Auto insurance requirements in New Mexico

The state of New Mexico requires all drivers to carry car insurance while behind the wheel. This coverage goes toward protecting both you and other drivers and pedestrians. Drivers are also required to carry proof of insurance which must be shown at the behest of any law enforcement official. Below you can see the minimum insurance limits as prescribed by the state of New Mexico as well as a breakdown of how this coverage works.

if you are leasing or financing your vehicle, you may need to purchase further physical damage coverage (sometimes referred to as full coverage). 

Liability insurance coverage in New Mexico

Liability car insurance is required in the state of New Mexico. Liability coverage pays for damages that you cause to another in an at-fault accident. There are two specific types of coverage included: bodily injury (BI) and property damage (PD) liability. Bodily injury liability covers medical bills, while property damage liability covers damages you inflict on the property of another. Liability also includes coverage for funeral expenses, lost wages, and pain and suffering. Remember that your liability coverage never pays for your injuries or damage to your own property.

What are state-mandated car insurance limits?

Insurance limits are the maximum amount that your insurance company will pay in the event of a claim. States set minimum limits, which are the lowest amounts that a driver can carry and still be legal. In New Mexico, liability limits are often written out as 25/50/10, corresponding to bodily injury per person, bodily injury per accident, and property damage. Have a look at the breakdown of each of these coverage types below.

• $25,000 in bodily injury per person is the total amount that your insurer will pay to cover injuries you cause to any one person in an at-fault accident.
• $50,000 in bodily injury per accident is the maximum dollar amount that will be paid out for all those injured in an accident you cause.
• $10,000 in property damage is the total amount that your insurance company will cover for the damages that you cause to another person’s property in an at-fault accident.

Do New Mexico’s required car insurance minimums provide adequate coverage?

New Mexico’s minimum liability limits are fairly similar to most other states. However, just carrying the minimum amount of coverage can leave you at risk. The minimum bodily injury requirements imposed by New Mexico law can be exhausted quite quickly with even moderate injuries. Furthermore, the $10,000 property damage limit is not likely to go far toward repairing or replacing a vehicle or other property that you damage.

Almost all insurance companies will allow you to increase these limits for a nominal extra premium. Most insurance experts recommend setting your liability limits to at least 50/100/50 to be safe, and even higher if you have valuable assets. Adding coverage for your own vehicle is also a good idea to avoid having to pay for repairs out-of-pocket.

New Mexico’s penalties for driving without proof of insurance

If you are found to be driving in New Mexico without car insurance, you can expect the following penalties:

• A fine of up to $300
• Imprisonment up to 90 days
• Suspension of vehicle registration
• License plate confiscation

Car insurance options in New Mexico

New Mexico has a number of other coverage options to choose from. Below are a number of the most popular car insurance coverage options in New Mexico.

• Comprehensive: Comprehensive insurance protects your vehicle against non-collision damages your vehicle might sustain (though it does cover collisions with animals).
• Collision: Collision insurance covers your vehicle in the event that you collide with another car or fixed object. Keep in mind, however, that collisions with animals are covered under comprehensive only.
• Gap coverage: Because of the rapid depreciation of most new vehicles, it can be a good idea to have some built-in protection. This type of insurance covers the difference in what you owe on a vehicle loan and the vehicle’s actual cash value.
• Medical payments: Often referred to as “med pay,” this coverage goes toward paying your medical bills or funeral expenses (as well as those incurred by passengers in your vehicle). This coverage usually has limits between $5,000 and $10,000 and can be used regardless of fault.
• Rental car reimbursement: If your car is rendered inoperable because of a covered loss, this coverage can help pay for a rental until yours can be fixed. Limits can vary depending on which company you choose.
• Roadside assistance: If you break down on the highway, this coverage goes toward the costs of a tow, flat tire change, or a number of other related costs.
• Uninsured/underinsured motorist (UM/UIM): Uninsured/underinsured motorist insurance can help in the event that you suffer injuries or property damage in an accident in which an uninsured or underinsured driver is at fault and is unable to pay.

New Mexico is a diminished value state

New Mexico is a diminished value state, meaning drivers are allowed to recover diminished value from the at-fault party’s insurance company. When your vehicle experiences an accident, even if it is fully repaired to its pre-loss condition, the resale value decreases. The involvement in a collision makes your car’s value lesser than similar vehicles that have not experienced an accident. A diminished value claim allows you to recoup the losses you might experience when selling your car. 

Since New Mexico is one of the 15 states that offers compensation for diminution in value, you may file by contacting the at-fault party’s insurer. In order to file a diminished value claim in New Mexico, certain requirements must be met:

• You are not entitled to compensation if you were the party at fault in the accident
• Documentation will be required to process your claim. Make sure you can provide photos, records of repairs made, and proof of the value of your vehicle by a trusted source. 
• In New Mexico, the statute of limitations for filing a diminished value claim is 4 years. 
• New Mexico does have uninsured motorist coverage for diminished value claims.

Why abiding by New Mexico’s car insurance laws is important

Not only is having insurance legally required, but it’s also a smart way to protect yourself and your assets. Increasing your limits or adding additional coverage is highly recommended to avoid being exposed to unnecessary risks. If you are concerned about the additional costs that this could bring, it might be time to consider looking for a new policy altogether. The Zebra can help you find insurance quotes from many top companies.