The main issues around insurance in Mexico:

1) Your insurance company is your bailor and guarantor, meaning instead of going to jail for a serious accident you get to go free whilst the insurance company goes to work on your behalf;

2) Liability is a big issue. As a visitor involved in a local accident, you want to be sure to be covered for third party damages, liability, etc. or - la carcel could be your next temporary residence and it could cost you lots of money.

Don't drive at night, keep to a lower speed limit because of the "sleeping policeman" speed bumps and sudden incidents - many in Mexico do not use flares, they use rocks to warn drivers of breakdowns and then forget to remove the rocks when they finally drive off. Animals are common in the roadways, and around celebratory times drunks may stagger down the road - or on occasion actually fall asleep on the roadway. It pays to be a bit more cautious and vigilant here, but you can generally drive safely.

Also only get gasoline at formal (Pemex) gasoline stations (preferably choose those with filtration, and keep your tank above 1/2) - stations can run out for a day or two, and occasional stands or "informal stations" selling what appears to be gasoline out of bottles or cans may be selling very adulterated gasoline.

I've driven extensively over the years in Campeche, Chiapas, Oaxaca, Tabasco, Quintana Roo, Veracruz and Yucatan in southern Mexico, as well as Belize, Guatemala, etc.