Changes in Liability Law.
AN AT-FAULT ACCIDENT IN MEXICO - CHANGES IN LIABILITY LAW
RECOMMENDED LIABILITY LIMITS FOR MEXICAN AUTO INSURANCE:
$300,000 CSL WITH
"EXCESS LIABILITY IN CASE OF DEATH OF THIRD PARTY" OF $150,000 **
On November 30th, 2012, the Mexican government announced the reforms to the Labor Law in Mexico. This law is what is used to calculate the amounts paid as an indemnity in the event of the death of a third party in an accident. Changes are reflected in article 502 of the Federal Labor Law, and entered into effect on December 1, 2012. Prior to this date, the indemnities were based on "Seven Hundred and Thirty (730) days of The General Minimum Wage or the highest Professional Minimum Wage".
Changes to Labor law Article 502 states:
In case of death, the compensation due to persons shall be the amount equal to "Five thousand (5,000) days of The General Minimum Wage."
This amount can then be multiplied by two, three and up to four times, depending on the state where the accident occurred. Every State in Mexico has its own Civil and Criminal Law, and therefore, each state decides on the amount of indemnity based on the Federal Law. Depending on the geographic area where an accident occurs, the potential liability if you are at-fault accident could be $300,000 USD per person that dies in the accident.
"EXCESS LIABILITY IN CASE OF DEATH OF THIRD PARTY"
** Excess liability is included in all HDI Seguros policies sold by Arriba! Mexican Insurance in the amount of $150,000; this is in addition to the standard liability coverage you purchase. Excess liability will be used to cover the required indemnification in the event of the death of a third party. Occupants of the insured vehicle are excluded from this coverage.
- HDI Excess Liability General Conditions in English.pdf
- HDI Excess Liability General Conditions in Spanish.pdf
We understand this is a drastic change in the recommended liability limits and increase in premium. If you are watching your budget, we recommend that you carry no less than $200,000 Combined Single Limit (CSL) Liability with the $150,000 Excess Liability in case of death of a third party.
Below are some examples of possible indemnities per State, as well as on Federal highways and Federal areas, based on minimum wages. Please be advised this table is for illustration only to assist in explaining the changes mentioned above. Indemnities are determined by a judge on a case by case basis.
| Federal Criminal | Current Labor Law |
|||
Number of times minimum wage |
*Approximate amount of indemnity |
|||
Peso |
USD |
|||
| Federal Highways and Federal Areas | 4 | $3,926,762.40 | $302,058.65 | |
| Local Criminal | Current Labor Law |
|||
States |
Number of times minimum wage |
*Approximate amount of indemnity |
||
Peso |
USD |
|||
| AGUASCALIENTES | 2 | $621,165.60 | $47,781.97 | |
| BAJA CALIFORNIA | 1 | $327,685.60 | $25,206.58 | |
| BAJA CALIFORNIA SUR | 2 | $1,858,133.20 | $142,933.32 | |
| CAMPECHE | 4 | $1,242,331.20 | $95,563.94 | |
| CHIAPAS | 1 | $310,582.80 | $23,890.98 | |
| CHIHUAHUA | 4 | $1,310,742.40 | $100,826.34 | |
| COAHUILA | 4 | $3,716,266.40 | $285,866.65 | |
| COLIMA | 1 | $310,582.80 | $23,890.98 | |
| DISTRITO FEDERAL | 2 | $655,371.20 | $50,413.17 | |
| DURANGO | 1 | $310,582.80 | $23,890.98 | |
| GUANAJUATO | 4 | $1,242,331.20 | $95,563.94 | |
| GUERRERO | 4 | $1,261,559.20 | $97,043.02 | |
| HIDALGO | 3 | $931,748.40 | $71,672.95 | |
| JALISCO | 1 | $327,685.60 | $25,206.58 | |
| MEXICO | 3 | $983,056.80 | $75,619.75 | |
| MICHOACAN | 2 | $75,619.75 | $47,781.97 | |
| MORELOS (Income of the victim by the number of years of remaining life) | 1 | $310,582.80 | $23,890.98 | |
| NAYARIT | 3 | $931,748.40 | $71,672.95 | |
| NUEVO LEON | 3 | $983,056.80 | $75,619.75 | |
| OAXACA | 3 | $931,748.40 | $71,672.95 | |
| PUEBLA | 4 | $1,242,331.20 | $95,563.94 | |
| QUERETARO | 1 | $310,582.80 | $23,890.98 | |
| QUINTANA ROO | 1 | $310,582.80 | $23,890.98 | |
| SAN LUIS POTOSI | 4 | $1,242,331.20 | $95,563.94 | |
| SINALOA | 1 | $310,582.80 | $23,890.98 | |
| SONORA (Remaining productive life of the deceased) | 1 | $327,685.60 | $25,206.58 | |
| TABASCO | 2 | $621,165.60 | $47,781.97 | |
| TAMAULIPAS | 4 | $1,310,742.40 | $100,826.34 | |
| TLAXCALA | 2 | $621,165.60 | $47,781.97 | |
| VERACRUZ | 1 | $327,685.60 | $25,206.58 | |
| YUCATAN | 4 | $3,716,266.40 | $285,866.65 | |
| ZACATECAS | 2 | $621,165.60 | $47,781.97 | |
Wages are considered by the Federal Labor Law to indemnify the death of third parties, but in the case where the deceased had a higher salary and this can be demonstrated to the court (judge), then the indemnity could be based on the highest salary.
The total amount of compensation for death of a third party, is defined through a judgment issued by a criminal court. The amounts shown in this table are approximate amounts, considering what is stated on the Federal Labor Law.
In the case of a civil lawsuit, the amount of compensation can exceed twice stipulated in the chart above, these amounts will be determined through a judgment of a civil court, and the amounts can be doubled or exceed the amounts specified in the information provided.