New Mexico Auto Insurance Laws, Minimums, Requirements

What mandatory auto insurance laws exist in the state of New Mexico?

• In New Mexico, auto insurance is the law. All drivers must carry minimum liability coverages of $20,000 per person for bodily injury to or death of one person, $50,000 per accident for bodily injury to or death of two or more people, and $10,000 per accident for property damage.
• New Mexico offers an alternative to auto insurance that satisfies current insurance laws. Motorists have the option of leaving a $60,000 cash deposit or surety bond with the state treasurer’s office as evidence of financial responsibility.
• The New Mexico state legislature enacted the New Mexico Insurance Identification Database (IIDB) in 2001. The IIDB monitors the insurance status of registered drivers, so it’s best not to test your luck when it comes to driving without insurance. If you are caught driving without insurance in New Mexico, you may be charged with a misdemeanor, your vehicle registration may be suspended, and you could accumulate fines up to $300.

What is the Minimum Liability Coverage (Bodily Injury amounts per person, per accident, and property damage amounts):

If you buy automobile insurance in New Mexico, your policy must include minimum liability coverage of:

$20,000 per person for bodily injury to or death of one person,
$50,000 per accident for bodily injury to or death of two or more people,
and
$10,000 per accident for property damage

What are the Rental Car Insurance Requirements?

It is illegal to operate any motor vehicle without insurance in New Mexico, this includes rental cars. Rental cars must carry the minimum liability coverages required by state law. It is important to keep in mind that most New Mexico auto insurance policies include car rentals. Most credit cards cover car rentals as well, so be sure to check your auto insurance policy and/or check with your credit card issuer. If you find that your credit card and/or auto insurance policy do not cover rental cars, you must purchase car rental insurance from the car rental company. It typically costs an extra $7-$14 a day.

What are the rules pertaining to Uninsured/Underinsured Motorist Coverage?

Uninsured/Underinsured Motorist Coverage is not required in New Mexico. While New Mexico does not require this coverage, because it is a Tort state, most insurance companies recommend that all New Mexico drivers consider carrying higher coverages than the state minimums. 

What are the rules pertaining to the exclusion from coverage of a driver living in household?

In New Mexico, auto insurance companies can write policies that exclude household members. These exclusions are listed in the policy’s exclusions section, which also includes a list of all possible circumstances that would free the insurance company from the responsibility of paying a claim. It is important to examine your auto insurance policy carefully before you sign on the dotted line to avoid any issues of non-compliance with New Mexico auto insurance laws.

What are the rules regarding whether a driver has prior insurance? That is, how does state law handle it if a driver has no prior insurance or has let their previous insurance lapse?

If you fail to maintain continuous coverage on a vehicle throughout the period of operation, you have a lapse in coverage. This means that when your insurance lapses, you are driving without insurance. New Mexico’s insurance laws make it illegal for New Mexico motorists to drive without insurance or permit others to drive their vehicle without insurance. Driving without insurance in New Mexico is a misdemeanor and the penalties are severe. If you are caught driving without insurance in New Mexico, you may be charged with a misdemeanor, your vehicle registration may be suspended, and you could accumulate fines up to $300.

What are the rules and guidelines auto insurance companies must follow regarding the use of Personal Credit History in selecting applicants and setting rates?

In New Mexico, auto insurers are permitted to use Personal Credit History to help determine which products they will offer as well as rates. Your Personal Credit History may also be used to determine whether you will be making monthly or quarterly payments or if you will be required to pay the entire premium upfront. Personal Credit History is also used to create an “insurance risk score.” This score also helps determine your auto insurance rates. In order to enjoy a lower insurance premium, pay your bills on time in an effort to improve your score. This will also help improve your credit history so that in the long run, you can save money on your car insurance premium. While Auto insurance companies may use credit history to determine rates and offers for products, they rarely use credit history alone. They also consider age, gender, where you live, car make and model, how much you drive, and driving record.

Is the state a No Fault or Tort state? What does either mean to the policy owner?

New Mexico follows a Tort System. What this means is, if you are involved in an accident, someone must be found to be the cause or fault of the accident. The person deemed at fault is responsible for all damages. Damages are usually handled through the at-fault person's insurance company. Because New Mexico is a Tort state, most insurance companies recommend that driver’s consider carrying higher coverages than the state minimums. 

What is the average auto insurance premium in this state? As of what year?

As of 2006, New Mexico resident’s average insurance premium was approximately $737, the 29th most expensive in the nation. This was up 0.8% from the previous year. The national average was $817.

Sources

Insurance Information Institute

New Mexico Division of Insurance