Chances are it wasn't insured. Chances are it wasn't insured.

Few quake victims protected by insurance

8.6% of dwellings are insured against natural disasters

Few victims of last month’s earthquakes were protected against material losses because many people remain skeptical about the value of insurance despite being better informed and better prepared for natural disasters.


Since the devastating 1985 earthquake, successive governments have gone to great efforts to limit the loss of life in such events by raising public awareness and implementing various programs and initiatives.

The September 19 earthquake killed 360 people, a number that is much lower than the 1985 death toll, which soared into the thousands. While this year’s quake was less powerful than that of 1985, the much lower toll is partially attributed to people being better prepared to protect their own lives.

A year after the 1985 tragedy, the federal government launched the National Civil Protection System. That was followed by the introduction of stricter building codes designed to prevent buildings from collapsing during powerful seismic activity.

An earthquake alert system is now operational across much of the country while at schools, children learn the “don’t run, don’t shout, don’t push” rule by heart and get the opportunity to practice it in frequent earthquake drills.

Mexico City holds an annual drill at 11:00am on the anniversary of the 1985 earthquake, which this year was held just two hours before it was required to be put into practice for real.

But on the other hand, efforts to educate people about insurance and personal finance in the event of a natural disaster have been almost nonexistent.


Consequently, as in 1985, most people whose homes collapsed completely or sustained damage don’t have insurance and will instead have to depend on government support to recover their material losses.

One personal finance expert warns that it likely will not to be enough to cover the full extent of the damage.

The government is going to respond up to a certain level but its ability to do so is limited, said Ángel Méndez, a professor at La Salle University.

According to statistics from the Association of Mexican Insurance Companies (AMIS), only 8.6% of houses and apartments are insured against natural disasters including earthquakes. Yet the World Bank ranks Mexico as the world’s 23rd most susceptible country to catastrophic risk from natural disasters.

Even among medium and large-sized businesses, the coverage rate only climbs to 50%.

Méndez said that most people continue to see insurance purely as an expense and not as an investment to protect their assets. The idea of a national educational strategy on the subject was first considered just three years ago but Méndez thinks that it’s too little, too late.

Along with many other personal finance professionals, he says that financial education should start in childhood. But in the nation’s public schools there is no subject in the curriculum that covers the topic although the announcement of a new education model in March hinted at its inclusion.

According to Méndez, the problem is that the attitude of thinking “nothing is ever going to happen” that prevailed 32 years ago still holds sway today.

Source: Milenio (sp)

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  • Beau

    The cost of Homeowners’ insurance in Mexico is prohibitive, in addition, there are too so many exclusions and limitations- also, separate deductibles (one for each peril) based on a percentage of the Dwelling coverage amount. The insurance Industry in Mexico could be very successful- but they lack good underwriting.

    • Prohibitive? Depends on one’s finances. I own three homes in Mexico, and they all have quake coverage. While, I am better off than most Mexicans, I am not rich by any means. Quake coverage here is a no-brainer.

      • Beau

        Can you share carrier info/costs?- $1800.00 Dlls a year is ridiculous and that quote is from a very reputable carrier, Zurich with $300,000.00 Dlls dwelling coverage- also premiums in Mexico are paid 100% upfront. My home in Southern California is fully insured for $1400.00.00 a year, with Replacement Cost Value of $1,500.000.00 and $1000 deductible. EQ Authority endorsement coverage included in the cost with a 25% deductible.

        • Sure. Take the coverage for the house where I live. I have a replacement value of 1 million pesos, which is about $56,000 U.S. these days. I paid $100,000 U.S. to build it 14 years ago when the exchange rate was 10-1. My policy is with Imbursa, and the yearly premium (this year) is 2,643 pesos, about $148 U.S. with today’s exchange rate.

          If your Mexico place is worth $300,000, about 5,340,000 pesos, you must have a pretty nice spread, to put it mildly. I won’t even get into the issue of your very likely having overpaid spectacularly for various reasons. But for even such a pricey place, I would bet you’d get a lower premium from Imbursa.

          Keep in mind that the chances of your house crumbling in an earthquake are extremely low. Life is a gamble. If I thought there was any significant possibility of losing the house to a quake, I’ll up the coverage to 2 million pesos. I live in a relatively low-risk area, quake-wise. Relatively.

          I hope your place is not on the coast. I do not like hurricanes, which are another matter altogether. Hope this was helpful.

          • Beau

            Thank You! I’ll give them a call.

  • If there is one type of home insurance you need in most of Mexico it’s quake coverage. I have it, and so should you. Due to construction materials here, you’re far less likely to have your house burn down. Quake? Well, that’s another matter.