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What is the Point of Car Insurance in CR?

I have heard a couple of  stories over the past couple of weeks that enticed me to write this article.  With the increase of Marchamo I wanted to know what this mandatory insurance actually covered or if it was just another tax for the government to spend as they want.  The more I researched and spoke to people the more disgusted I became.

For all of you car owners in Costa Rica or people that are thinking of bringing a car to Costa Rica, you will be required to purchase the mandatory liability insurance called marchamo for your car in order to make your car “street legal”.  But what does this cover you may ask? Not much,  it is too low to be considered effective. It covers injury and death of people (pedestrians and occupants of the vehicle), victims of a traffic accident, whether or not the driver’s subjective responsibility. The amount of up to $12,000 per person killed or injured, which is not much. That is it.  And this is the only insurance that over 90% of the vehicles on the road carry.

If you have driven in Costa Rica you will notice that defensive driving is not a characteristic of people on the roads.  Most accidents in Costa Rica do not involve personal injury or death, so you ask what if my car is damaged in an accident and it is not my fault? How is it repaired? Unfortunately, usually you are going to end up paying for it yourself.

Here is a story I heard last week. A friend of mine was driving in Costa Rica with his two kids in the car.  The truck in front of him was a novice at driving a stick shift.  He missed a gear at the stop light and due to the fact he was on a hill the car rolled back into my friends car crushing the hood.  When the police arrived the three Costa Ricans told the police that he had run into the truck and because there was no one that could confirm his story he had to pay for both the damage to his car and the truck.

Another accident where again the person not at fault then became the accused was a friend of mine driving in Guanacaste in his Jeep.  He was hit on the side of his Jeep by a motorcycle going at high speeds and spun his Jeep 180 degrees.  When the police showed up they documented everything and because the Jeep was turned 180 degrees the story did not “add up.” He is now being sued for damage to both the motorcycle and the rider.

If you are not careful in Costa Rica especially if you are a foreigner or do not speak English, you can be taken advantage of in Costa Rica.  There are a few pointers I have for drivers in Costa Rica.

1.  Supplementary insurance is highly recommended. Collision, fire, theft, personal liability and property damage coverage can be purchased from INS. When receiving quotations on car insurance the normal term is six months. Once your car is insured anyone with a valid license is permitted to drive it. For the year 2003 approximate annual full coverage would be $1000 for a vehicle with a value of $10,000, $2,000 for a value of $20,000.

2. If you are in an accident always wait for the police to do a report. If you do not speak English find someone that does so you understand what is being said.  Make sure the real story is told to these officers for their report as it is hard to get that initial report rebuked.

3. Make sure you have witnesses. If you can get people standing by to wait for the cops (transito) and be a witness for your side.  Again make sure you have Spanish speakers and if possible Costa Ricans.

4. Have Your Mechanic Estimate Damages on Their Vehicle. Many times people will have their friends, family, or people they know to over estimate the cost of repairing their vehicle to get more money out of you.

This is just a little advice so you are not taken to the cleaners or taken advantage of in Costa Rica when it comes to car accidents and dealing with the inability of the people on the road to drive well.  There is no real driving test in Costa Rica,  and most are very aggressive drivers.

So Pura Vida! Drive Safe!


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