Saturday 4 February 2023

An Interesting Aspect of Private Motor Vehicle Insurance in Costa Rica

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4 February 2023 - At The Banks - BCCR

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QCOSTA RICA BLOGS – It is “Marchamo” time again in Costa Rica, the name for the annual vehicle Circulation Certificate required to be purchased for all vehicles on the road in Costa Rica, by December 31st, and valid for the following year. Included in the purchase price of the Certificate is compulsory third party no-fault liability insurance for injuries caused in a vehicle accident.

The compulsory insurance coverage is approximately ¢6,000,000 (six million) colones of coverage, or between US$11,000 and US$12,000 U.S., at current exchange rates and covers medical expenses for physical injuries sustained by persons only.

As the compulsory insurance coverage does not cover property damage, this makes Costa Rica the only country that I know of that allows you to own a private vehicle and cause property damage to a third party in an accident circumstance, where you do not have to show some basic ability to pay compensation through compulsory property damage insurance. I’m sure that other countries do exist where it is not a requirement, but I don’t personally know of them. Some countries in Africa come to mind as potential candidates for this.

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The majority of Tico (Costa Rican) vehicle owners only carry this basic compulsory third party liability insurance included in the purchase of the Marchamo (annual vehicle circulation permit). I can tell you that I have been involved in two relatively minor traffic accidents in the seventeen years that I’ve lived and been driving in Costa Rica, neither accident being adjudged as being my fault, and in each case I was faced with paying my own vehicle damage, having been hit by vehicles driven by impecunious Ticos.

As a lawyer, I’m telling you that you will be getting “blood out of a stone”, before you will have your collision damage paid for by a Tico in these circumstances, not to mention that Ticos tend to drive their vehicle as much as a weapon, as a vehicle of transport.

Of course, private collision insurance is available to be carried on your own vehicle, which will cover the collision damage repair costs in these circumstances. Yes, at very high premium payment amounts for such coverage. If you were to make such a collision damage claim to the insurer under your private insurance coverage, you can expect the insurance premium to increase in the succeeding year, which will provide for the complete recovery by the insurer of the amount paid over the succeeding three years of premium payments, and then the premium will stay at that inflated amount forever more.

I carry private third party liability insurance coverage on my vehicle in addition to the compulsory insurance included in the Marchamo.

I believe that it is the responsible thing to do and not that expensive if you qualify for the safe-driver discount. I don’t carry private collision insurance coverage because of the premium amount charged for such. I just accept the fact that I’ll be making payment for my own vehicle damage repairs in any accident circumstance that arises, regardless of fault, until the law is changed to require compulsory third party property damage insurance coverage as well.

The present circumstances of not requiring compulsory third party property damage insurance on private vehicles is, in my opinion, less than fair.

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Richard Philps
Attorney Richard (Rick) Philps is a Canadian citizen, naturalized as a citizen of Costa Rica. Rick practiced law in Victoria, B.C., Canada as a member of the Law Society of British Columbia, for fourteen years, prior to moving to Costa Rica in 1998. Rick then earned his Bachelor of Laws and Licensing Degrees (Civil Law), with Honours, and a Post-Graduate Degree in Notary and Registry Law, from the Metropolitana Castro Carazo and Escuela Libre de Derecho Universities, in San Jose. Rick is a member of the Costa Rica College of Lawyers, and practices law in Costa Rica in the areas of real estate and development, corporate, commercial, contract, immigration, and banking. To contact Attorney Rick Philps about hiring him as your Costa Rican Attorney; Email:, Website:

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