After a recent category 2 hurricane rolled through Zihuatanejo I thought it may be a good idea to give some basics on setting up your home insurance in México. We think it’s something you should consider if you have property here. But it seems like a lot of people take their chances that nothing catastrophic will happen to their home. Or vehicle. And therefore they don’t carry insurance on either. Unfortunately when a large proportion of the population is living at a poverty level things like insurance are not necessities.

My general feeling is that if something major happened here, like an earthquake, that damaged our home beyond repair, then it would be pointless to rebuild, or attempt to rebuild for many years. Most people would walk away from their homes. Zihua would come back, but perhaps it would take 10 years or longer before the infrastructure was there to support an expat community. If there is no water, no electricity, no airport, no way for us to work, then unfortunately we would walk away too.

I’m sure it will be fine, though.

I look at insurance as not necessarily a way to make us completely whole again if something happened, but limit our potential losses. Home Insurance is confusing, and I feel like it’s set up that way on purpose. So, if an asteroid lands on Zihua who knows how easy it will be to get paid out on our policies? We hope that we would be able to collect on our insurance policy, but we also are just like everyone else in mostly just praying that we avoid any major events.

Many of the insurers seem to go through the banks. The condo complex is insured through Atlas, and they are a straight insurance company. However, they don’t have an office in the area and I really need to be able to talk to someone in person. For the house we went with Inbursa, which is a bank with an office in Centro. I don’t know if they are the best or the cheapest, but they were recommended by one other person, which was good enough for us at this point.

You can set the currency of your policy in dollars or pesos, and you definitely want the policy to be in pesos. The rule is that almost always the best prices will be in the local currency. The condo complex policy is in dollars, and each year they convert the dollar to peso and we pay in pesos. Then if there were to be a payout there would be one or two more transfers dollar to peso and then back to dollar if we sent the money to the US. Each time you convert you come out a little worse. So we are paying roughly 5% more per year so we can see the numbers in US currency. It makes zero sense. For the past couple years the dollar has bought you about 20 pesos, give or take a peso. But in March, 2020 the dollar bought 25 pesos, and our policy renews the first of April, so it ended up costing us another 20% to renew the policy.

Plus, the only time you would even consider needing the money in dollars is if you were planning on taking an insurance payout and going back to the US. If a tree falls through your living room you will want the payout in pesos since the work will be done in pesos. In addition, a condo complex has owners from other countries. Sorry Mexicans and Canadians, we’re going with dollars!

The policy coverage is probably otherwise similar to the States. You can get coverage for earthquakes, storms, and fire, debris removal, theft of merchandise, civil liability, etc. The deductibles are more confusing than the policy. Our deductibles range from zero to 20% of the insured value. For example, if our windows are blown out and it’s 100,000 pesos to repair then our deductible is 20,000 pesos, roughly $1,000.

Once we were ready to move forward we had to send photos of the property, the exact address and a copy of the escritura (deed), as well as our ID’s and tax document.

A better than average policy will be about $800 to $1,200 per year, and this should cover $200,000 to $300,000 in home value. We had annual quotes on the house for as little as $500 per year. For the house we paid for the policy on our credit card, which makes everything easier, and we get those credit card points!