This section is intended to provide a general overview of the coverage options you can choose from. If you wish to see the complete details of the policy terms and conditions, please click here ACE HO Terms and Conditions.

We will first discuss loss to tangible property followed by liability losses and medical payments.

PROPERTY - Regardless of the type of home you have in Mexico, Property coverage is available in two basic forms, “Named Perils” and “All Risk”.

Named Peril Policy Form – This is the more limited and more economical policy form. Coverage is provided for perils that are specifically described, such as:

• Fire, lightning, explosion
• Smoke
• Riot, civil commotion, labor disputes, or political disturbance
• Freezing of a plumbing, heating, air conditioning, or automatic fire protective sprinkler system, household appliance
• Vandalism or malicious mischief
• Falling objects
• Accidental discharge or overflow of water or steam from within a storm drain, water, steam, or sewer pipe originating off the insured premises
• Accidental discharge or overflow of water or steam from a household plumbing, heating, or air conditioning, automatic fire protective sprinkler system
• Sudden and accidental tearing apart, cracking, burning, or bulging of a steam or hot water heating system, air conditioning, or automatic fire protective sprinkler system
• Sudden and accidental damage from artificially generated electrical current (but does not include loss to a tube, transistor, or similar electronic component)

Note: Specific exclusions may apply to certain circumstances that are spelled out in the policy

“All Risk” Policy Form – This is the broadest policy form offered. Coverage is provided for all causes of loss that are not specifically excluded.

Note: “All Risk” is a term widely used worldwide in property insurance policies. It is somewhat of a misnomer, however. In 40+ years in the insurance business I have never seen a policy that literally covers all risk, or, any and all causes of loss.

Following is a partial list of causes of loss that are specifically excluded:

• Earthquake and Volcanic Eruption *
  
• Weather related causes of loss, such as hurricane, tornado and windstorm *
  
• Hailstorm *
• Flood *
• Tidal wave  
  
• Water damage
• Ordinance or Law
• Power failure
• Neglect
• War
• Nuclear hazard
• Intentional loss
• Governmental action

* NOTE: While this coverage is excluded, it may be purchased separately. Please see Catastrophe Perils.

Deductibles: You may chose from a wide range of property deductibles and it is worth mentioning that the larger the deductible, the lower the premium will be.

Co-Payment:  This is a coverage feature unique to Mexico property policies (compared to policies in the U.S and Canada), but it only applies if you purchase coverage for the so called “catastrophe” perils such as Earthquake, Hurricane, Volcanic eruption. Please see the separate section for a description of the catastrophe perils.

BASIS OF SETTLEMENT OF A PROPERTY LOSS

Property losses are settled according to one of two methods, with the choice made by the insured at the time the policy is purchased.

Actual Cash Value – This method of loss settlement starts with the cost to reconstruct the insured building or cost to buy personal property new, then depreciates it based upon age and use. Purchasing Actual Cash Value coverage reduces the amount of premium that is charged, but it also significantly reduces the amount of insurance recovery received in event of loss. Here is an easy to understand example taken from auto insurance:

Cost of a brand new 46” flat screen TV in 2009: $1,000

Actual cash value of that flat screen TV in 2011: $550

If the TV is destroyed in a fire in 2011, and if insured on an Actual Cash Value basis, the insurance company will only pay the depreciated value of $550.

Replacement Cost – This method of claim settlement simply pays new for old.

Assuming property is insured for at least 80% of the cost to completely replace it at the time of loss, if the roof is blown off of a 15 year old house today, the insurance company will pay full cost to replace the roof at today’s cost, without deduction for the depreciation that has occurred to the 15 year old roof. The loss would be subject to the deductible and co-payment.

INSURANCE-TO-VALUE

Insurance- to-value is a feature found in property insurance policies worldwide.

Most property policies in Mexico apply a proportionate penalty, i.e., subtract from the settlement, if the property is not insured to 100% of the property’s replacement cost at the time of loss.

Our policy is like U.S. property policies, which is much better than other property policies in Mexico. This policy pays for the full cost to repair partial loss if the limit of coverage is equal to at least 80% of the property replacement cost at the time of loss. If the limit of coverage is less than 80% of the cost to replace the property at time of loss, a penalty is applied to the settlement amount that is in proportion to the amount of insurance that is under the 80% limit.

PALAPA Construction - We all love that quaint palm frond covered beach type construction, right? Well, not quite. Because Palapa construction is so vulnerable to damage, insurance companies don’t cover it!

LIABILITY AND MEDICAL PAYMENTS COVERAGE

Personal Liability – if a claim is made or a suit is brought in Mexico against you for damages because of bodily injury to others or damage to property of others because of your negligence in a covered occurrence the policy will:

• Pay up to the limit of liability for the damages for which the insured is legally liable, in accordance with the Mexican judicial system, including pre-judgment interest awarded, and

• Provide defense by counsel of the insurance company’s choice, even if the suit is groundless, false, or fraudulent. The company may investigate and settle any claim or suit that it decides to be appropriate.

Medical Payments – the company will pay the cost of necessary medical expenses that are incurred or medically ascertained within two years from the date of an accident that causes bodily injury. Medical expenses means reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic device, and funeral expense. 

Coverage does not apply to the insured or regular residents of the household, but it does apply to resident/domestic employees.

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

 

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