Us Auto Insurance: Understanding Puerto Rico Coverage

If you're planning a trip to Puerto Rico and intend to drive, it's important to know whether your US auto insurance covers you there. The answer may depend on your specific insurance policy and the state where your insurance is from. While some US auto insurance policies may provide coverage for Puerto Rico, it is not a given, and it is always best to check with your insurance provider directly.

Puerto Rico has its own set of auto insurance requirements, including compulsory liability insurance (Seguro Compulsorio), which is mandatory for all private cars operating on the island. This insurance can be purchased separately or as part of your annual registration fee when obtaining your vehicle tag. It covers damages caused to other vehicles up to a certain limit, which is typically around $4,000, and costs $99 per year for a private passenger vehicle.

When travelling to Puerto Rico, it is essential to review your insurance policy carefully and understand the extent of your coverage. Some US insurance companies may offer secondary coverage for rental cars, while others may not provide any coverage for travel to the island. It is always recommended to double-check with your insurance provider to ensure you have the necessary coverage and explore alternative options if needed.

US auto insurance may not cover Puerto Rico

Puerto Rico has its own compulsory insurance requirements, and you will need to purchase liability insurance coverage of at least $3,000 for your vehicle on the island. This costs $99 per year for a private passenger vehicle, or $148 per year for a commercial vehicle. This compulsory insurance covers damages caused to other vehicles up to $4,000.

If you are renting a car in Puerto Rico, it is worth checking with your insurance company whether you are covered, and what your policy does and does not cover. You may need to purchase additional insurance from the rental company.

If you are moving to Puerto Rico, you will need to purchase a new insurance policy for your vehicle on the island.

Compulsory Liability Insurance

The compulsory insurance used to be provided only by the ASC (Asociacion de Suscripcion Conjunta), but now consumers can choose between a variety of providers, including PointGuard and MAPFRE. MAPFRE, for example, offers "expanded compulsory insurance", which includes modest upsells like increasing liability coverage to $20,000.

If you already have private insurance, you can ask your insurance agent for a "voucher" to certify that you are exempt from purchasing compulsory insurance. If you were unable to get the voucher in time and had to pay for compulsory insurance, you can still contact your insurance agent to request a retroactive refund.

Private vs public insurance

The debate over whether public or private insurance is more economically efficient has been ongoing, especially since the Affordable Care Act (Obamacare) was instituted in 2010. This act mandated that employers with over 50 full-time employees must provide affordable health coverage to their employees, or else face a tax penalty.

Private insurance is provided by private companies and is often linked to an employer or other organisation. It can also be purchased by individuals directly from an insurance company. The majority of Americans currently receive health coverage through private insurance plans.

Public insurance, on the other hand, is provided by the government for low-income individuals or families, the elderly, and other individuals that qualify for special subsidies. The primary public health programs in the US are Medicare, Medicaid, and CHIP.

Private Insurance

Private health insurance offers more flexibility than public insurance, giving policyholders more options for which doctor or medical facility to visit. There are also more plans and providers to choose from. However, private insurance comes with a heftier price tag and requires the payment of monthly or yearly premiums.

Private insurance offers:

• Choice of doctors and hospitals
• Comprehensive coverage options
• Faster access to healthcare services
• Access to advanced treatments
• Reduced wait times
• Coverage for additional services
• Personalised customer support
• Choice of plan features
• Portability
• Wellness incentives

However, there are also some cons to private insurance:

• Inequalities in treatments
• Higher costs
• Limited coverage
• Out-of-pocket costs

Public Insurance

Public health insurance is more affordable than private insurance, with lower administrative costs and no co-pays or deductibles. However, it is also less flexible, as policyholders are given a limited selection of medical service providers. Many medical establishments still refuse to accept government-sponsored health insurance plans.

Public insurance offers:

• Affordability
• Ability to combine multiple insurance plans
• Help with out-of-pocket costs

However, there are also some cons to public insurance:

• Strict eligibility requirements
• Limited network of providers
• Extensive paperwork
• Lower payout per treatment

Choosing Between Public and Private Insurance

When choosing between public and private insurance, there are several factors to consider:

• Income: Your annual salary determines eligibility for public insurance and the amount of premium you can afford for private insurance.
• Age and state of health: Public insurance policies have specific age and health specifications, while young and healthy individuals tend to pay lower premiums for private insurance.
• Number of people insured: Choose a policy that will cover your family as a whole.
• Pre-existing medical conditions: Both private and public insurance plans have different provisions for pre-existing conditions.

Full coverage insurance

Direct Damages and Losses

Bodily Injuries and Third-Party Property Damage

In addition to protecting your vehicle, full coverage insurance also provides liability coverage for bodily injuries and damage caused to third-party property. This means that if you are involved in an accident where someone else is injured or their property is damaged, your insurance policy will help cover the associated medical or repair costs. This aspect of full coverage insurance is crucial in managing your legal and financial responsibilities in the event of an accident.

Optional Coverages

Requirements and Restrictions

When considering full coverage insurance in Puerto Rico, it is important to review the requirements and restrictions set by the insurance provider. For example, MAPFRE, a prominent insurance company in Puerto Rico, has certain requirements that customers should evaluate before purchasing their full coverage policy. These requirements include providing specific information and documents in the event of a claim, such as the policy number, policyholder name, driver's license, and vehicle license. Additionally, there may be restrictions on coverage for vehicles used for public transport or rental purposes, as well as weight limits for vehicles to qualify for certain coverages.

Price Calculation

The price of full coverage insurance in Puerto Rico will depend on various factors, including the value of your vehicle, your age, and the amount of coverage you choose to purchase. Insurance providers in Puerto Rico typically offer tools or calculators on their websites to help you estimate the cost of full coverage insurance based on your specific circumstances. By using these tools, you can get a better understanding of the financial commitment involved in obtaining full coverage insurance.

In conclusion, full coverage insurance in Puerto Rico offers comprehensive protection for your vehicle, including liability coverage for bodily injuries and third-party property damage. It is important to carefully review the specifics of the insurance policy, including any requirements, restrictions, and optional coverages, to ensure that it meets your unique needs and provides the level of protection you desire while driving in Puerto Rico.

Double interest policies

A double interest policy is a type of auto insurance that is usually sold at the dealership when a car is purchased. This policy is so named because it protects the interests of both the bank or auto financer, and the owner of the vehicle.

However, it is a bit of a misnomer, as it primarily protects the bank. In the event of a total loss, the policy will pay off the loan balance, but it will only cover the depreciated value or actual cash value (ACV) of the vehicle at the time of the accident. This means that unless a sizeable down payment was made on the vehicle, the loan balance will likely be higher than the ACV, leaving the owner responsible for the remainder.

A double interest policy does not include liability coverage, and many buyers end up driving with only the compulsory liability insurance, leaving them underinsured. As such, it is generally recommended to avoid choosing a double interest policy.

It is also important to note that having two separate auto insurance policies on the same vehicle is generally discouraged, as it can lead to complications and increased costs. Filing the same claim with two different insurance companies is considered insurance fraud.

Frequently asked questions