Mexican insurance is not mandatory for you to travel into the immediate cities and towns along the U.S./Mexican border, but in the event that you are involved in an automobile accident, a Mexican Insurance policy greatly reduces the chances of being detained or put in jail in Mexico, while also limiting the financial burden you might face after an accident. There are basically only two ways to solve this: pay all damages on the spot in cash (which we do not suggest) or you can prove your financial liability by presenting a Mexican Insurance policy; Please note, however, that Mexican insurance is not “diplomatic immunity”. An accident in Mexico may still be determined to be a felony. U.S. or any other non-Mexican insurance does not cover your liability for potential accidents, nor does it fulfill the basic requirement of insurance or proof of financial responsibility.