Costa Rica Insurance

Insurance in Costa Rica – Types, Coverages

The Instituto Nacional de Seguros, or INS, is a state-run insurance company
that controls all insurance in Costa Rica. They will handle all of your insurance
needs. INS has a new English section on their website at

All insurance is less expensive in Costa Rica than in the United States.
Auto, fire and theft insurance will cost less than half the U.S. premiums.
All vehicles in Costa Rica have Obligatory Insurance or Seguro Obligatorio,
which comes automatically with your vehicle registration. It is renewed every
December when you pay your car’s road tax (marchamo). This insurance
gives you a small amount of personal liability coverage, which is the type
that protects you if you hurt, kill or maim another person when you are
driving your car.

About 65 percent of cars have only the obligatory insurance which is
not really complete coverage. If you want real coverage you must buy a
supplementary policy. For an additional cost, supplemental insurance policies
provide broader coverage than the basic compulsory policy. Your car’s value
determines the price of your premium. These supplemental policies are paid
in full every six months. They cannot be paid in monthly premiums as in the
United States. Also, as in the States, premiums are increased when you have
an accident. However, these increases are not as big as in the United States.
It doesn’t matter if an accident was your fault or not.

When considering coverage, remember the general rule of thumb:
Insure against everything you would find yourself hard-pressed to overcome
financially. The essential coverages are A and C; if you don’t get those, INS
won’t sell you any of the others. For coverage F or H, you must also have D.
(By the way, coverages B and G have never existed). Rates are determined
by the vehicle’s and applicant’s characteristics.

Here is a breakdown of the basic automobile coverages in Costa Rica:
(A) PERSONAL LIABILITY — Covers liability established by the courts
as a result of death or injury caused by an accident for which the driver
of your vehicle was guilty. The benefits are paid once the Obligatory
Insurance is used up and does not cover injury or death of family
members or employees of the policyholder or driver.
(C) P ROPERTY DAMAGE — Covers damage to property (car, house,
etc.) belonging to other people if the accident was the fault of the driver
of your vehicle. Excludes items being transported by your vehicle.
(D) COLLISION — In case of collision with another vehicle, persons,
or property belonging to someone else, this policy pays for damage
sustained by your vehicle: (1) if the accident was not the fault of your
driver, or (2) if the accident was not the fault of your driver but the
other vehicle has no insurance and the owner cannot pay.
202 The New Golden Door to Retirement and Living in Costa Rica
(E) FIRE — Covers damage to your vehicle caused by fire due to either
internal factors such as short circuit, or to external factors such as
lightning, or if the place where the vehicle is parked burns.
(F) THEFT — Covers total theft of the vehicle or loss derived from the
total theft. If it is not recovered, policy pays for damage and/or missing
parts. If not recovered within a month, the insured amount is paid or
the vehicle is replaced.
(H) ADDITIONAL RISKS — Covers damage resulting from overturning,
running off the road, vandalism, floods, hurricanes, quakes, explosions,
collisions with birds, falling objects, accidents within parking lots or
private property, riots, etc.

• Insured values — Cars should be insured at their market value in Costa
Rica, and it is up to the policy applicant to determine it. To determine
values of vehicles, it is sometimes best to use the newspaper classified ads.
Only you can change the value on your policy; INS will not automatically
reduce the insured values on vehicles as they depreciate.
• Renewals — Auto insurance is normally for six months, after which you
have a grace period of 10 working days to pay for renewal. After that,
you have to apply for new insurance or reinstatement.
• Coverage outside of Costa Rica — For cars with Costa Rican registration,
coverage extends to all of Central America and Panama.
• Deductibles — All coverages except “A” have standard deductibles.
“A” has no deductible. Double deductible if the driver is under 22, in
cases of vandalism, birds or accidents on private property.
• Alcohol — Policies will not pay for accidents to vehicles being driven by
people under the influence of alcohol or drugs, even if the condition did
not cause the accident. An alcohol count of 50 mg or more in 100 cc of
blood will invalidate insurance coverage, except for liability coverages A
and C.
• Roadside Assistance — This comes free for vehicles less than 15 years
old that have coverage “D”. Call 800-800-7000(toll-free) if you have a
flat tire, dead battery, are out of gas, or need a tow truck.
• Special Notes for Tourists— When you bring a car into Costa Rica,
you will be given a permit to drive the car into the country. The permit
is usually for three months, renewable once. For issuance of the permit
you must state who is going to drive the car— they allow the owner and
one other person, usually one’s spouse. If you don’t have Costa Rican
plates on your automobile, you can’t cover it against collision or theft.
All other coverages are available under these circumstances. However, in
most cases, after 180 days you can get Costa Rican plates when you pay
the corresponding taxes on your vehicle.

(I) HOMEOWNERS INSURANCE — A homeowners insurance policy
is called Hogar Comprensivo in Spanish. It protects your home against
fire and natural disaster. The home fire policy has four sub-coverages:
“A” is for fire and lightning; “B” covers damage caused by strikes,
vandalism, hurricane, cyclone, explosion, smoke, falling objects and
vehicles; “C” pays for damage caused by floods and landslides; “D”
covers natural disasters: earthquakes, tremors, volcanoes, etc. You can
take coverage A by itself, A+B, A+CD or complete coverage A+B+CD.
Rates are based on a percentage of the value of the building and include
a 13 percent tax and an inflationary factor whereby there is a small
yearly increase. Depreciation is also factored in at a rate of one to two
percent yearly.

If you have one of these policies you have to insure your house’s contents
as well as the house itself. You have to submit a complete list of household
effects with the value of each item, and the respective brand name, model
and serial number. If you want to insure the contents of your home, you
must put a value on the objects based on depreciated value. The same rate
for the house applies to the contents. You should have your house appraised
so you can carry enough coverage.

Some people doubt whether INS would be able to settle claims from a
major earthquake or hurricane. INS is by far the largest insurance company
in Central America. In fact, INS is one of the largest insurance companies
in Latin America, is financially solid and most importantly, it re-insures
worldwide a large percentage of the risk.

I have already mentioned the affordability of medical insurance in Costa
Rica in the section titled “Medical Care.” Because not everyone’s insurance
needs are the same and because laws and coverages work differently in Costa
Rica, we suggest you consult your attorney or the English-speaking insurance
agent, Dave Garrett, we have listed below.
Latin American Coverage S.A.
They work closely with the Association of Residents of Costa Rica and have
many retirees and other foreigners as clients.
Franklin Martinez
Tel: 2258-7041 / Cel: 8318-2255
Web site:
Garrett y Asociados
SJO 450
Miami, FL 33102-5216
Tel: 2233-2455 / Fax: 2222-0007

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