Insurance, Real Estate

The Hidden Liabilities in Your Mexican Home

Often overlooked, third party liabilities related to your property can be mitigated with adequate insurance cover

Tree Fallen on a House

Property ownership in Mexico, as elsewhere, carries a number of responsibilities. For example, you have to actively maintain the house and grounds to protect your investment, fulfill tax obligations and, if the property is part of a gated community or condominium, pay home owner association (HOA) fees.

Although home insurance is not obligatory by law in Mexico (although if your property is mortgaged, the lender may insist the property is covered), it’s wise 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.

Consider the trees in your garden. Trees falling in a 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 relative calm 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 if they are old.

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.

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.  A good home insurance policy will also cover your liabilities to domestic employees working on your property.

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.

Our guide to Property Insurance in Mexico will help you to understand the insurance market here, and also connect you to online quotes from our home insurance partners, MexPro, who offer comprehensive coverages at competitive rates, with policies issued in English by a licensed U.S. broker, and fully-underwritten by solid insurers in Mexico.