Obviously, the answer is, YES, Mexico does require 3rd party liability from a recognized Mexican insurance company, and no, your personal auto insurance written in Arizona is not recognized in the country of Mexico. For a few dollars a day, you can purchase not only the liability insurance, but one that also comes with a large number of other covered items and benefits, such as Travel Assistance, Legal Assistance, Towing, Medical Payments, etc… All are determined by their insurance companies “Terms & Conditions”.