Yes, and No! Mexico Tourist Auto Insurance is NOT a “get out of jail free” card, in light of most peoples impressions. Many insurance agents neglect or flat leave out that possibility, even after purchasing their Mexico insurance.
In Mexico, a car accident is or can be considered a criminal offense, and not a civil offense as is common in the U.S. and Canada. If you injure someone, and they end up in the hospital, (even yourself, as ridiculous as that sounds) then that is generally when the authorities get involved. Granted, their involvement is also determined by the seriousness of the injuries to everyone involved.
Consequently, if injuries are serious, or even fatal, then there is the likelihood you will end up before a Magistrate (a Judge) who determines the Mexican courts course of action. Many Mexico Tourist Auto policies provide for Legal Representation (as ours does) and the payment of Bail Bonds just for this reason.
It is very, very, rare for someone to be held in jail if they posses a valid Mexico Tourist Auto policy, OR enough US currency to address the payment for all fines, medical care etc. After all, the Mexican Gov’t, especially now, wants to encourage as much travel in Mexico as possible, especially to the well known tourist destinations. Putting tourists in jail for minor traffic accidents will not help their cause.
Lack of authorized Mexico Tourist Auto insurance, fatalities, severe injuries, and drinking and driving are but a very few of the ways you can make your way to a Mexican jail. In many respects, much like the U.S.