these matters.  That person will attend the local agrarian court (or assemblies) and petition issues on your behalf with the local community leaders.

Due diligence

A good realty agent will be open and transparent about the property’s legal status; however the ultimate responsibility lays with the buyer.  If you are buying property in (semi)rural areas, a unique property, or a brand-new property, it’s important to be mindful about the legal status of the land the property is on (or the land you intend to build on).  Choose a good Notary Public, and consider also hiring a lawyer specializing in land matters to make additional cross-checks if you harbor any doubts. Ask direct questions in regard to the property’s legal status and title.

Pay the local property tax

If you buy a property on agrarian terms, pay the Predial — local property tax — every year at the local Municipal office.  If the previous owner has not been paying this, you may need to back-pay the tax to ‘regularize’ the property’s Predial records and bring payments up-to-date.

Some desirable properties don’t offer legal title

There are foreign residents in Mexico living in homes which are held on Agrarian terms, and aware of that fact: some properties which people really want to dwell in are simply not available through the civil property registry process and they take-on the property knowing the practicalities and risks of doing so.

For the majority of foreigners who buy land or property in Mexico, full legal title will be readily available to them.

However, if you’re a buyer who’s seeking something unusual —rural or remote, perhaps something unique situated in the Mexican countryside— you may have to weigh-up whether you value the experience of living on that property with a Record of Possession more highly than legal title, and take your decisions accordingly.

Further reading

You can learn more about buying, selling, owning, and renting property in Mexico on our extensive guides to Mexican Real Estate here on Mexperience.

If you need assistance with a property transaction, we recommend you talk with an experienced Real Estate agent, and/or consult with a Notary Public in the State where the property is situated.

The information contained in this article is published in good faith and not intended to constitute personal, professional, legal, financial or investment advice, nor replace the services of professional advisors.

You don’t have to be legally resident to own a home in Mexico

You do not have to be resident in Mexico to own property here, so there is no need to qualify for residency status under the immigration rules to buy a home here— whether directly, or through a property trust.

However, when you sell the property there are certain property capital gains tax allowances that you may access if you are resident in Mexico.

Mexican law on property ownership

Mexican law on property ownership is comprehensive and provides protection for the seller and the buyer in all property transactions provided that the law is followed, and you (most usually through a Notary Public) ensure that all necessary documentation is present and that the procedures are adhered to.

Mexican law provides for private ownership of land by foreigners, and its law is specific about the way in which land rights should be transferred from seller to buyer, and what type of lands are not eligible for public ownership.

A Notary Public will guide you through the details of these, but generally:

• Property may be purchased and owned outright for residential use by foreign nationals outside of the 100km (~62 mile) restricted land border zone, or outside of the 50km (~31 mile) restricted coastal zone;
• Inside of these restricted border and coastal zones, foreign nationals may own land through a fideicomiso (a property trust) which is set up through a local bank and provides for ownership of the land and property in all but name.

The Mexican Constitution forbade foreign nationals from owning property that was within the restricted border zones. This law was intended to protect Mexican soil from foreign invasion, and a property trust provides a means for non-Mexicans to buy and hold land and property if it’s physically situated within about 30 miles of the coast, or within about 60 miles from a land border.

Fideicomiso, property land trusts in Mexico

To enable non-Mexican persons to invest in land and property inside the restricted zones protected by the country’s constitution, the Mexican government introduced a system of land trusts—essentially a special type of investment ‘wrapper’ that enables you to legally and securely hold title of property in all but name.

In practice this means that any non-Mexican national who wants to buy home with an ocean view, or near the beach or a land border with Mexico, they can except that it will be by means of a special property trust, which is set up and managed through a local Mexican bank.

The trust holds the deeds to the property, and you and/or other persons named in the trust are sole beneficiaries to that trust—and by extension, to the property that is folded into it.

The trust gives full rights to do whatever you like with your property:

• it can be developed (in accordance with local planning regulations),
• rented or leased;
• sold, or given away.

In other words, this trust enables you to own the property in all but name.

The trust also enables you to name a beneficiary upon your death, and you do not need to have a Mexican Will for your wishes regarding the trust to be executed.

Some people choose to buy Mexican property through a trust even if the property is not situated inside the restricted zone, as part of their estate planning preparations.

The role of the Notary Public in Mexico

The Notary Public is the most important legal person you will deal with when you make a property purchase investment in Mexico.

Under Mexican law, the title deed to the property must be prepared by a Notary Public, and the Notary is also responsible for calculating and reporting tax duties owed to the Mexican tax authority arising from any property transaction.

As a buyer, it is your right to choose the Notary Public you wish to work with, and it should be your first port of call after you have agreed in principle to purchase a property in Mexico.

Experienced buyers choose their Notary Public, independent of the seller’s preference or advice.  The Notary Public will ensure that all documentation and permits are in order so that the transaction can proceed.

Read more about finding and working with a Notary Public in Mexico.

‘Ejido’ land and Title vs Possession in Mexico

You should be aware of ‘ejido’ land in Mexico, as there is a lot of it; and while many properties and developments now built offer a legal title deed, some properties continue to be transferred on ‘agrarian’ terms.

About Ejido land in Mexico

Ejido (agricultural) lands have a long history in how they came into being; these properties are akin to “commons land.”

The ejidos are usually owned by a community of local people and possession of the land is passed down through generations within the communities which own the parcels.

These land parcels do not have legal title (property title deeds – see next section) and any matters and disputes related to them are dealt with by local comuneros, at agrarian courts, usually termed Asambleas —assemblies— that meet about once a month and are led by the elders of the local community.

Legal Title vs Possession

There is a distinction between ‘commons’ land and land that is registered with a Title Deed recognized and enforced by Mexican civil law courts.

Some types of property in Mexico, especially rural or semi-rural properties —and some that are quite desirable— are only available for purchase under Agrarian terms, and while this type of property transfer gives you possession, it does not offer legal title.

Read more about buying and having property without title deed in Mexico

Title insurance for your Mexican property

Some buyers consider taking out title insurance on the property they buy in Mexico. Title insurance covers you should the property you buy subsequently turn out to have liens associated with it.

This is especially relevant if the property you are buying has been privatized, having previously been classified as being “ejido” (or “common”) lands (see previous section); but even if this is not the case, title insurance will protect you if any other previously unforeseen lien or charge is brought against the property before you took possession of the title deed.

Rates for title insurance are around the equivalent of USD $5-6 per USD $1,000 of the property’s sale value; payable once only at the point of purchase, before you close.

Consult a realty agent or other legal or consulting professional regarding matters relating to title insurance. There are several insurance companies that now offer title insurance for Mexican property and, as the number of providers increase, rates should become increasingly competitive.

Choosing the right location for your purchase

As with property purchase in any country, the location in Mexico where you choose to buy is all-important. It’s better to buy ‘less house’ in an optimum location than to purchase ‘more house’ in a sub-optimal location.

Choosing places to live in Mexico

To help you discover and explore potential places to live here, Mexperience publishes a curated list of locations to consider for living, working or retirement in Mexico—organized by popularity and notoriety and classified by the location type

Do the (back)groundwork

It’s unwise to buy on impulse in an area based on your first impressions, especially if you’re on a leisure visit there.

It’s prudent to be familiar with the area and the locale in that area where you intend to invest. Also ask yourself how marketable the property is in its current condition and location, especially if you are planning to rent it, or should you want to sell it later.

You may want to rent something nearby to start with and get a feel for the place. Once you’re living locally you can assess things like the atmosphere, the neighborhood in general, and get to know the locals so that you can get a genuine understanding for what it’s like to live there.

Match your needs with your location

Consider your current and changing lifestyle needs as you make your choices about the location for your property investment.

Real estate purchases require patient capital in Mexico as not all markets are as fluid as places in the US, Canada, or Europe can be—it might take more time to sell a property than you imagine.

Ongoing management of your property

Learn more about maintaining and securing your home in Mexico here on Mexperience.

Learn more about property in Mexico

Mexperience offers detailed insights about property in Mexico for buyers, owners, renters, and sellers.

• Latest articles and insights about real estate in Mexico
• Working with a realty agent in Mexico
• Insuring your Mexican home
• Enjoying your home and home life in Mexico

What is ‘Total Cost of Ownership’?

Total Cost of Ownership (TCO) is a moniker that describes a financial estimate used to express the total direct and indirect costs of owning something over time.  This article highlights the principal costs which make up the ‘TCO’ of residential property in Mexico, including some of the less apparent and sometimes overlooked costs associated with buying and owning property here.

Up-front property purchase costs

Before the exchange of a property can take place, buyers will have some up-front costs to budget for; for example:

Discovery visits

If you don’t live in Mexico yet, or if you live here and plan to move to a different region in Mexico, you will need to budget for transportation and accommodation costs to visit the place(s) you are exploring for property purchase.  We strongly recommend that you never purchase property in Mexico “sight-unseen;” it’s wise to always visit the location and locale, and the properties (or building site) that you are interested in buying, in-person.

Buyer surveys

While these are not common in Mexico, some buyers may choose to hire a professional building surveyor to inspect the property before they make an offer to ascertain the state of the current build and costs that might be required to ‘make-good’ any dilapidation, and to ensure that there are no severe structural faults (for example, that might have been caused by earthquakes or natural land subsidence) that could be expensive to deal with, or perhaps even impossible to rectify without reconstruction.  Surveys are more commonly undertaken on older properties, but any buyer can hire a surveyor to check any building if they wish to do so and if the seller objects to a surveyor’s visit, then that might be a warning sign to the buyer.

Property valuation reports

Some sellers will hire a professional property assessor to undertake a study of the property and its neighborhood and produce a property valuation report.  In Spanish, these are called an Avaluo and they cost between US$200-$300 to get commissioned by an experienced professional.  Buyers are advised to do their own research and not take these reports as Gospel. (They are commissioned by the seller, after all.)  Some buyers might commission their own valuation report; this is not a common practice, but not impossible if the seller is willing to allow an independent assessor to visit the property.

Property purchase closing costs

‘Closing costs’ is a term that describes the fees and charges that buyers need to pay when they complete a legal property transfer.  Once a buyer has made an offer and had that offer accepted, a contract will be drawn up to begin the property exchange procedure, and the assignment of closing costs will usually be documented in the contract to avoid misunderstanding between the parties.  These usually include how and who will pay costs such as Notary Public fees, sales taxes and any other charges that may be required to secure the property’s legal transfer.  Closing costs vary; as a rule of thumb they may range between 5% and 10% of the property’s sales value.  This should be priced in to your TCO as they’re part of the overall investment.

Ongoing property costs in Mexico

When you have taken possession of your Mexican property, there are a range of costs which may not be immediately apparent, but that ought to be taken into account when you calculate your budget.  These include:

Property taxes

In Mexico, the annual property tax is known as the Predial.  It’s pay-able by property owners once a year at your local Municipality.  Some regions send a bill, others don’t but all run local ad campaigns reminding property owners to pay.  Rates vary depending on the state, the area, and the size of your home. Typically, your property tax bill in Mexico will equate to a small few hundred dollars per year and could be less than US$100 a year if your home is small and in a rural area.  You can learn more about property taxes in our Mexico Cost of Living Guide

Property service fees

If you purchase a condominium, apartment, penthouse, or a property which is part of a gated community, you will need to contribute the ongoing maintenance and service fees which pay for the amenities and and services provided at the property.  These services may include a swimming pool, gym, club house, golf course, gardens and other common areas, sports facilities (e.g. tennis courts) as well as services like watering the lawns, lighting the common areas and paying for gate security/access if this exists on-site.

If you buy the property from new, the annual services may start out quite low, because everything is new and very little maintenance is required.   In due course, buildings will need maintenance and repairs done to them, and sometimes the owners may be asked for a lump sum to pay for a major project—for example, the swimming pool may need major repair or maintenance.

Co-operative ownership of spaces and services is a great way to enjoy facilities; for example, the cost of running a swimming pool between twenty owners is far less than maintaining your own, and it’s also more environmentally friendly as the resources are shared across a defined community.   However, when you buy into a shared community, be sure you understand what the maintenance and service fees are, and be realistic about their (highly) likely need to increase over time, especially if you buy into the project when the building is brand-new.

Land trust fees

If you are not a Mexican citizen and plan to buy property within 50km (~30 miles) of the Mexican coast or 100km (~60 miles) of one of Mexico’s land borders, the law requires that the land be held in a Trust, known as a Fideicomiso.  (This is due to Mexico’s constitution prohibiting foreigner’s direct ownership of land near borders and the sea.)

The Trust that is set up when you purchase property through it ensures that the asset becomes yours in all but name. Trusts are usually set up through a local bank, and all banks in Mexico have a department dedicated to servicing Trusts for foreign property owners.  Trusts carry an initial set-up fee, plus an ongoing yearly fee to maintain.

The exact fees vary depending on the value of the property transaction, but set-up costs are around US$1,000 and ongoing Trust fees can range from between US$500 and US$2,000 per year.  Even at the lower range of the fee scale, this is a recurring cost that you need to take into account when you purchase land or property near the sea or a land border in Mexico.

If you purchase land or property inland of these distance limits, there is no obligation to set-up a trust and you may own the property in your own name. (Some owners choose to place the property into a Trust anyway, for estate planning purposes.)

Electricity supply to your home

To the surprise of many foreigners, electricity costs can be high in Mexico relative to local earnings, although if you keep your consumption in check, electricity can conversely be quite inexpensive here.

To keep your electricity bill low in Mexico you must remain within a subsidized ‘allowance’ of energy consumption every sixty days (the billing cycle).  The allowances vary by state and region, and local climate is taken into consideration; for example, if your home is situated in a hot climate zone, there is a higher subsidy (allowance) during the hot months, to help you cool your home.

If you exceed your subsidized allowance, two things happen: first, your unit cost increases for the entire amount consumed, not just the amount above the excess; second, the generous government subsidy is withdrawn —shown as a specific credit subtracted from your bill— leaving you to settle the entire so-termed “true” cost of the electricity.

The use of a modern ceiling fan consumes a low amount of energy; however, air conditioning units consume a lot of electric and these will usually cause a property to exceed its ‘subsidized’ kilowatts usage limit if used liberally, and you’ll need to budget for this during the hotter months of the year. You can learn more about electricity prices in our Mexico Cost of Living Guide.

Drinking water supply

If you live somewhere like the US or Canada, you’ll be accustomed to having potable water piped directly to your home, ready for human consumption straight from the tap.

Good quality hotels and resorts in Mexico purify their water systems so that guests may enjoy the same arrangement.  When you take possession of your home in Mexico, the water supply might or might not be fit to drink straight from the tap.  It’s a moot point: some people say it’s perfectly drinkable, others say no.

The truth is that it probably depends upon where your home is situated.  Many factors affect this issue: the supply itself, but more often the pipes which transport it to your tap.  In any event, most foreigners (and many Mexicans) buy bottled water.

A vessel containing twenty liters of drinking water will cost you between $15 and $40 pesos (US$1.60-$2.60), depending upon where you are situated in Mexico, and whether you pick it up yourself or have it delivered.  This can add around US$300-$400 a year to a household budget for two people. You can learn more about water systems in Mexico here on Mexperience.

Property management fees

If you won’t be staying full-time at your home in Mexico, you’ll need to hire someone to manage the property for you while you’re away.   Vacant properties are a favorite target for burglars and, in any event, it makes good sense to have someone looking after the property in your absence not only to mitigate burglaries, but to ensure the property is kept clean and checked after heavy storms, hurricanes, or earthquakes.

The precise fees will depend upon how much work the property manager needs to do.  If the property will be left vacant, and simply needs the post, bills, a bit of cleaning undertaken and routine checks made after storms, etc., the cost could be limited, perhaps US$75-$100 a month.  If you plan to rent out your property then property management fees will increase to reflect the extra services the property manager undertakes such as reception of your guests and providing a local point of contact should they need anything or something goes awry during their stay.

You’ll also have to pay agency commissions if a renter is found on your behalf.  Sometimes the property manager and the realty agent are the same person and sometimes they are not.  In any event, there are two separate fees to account for: the management fees and the rental fee commission.

Home insurance coverage

Sometimes overlooked, but vitally important to protect what is likely your most valuable physical asset in Mexico, is home owner’s insurance.

If your home is on or near the coast, storms, winds and flooding are key risks; elsewhere, risks from earthquakes and volcanic activity as well as flooding from any nearby rivers and lakes need to be mitigated with an adequate home insurance policy to ensure that you are not left with huge bills (or substantial loss of your investment) should unforeseen events take a toll on your property.

Our detailed guide to insuring your home in Mexico explains what you need to know and key considerations you should take into account when choosing an insurance policy.

Property sales fees

One day, you or your heirs will probably want to sell your Mexican property.  We mentioned the cost of commissioning a sales valuation report earlier, and there are a range of other costs and fees that sellers need to take into account when they decide to sell their residential property, including the agency costs if a realty agent is retained to market the property.  Our article about the costs and taxes of selling property in Mexico explains these in detail.

Learn more about property in Mexico

Mexperience offers detailed insights about property in Mexico for buyers, owners, renters, and sellers.

• Latest articles and insights about real estate in Mexico
• Working with a realty agent in Mexico
• Insuring your Mexican home
• Enjoying your home and home life in Mexico

Protect your personal items and defend against litigation

Although home insurance is not obligatory by law in Mexico (if your property is mortgaged, the lender may insist the property is covered), it’s prudent to factor-in a property insurance policy to your annual budget to protect your assets and, importantly, to defend against third party liabilities.

Third party liability in relation to home ownership doesn’t seem as obvious a risk as it is with driving a car, but in the event of an accident or mishap involving your property, your liabilities as home owner to third parties will become apparent.

Storm damage can leave you liable

Consider the trees in your garden. Trees falling in a wind storm can come down with tremendous force, and will easily cause material damage to your own property—and possibly to your neighbor’s. In acute cases they can cause bodily harm or fatalities.  Mexico experiences stormy days, even in the highlands away from the coasts, and some of those storms will cause trees to fall down.  Garden walls can also be subject to sudden and unexpected collapse, especially during an earthquake, or if they are old or have weakened foundations.

Condo unit ‘bloc’ coverages are limited

A common situation where homeowners unwittingly become exposed to liabilities is when they own a condominium, or live inside a gated community. They think the insurance policy —paid for through their Home Owner Association fees— that covers the building or the estate also covers them personally.  It usually doesn’t.  For example, when a water leak from the kitchen or shower room in your condo causes damage to units below yours, the repair bill becomes your responsibility.

Domestic workers and accidents

Another situation where homeowners can become liable is in relation to the domestic help they employ.  A lot of foreign residents in Mexico hire maids and gardeners.  If your maid falls down the stairs when she’s cleaning, or your gardener hurts himself while working in your garden, you become responsible to them in those situations.  Read this article to learn more about insuring domestic workers in your home in Mexico and how an adequate insurance policy can cover you.

Home insurance as an integral part of  your budget

Home insurance policies are often overlooked and sometimes ignored as an unnecessary expense by foreign homeowners here in Mexico, especially those with homes situated away from hurricane-prone areas. While hurricanes are among the most apparent risks in relation to property, powerful wind storms inland can also cause serious property damage, and give rise to third party liability in relation to events and people related to your home: if for no other reason, you should consider your insurance arrangements to mitigate those liabilities.

Learn more about caring for and insuring your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Free eBook: House maintenance and home security
• Latest articles about property insurance
• Articles about real estate in Mexico

Domestic workers can include housekeepers, nurses or other home assistance;  gardeners, pool cleaning and maintenance workers; and may occasionally include other specialized workers like plumbers and electricians.

You can mitigate the cost of liability

This article describes certain risks that can emerge from having people working in your home and how a suitable insurance policy can mitigate the financial costs and related treatment expenses if someone working there suffers an injury, as well as defend you against civil liability costs in the event of a major adverse incident.

You can obtain home insurance coverage, including third party liability, whether you own or rent your home in Mexico.

Accidents can and do happen in the home

When you have a regular helper or helpers working in your home, you ought to consider what would happen if one of those workers or helpers has an accident and needs treatment, or becomes disabled, or dies.

Examples include:

• if your housekeeper slips and falls badly, and sustains a substantial injury;
• if your gardener injures himself using a power tool, or falls off a ladder;
• if the pool maintenance guy trips and falls into the pool, knocking his head during the fall.

Accidents happen and if someone working in your home (whether the property is owned or rented) suffers an injury or worse, you can become liable for:

• expenses related to their treatment;
• loss of income if they’re unable to work due to an injury in your home; and,
• in the event of their death, you might face a civil lawsuit.

Civil liability can cause financial hardship

Additional risks arise where someone working in your home inadvertently causes an accident and hurts someone else or damages someone else’s property; or where an injury suffered by someone working in your home prevents them from working for a time and they pursue you for loss of income.

Examples of this include:

• the gardener cuts down a tree branch that falls on an adjacent property and injures your neighbor;
• a plumber who comes to replace old pipework on your property causes the condo below yours to be flooded;
• the housekeeper watering plant pots that are placed on a wall accidentally causes the plant pot to fall out onto the street and it injures a passer-by;
• your housekeeper or other worker suffers a severe injury while working at your home that prevents them from working for an extended period—and pursues you for loss of earnings.

An adequate home insurance policy can defend you against these types of unforeseen accidents and mishaps and provides civil liability cover in the event of a serious incident.

Third-party liability insurance for your home

A satisfactory home insurance policy will cover the home’s structure (if you own the home), and your personal goods (whether you own or rent).  The best policies also offer third-party liability coverages or offer third-party insurance as a stand-alone coverage option.

Typical situations that third-party home liability covers

Third-party liability coverage protects you when someone working in your home suffers an accident or inadvertently causes an accident that creates an injury or loss to themselves, or someone else.

For example, if:

• A worker comes to your home, regularly or ad-hoc, to undertake some work for you and, while doing that work, they injure themselves, the insurance coverage will reimburse you for medical and other related expenses you incur for the treatment of that person’s injuries.
• Someone working in your home causes an accident that has an impact on a third party, the insurance will cover medical and other losses suffered by that third party. For example, if a worker is painting an outside wall and the paint pot falls off the ladder onto someone’s parked car, the insurance would cover you for the car owner’s expense in getting that damage repaired.
• A worker at your home suffers a serious accident or injury that prevents them from working for a time, and they pursue you for lost earnings, the insurance would provide coverage up to the insured amount.
• A person working in your home suffers a serious accident and becomes permanently disabled, or dies, the insurance would cover any civil lawsuits that may be brought against you.
• When someone you know is visiting your home and suffers an accident or loss unintentionally caused by you (the policy holder) —or by your immediate family member— or caused by someone working at your home, the insurance would cover expenses for treatment and damages to the visitor.

In the case of civil liability suits, the insurance will also cover your legal expenses in relation to those, usually up to 50% of the insured amount—check the policy for details about this.

Typical limitations and exclusions

Domestic third-party liability insurance policies carry limitations and exclusions that you ought to be aware of; check the policy wording for details.  Significant situations that are almost always excluded include:

• The policies exclude injury to the named policy holder and their immediate family; so, if you or your partner or children suffer an accident on the property or are injured by a person working at the home, medical expenses and liability for those events are not covered.
• Any loss or damages to goods and persons where the home is in process of construction, assembly, or dismantling are explicitly excluded—so these policies will not cover you when you are building or extending a home, or having major remodeling done. The insurance does cover workers when they are attending your home to make repairs and/or undertake maintenance
• When you are host to guests like friends or extended family members, any injuries, or damages they might sustain while on or near your property will not be covered under the policy unless the accident or damage was caused the named policy holder or their immediate family member, or by someone working at the home.
• The insurance will never cover any damages, injuries, or losses arising from any events or situations where criminal or unlawful activity is involved; or if willful negligence is apparent; or for suicides.

How a third-party insurance policy protects you

You can arrange a policy online and the insurance will provide immediate home coverage for you in Mexico on acceptance of your application.

In the event of a claim, the insurance will reimburse you for medical and other related expenses you incur to provide immediate necessary treatments to the person or persons who were injured while working in your home, and it will provide legal help and civil liability coverage as per the policy if the person who was working in your home subsequently pursues you for civil damages.

Arrange a policy online and get immediate coverage

Our home insurance associate, MexPro, offers comprehensive home insurance coverages including third-party liability that can be purchased by itself or as an integral part of a complete home insurance coverage plan.  MexPro is a long-established US-licensed insurance broker that only works with A-rated underwriters.

• You can purchase home insurance whether you own the home, or are renting the home
• If you are renting, you can only insure your personal goods and/or third-party liability
• You can purchase third-party liability by itself as stand-alone coverage
• Choose how much coverage you would like: US$300,000 is a recommended minimum, and you can insure for up to US$2 million
• There is no deductible for third party liability claims, unless the claim is to cover an injury for a person working in your home, in which case a deductible of MXN$600 pesos (about US$30) per claim applies.
• The policy premium is quoted for and paid in US dollars, and any payouts are made in US dollars, or the US dollar equivalent amount in Mexican pesos when you ask for the payment to be wired to a bank account in Mexico.

Learn more about caring for your home in Mexico

Mexperience publishes extensive information to help you plan and care for your home life in Mexico through guides, articles and free eBooks:

• Free eBook: House maintenance and home security
• Articles about property insurance
• Articles about real estate in Mexico