MotorMexico.com Homeowners Catastrophe and Perils in Mexico

Events that affect a wide geographic area and cause wide spread damage are called “catastrophe” perils in insurance terminology. You have the option to include coverage for natural catastrophes in your homeowner’s policy. These perils are grouped into types of coverage:

Hydro-meteorological (“weather related”) – hurricane, flood, tidal wave, hailstorm, tornado

Seismic – include earthquake and volcanic eruption

We are firm believers that a picture is worth 1,000 words. That said, why waste words when a few photos of hurricane and earthquake damage in Mexico will suffice?

Hurricane Damage and Risk in Mexico

Hurricane Wilma, Cozumel

Hurricane Wilma, Category 4, Cozumel, October 2005 (Courtesy of Cozumel tours website, This is Cozumel.)

Hurricane Jamena

Hurricane Jimena, Category 4, approaching Cabo San Lucas, September 2009
Note the image of the southern Baja peninsula
in the top center of the photo

Hurricane Karl

Hurricane Karl, Category 3, September 2010
(Photo by Gerry Broome, AP)

Hurricane Wilma

Hurricane Wilma off the Coast of Yucatan Peninsula, October 2005 (courtesy NOAA)

Earthquake Damage and Risk in Mexico

Earthquake Mexicali

Mexicali, Richter scale 5.1, April 2010
(Photo by Beto Peralta)

Earthquake Mexico City

Mexico City, Richter scale 8.1, September 1985
(image from NOAA Database)

"I lived in Mexico City in 1990 and 1991 and saw that the damage to high rise buildings downtown still had not been cleared away. Even though some structures were clearly unsafe by any measure, the city’s homeless had started to occupy them.
Following are a couple of maps depicting Mexico earthquakes that may help you better understand the potential for earthquake damage. We provide these maps to help you evaluate the earthquake risk in the geographic area where you property is located." - Alan Kohl

The map below is a seismic hazard map depicting the degree of EQ hazard for different geographic regions of Mexico, measuring the 10% probability of an EQ within any 50 year period. You will note that Mexico’s western region is rated the most serious EQ risk, followed by the central region from north of Mexico City to the border with Guatemala and Belize.
Learn the story behind this historic map.

Peak Ground Acceleration Table - Mexico

Peak Ground Acceleration which identifies areas of higher probability for Earthquakes
(Image From NOAA Website)

Earthquake Magnitude 7 and Greater Since 1900 map

Earthquakes Magnitude 7 and Greater since 1900
(image from University of Texas)

Conclusions about the need for insurance for catastrophe perils in Mexico

Most people agree that insurance against catastrophe perils like hurricane and accompanying tidal wave and flooding, and earthquake, is the most important coverage to have in Mexico. We agree. Going without just doesn’t seem a prudent option.

CO-PAYMENT participation in case of a “catastrophe” loss

Now that you understand the importance of insurance for catastrophe causes of loss we want to mention a unique feature about catastrophe coverage that is not a part of property insurance policies in the U.S. and Canada: Co-payment or, in Spanish, “coaseguro”.

You are probably familiar with the term “co-payment” from your health insurance. This is a concept in which the insured shares in part of the loss. The policyholder’s co-payment participation is expressed as a percentage of the loss after consideration of the deductible. For catastrophe perils in Mexico the co-payment percentage depends on the geographic zone location of your property; the greater the earthquake or hurricane risk, the higher the co-payment participation.

Here is an example of catastrophe loss repairs, settled on a replacement cost basis, assuming the dwelling is insured at least to 80% of its replacement cost at the time of loss:

Cost to repair building damage:	$100,000
Deductible:	$1,000
Amount of loss after deductible:	$99,000
Co-payment percentage of loss:	5%
Insured’s co-payment participation:	$4,950	(5% x $99,000)
Insurance company payment:	$94,050	($99,000 - $4,950)

Palapa Construction

We all love that quaint palm frond covered beach type construction, right? Well, not quite.

In fact, all our policies exclude all coverage for Palapa construction . . . it just has no resistance to wind and fire, often resulting in a total loss.

To get your quote and issue your policy online, click here: Homeowners and Condos