Marchamo and Private Insurance in Costa Rica
What Is the Marchamo in Costa Rica?
Christmas season is here, and the Costa Rican Grinch government is getting ready to take your Santa Aguinaldo away through the marchamo. Naturally, people ask: what is the Marchamo good for?
The marchamo is essentially a mandatory annual vehicle tax in Costa Rica that must be paid every year. The Marchamo includes two components:
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A tax, and
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A mandatory insurance policy.
Understanding the difference between these two elements is essential when evaluating Marchamo and private insurance in Costa Rica.
The Insurance Component of the Marchamo
The insurance portion of the Marchamo covers injuries or death of people involved in a traffic accident.
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In the event of death, the insurance operates similarly to a term life insurance policy, providing compensation to the victim’s family members.
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In the event of bodily injury, the insurance covers medical treatment costs and may include disability compensation, depending on the severity of the injuries.
This mandatory insurance exists regardless of whether the vehicle owner holds additional private insurance coverage.
The Tax Component of the Marchamo
The tax portion of the Marchamo grants the legal right to operate a vehicle in Costa Rica. Beyond that, part of the funds collected are distributed to support government agencies related to transportation and road safety, including:
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ARESEP, which regulates fuel pricing
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COSEVI, which manages the traffic police and road safety initiatives
This tax is separate from insurance and applies strictly to the legal circulation of vehicles.
How Much Does the Marchamo Cost?
The cost of the Marchamo is approximately 3.15% of the vehicle’s tax value.
The Marchamo is administered by INS (Instituto Nacional de Seguros) and can be paid through:
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Banco Nacional
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Banco de Costa Rica
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Other authorized payment agencies
Can Private Insurance Replace the Marchamo?
The Marchamo is mandatory.
A recent client asked whether paying for private vehicle insurance would allow them to avoid paying the Marchamo. The answer is no.
Even if you hold private insurance, the Marchamo must still be paid because it includes:
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Mandatory injury and death coverage, and
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The legal vehicle circulation tax
Private insurance can be purchased in addition to the Marchamo—either through INS or a private insurer—but it cannot replace it.
This is a common misconception when evaluating Marchamo and private insurance in Costa Rica.
How to Check Your Marchamo Amount
To verify how much you need to pay, you can consult the official INS website directly.
