Brazil just wasn't issuing paper TVIPs for nearly two years - but yes, if I had had an accident, what would have been the outcome. I was legally in Brazil with a visa driving a currently registered vehicle with no TVIP ever issued and not asked for on the way out and with newly paid up liability insurance. Hmmmm!
Getting a bit off topic but it is a constant battle to separate truth from fiction - and there are also several truths sometimes. Bolivia supposedly doesn't require insurance for less than 30 days in country (but nobody can answer my question as to who pays up in case of an accident), but recent reports are that some travellers have been asked for proof of insurance to get into Bolivia.
Brazil stories seem to be similarly confusing, and then there is Ecuador with no insurance available and no information on what to do in case of an accident.
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