I have been told that driving my private vehicle from California into Mexico is no big deal EXCEPT that I must have Mexican insurance. I am looking for specific recommendations about what to look for when buying the insurance - are all policies basically the same, is there an official agency that needs to underwrite the policies, are there exemptions to be wary of, etc etc. If you know of approximate cost of the policies, please post that as well.
The company I have used before, as recommended by "Mexico" Mike, Nelson Insurance is apparently no longer around, as evidenced by the broken link, and the fact that it's no longer listed on his review page.
His page also claims that insurance is not strictly required:
I do know that it's not required for Mexicans to have auto insurance, but I've also heard that it is required for foreigners to have auto insurance when registering their vehicle at Mexican customs. I've always had insurance when I entered, so have never tested this requirement personally.
And as cheap as Mexican auto insurance is (or has been for me, with the company that's no longer around), I think you'd be foolish not to buy insurance, too.
And finally, one thing to be aware of when buying Mexican Auto insurance is that most Mexican auto insurance policies work differently than U.S. insurance policies. Where as part of a U.S. policy, you generally select a deductible, which in turn affects your premium, most Mexican policies simply pay a percentage of damages, up to a maximum. I have seen some Mexican policies that operate more like U.S. policies, but they are hard to find (I think Nelson used to offer those).
You can buy a policy online through AAA. See this link. It does not appear that you have to be an AAA member to buy a policy. The cost depends on your car, length of your trip, what limits you want, etc; it should be easy to see a quote.
I haven't done this myself, and I also can't speak to how competitive the price is, but I have had my regular auto policy through AAA for several years and have found them to have good service and be very competitively priced.
You might also ask your own auto insurance company. If they don't write Mexico policies themselves, they may be able to recommend another company.