Policy Coverage In Mexico

Irving insurance attorneys will have many clients who travel to Mexico. The question then concerns auto coverage when traveling in Mexico. The first thing to do is to get with their agent and to read the policy. In order to understand how courts look at this issue, reading a 1999, El Paso Court of Appeals case may be helpful. The case is styled, Ruiz v. Geico. Here is some of the relevant information.
This is a summary judgement case wherein judgement was granted in favor of Geico.
Hermilinda Quesada de Ruiz was driving her 1996 Nissan Maxima in Ciudad Juarez, Chihuahua, Mexico, when she was involved in an automobile accident. The accident occurred within ten miles of the United States/Mexico border. As a result of the accident, Mrs. Ruiz incurred medical expenses arising from her injuries. The Ruizes contacted GEICO to advise of the accident and inquire as to coverage. GEICO responded that in accordance with the Ruizes’ policy, there was no coverage for the accident because it occurred in Mexico. The Ruizes received a letter from GEICO denying any and all liability. The Ruizes filed suit claiming that GEICO committed fraud because it negligently failed to disclose any limits of their coverage as it pertained to location. GEICO filed its motion for summary judgment which was granted by the trial court.
The insurance policy purchased by the Ruizes contains the following provision regarding the policy period and territory:
POLICY PERIOD AND TERRITORY A. This policy applies only to accidents and losses which occur:
1. During the policy period as shown in the Declarations; and 2. Within the policy territory.
B. The policy territory is:
1. The United States of America, its territories or possessions;
2. Puerto Rico; or 3. Canada.
This policy also applies to loss to, or accidents involving, your covered auto while being transported between their ports.
Initially, the Ruizes claim that GEICO committed fraud and negligent misrepresentation by failing to disclose the limits of the policy. The Ruizes maintain that “its inconceivable that GEICO can market, promote, sell and collect premiums from drivers in the United States/Mexico border area and then, upon the occurrence of an accident on the Mexican side of the border, inform them that they are not covered in Mexico.”
An insurance policy is a contract entered into between the parties whereby each party becomes bound by the terms of the agreement. In another case, the insured was involved in an automobile accident in Jamaica and filed suit to recover insurance benefits from his insurance company. The Court granted summary judgment to the insurance company because the policy only covered accidents occurring in the United States and its territories and possessions, Puerto Rico and Canada. The Ruizes argue the other case is distinguishable because the accident in the other case occurred in Jamaica and does not address the issue of whether or not individuals are entitled to coverage when they operate their vehicles in an area that could easily be foreseen by the insurer as the area in which the vehicle would be operated. This court disagreed. Texas courts have previously declined to impose on an insurance agent a duty to explain policy terms to an insured. An insured has a duty to read the policy and, failing to do so, is charged with knowledge of the policy terms and conditions. The insurance policy purchased by the Ruizes clearly does not cover losses incurred in Mexico. When the Ruizes purchased their insurance, they knew or should have known that it did not cover accidents which occurred outside the jurisdictional limits stated in the policy; specifically, that it did not cover accidents in Mexico. If the Ruizes wanted a policy that included coverage in Mexico, they could have negotiated with an insurer for this extended coverage and paid the requisite premium. Having failed to do so, they are bound by the terms of the agreement.
The Ruizes also argue that the language in the policy is ambiguous and could easily be interpreted by the insured as providing coverage while the vehicle was being transported “between ports of entry”, of which there are five in the El Paso area. Whether a contract, like an insurance policy, is ambiguous is a legal question decided by examining the entire contract in light of the circumstances present when the parties entered into the contract. A policy is unambiguous as a matter of law if the court can give it a definite legal meaning. On the other hand, if a policy is subject to more than one reasonable interpretation, a court must adopt the construction most favorable to the insured when we resolve the uncertainty. Not every difference in interpretation of a contract or an insurance policy amounts to an ambiguity. Here, the court must decide whether more than one reasonable interpretation exists about the term “ports.” The Ruizes argue that the term could easily be interpreted to mean that the vehicle would be covered if traveling from one United States port of entry to another via Mexico. GEICO maintains that “port” does not mean port of entry.
Real parties argue that ‘between their ports’ applies to travel between two places in the United States over land outside the United States. That is not a permissible reading. Land travel between two places located within the United States is subsumed by the provisions covering accidents happening within the covered domains. The only other circumstance in which travel might occur between two such places is travel on or over water between such places. Travel over domestic waters is travel within the United States, considering it to include its territorial waters. That leaves only travel on or over international waters as the subject of ‘between their ports’, a necessary condition for transportation between certain states of the United States and between the United States and its possessions or territories. Giving ‘port’ its broadest permissible reading within the policy limits it to a seaport or other place within a covered domain from which such travel over international waters might occur insureds could not reasonably have expected coverage under the policy during their visit to Mexico.
The territorial limits of the policy are unambiguous. If an accident occurred within the United States’ boundaries, it would be covered by the policy. If an accident occurred within the boundaries of Puerto Rico, Canada, or any other United States territory or possession, it would be covered by the policy. If the automobile were being transported from the United States to Puerto Rico, or from Miami to the Port of Houston, and the carrier was sunk during a hurricane, the loss would be covered by the policy. There is no authority supporting the Ruizes contention that the language in their policy could be interpreted to mean that their vehicle would be covered when traveling from one United States port of entry to another via Mexico.
Even if the court were to agree with their argument, it would nevertheless be constrained to affirm the summary judgment. The Ruizes conceded during oral argument that if Mrs. Ruiz had entered into Mexico and returned to the United States through the same port of entry, the accident would not be covered by the policy. There is no evidence in the record before the court indicating which port or ports of entry were utilized by Mrs. Ruiz on the day of the accident. As this was a no-evidence summary judgment, the burden shifted to the Ruizes to present sufficient evidence to create a fact issue. If their own interpretation of the contract requires the utilization of “different” ports of entry to trigger coverage under the policy, then it was their burden to present evidence to establish that different ports of entry were in fact utilized on the day of the accident in order to create the purported fact issue upon which they rely.
The court sustained the ruling of the lower court.