Auto insurance costs in Mexico are experiencing a period of sustained increases. According to a report from xataka.com.mx, the National Consumer Price Index recorded a 5.19% annual rise in policies during the first half of April, representing the largest jump since November 2024.
This phenomenon marks the tenth consecutive biweekly period of price hikes in the sector, according to figures from INEGI. The primary driver is the implementation of the 2026 fiscal package, which was approved by Congress late last year.
The tax reform eliminated a key benefit for insurers: the ability to recover VAT (IVA) on repair invoices as a tax credit from the SAT. Starting in January 2026, the VAT incurred from repairs, hospitalizations, and replacement parts will become an expense that companies must absorb directly.
The market began reacting to this measure even before its legal formalization. Prices began a gradual climb in the second half of November 2025, breaking a downward trend that had lasted for five previous biweekly periods.
Impact on Industry and Consumers
Quálitas, the leading insurer in the Mexican automotive market, is already showing the financial consequences of this change. During the first quarter of 2026, the company reported a loss ratio (claims cost) of 11.775 billion pesos.
The firm's loss ratio reached 62.6%, an increase of 2.9 percentage points compared to the same period last year. The company attributes this rise to the impact of the new tax reform.
Ariel Méndez, a stock market analyst at BX+, explained to La Jornada that Quálitas is looking to maintain its client base without immediately passing the full cost on to users. However, the analyst warns that the strategy of preserving market share has financial limits.
“The insurer is directing its strategy toward maintaining market share. However, the inability to credit VAT is putting pressure on its loss ratio and combined ratio, and while the effect stabilizes, it could be a transition year for the company,” Méndez noted.
The situation is critical for insurance penetration in the country, which is currently among the lowest in Latin America. Pilar García, CEO of Rastreator.mx, noted that the tax hike is occurring at a time when financial protection culture remains low.
“The fiscal change that prevents insurers from deducting VAT on certain services will lead to higher operating costs and could be reflected in an increase in premiums,” García warned.
Given this scenario, experts recommend that drivers avoid automatic renewals. Comparing coverage, deductibles, and insured sums across different companies can lead to annual savings of several thousand pesos, as some insurers have managed to absorb the fiscal impact better than others.
