New Mexico car insurance laws

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Like most states, New Mexico car insurance laws require that drivers carry liability insurance in order to be on the road legally. This is important as there were 46,786 reported car accidents in New Mexico in 2018, leading to 392 deaths. This is an indication that robust insurance coverage is an essential in the state.

Understanding your minimum requirements and optional coverages is important so that you can build a solid car insurance policy that provides adequate coverage in the event of an accident or other auto mishap. Minimum requirements are just that — minimums — and if you can, it is worthwhile to purchase additional coverage to be fully protected.

Car insurance laws in New Mexico

As we stated above, New Mexico auto insurance requirements are 25/50/10 for liability insurance. However, New Mexico drivers must also carry uninsured motorist coverage. Here is a breakdown of what your minimum coverage must include:

  • Bodily injury liability: $25,000 per person and $50,000 per accident
  • Property damage liability: $10,000 per accident
  • Uninsured motorist bodily injury: $25,000 per person and $50,000 per accident
  • Uninsured motorist property damage: $10,000 per accident

The average annual cost of minimum coverage in New Mexico is $337, which is $226 less than the national average of $563. Full coverage in the Land of Enchantment, which includes collision and comprehensive, is $1,388 per year, compared to the national average of $1,738.

Liability insurance in New Mexico

Liability, in an insurance context, means that you are responsible for paying the costs associated with an accident when you are the cause of it. New Mexico’s liability insurance laws cover you so you will not have to pay out-of-pocket costs in an at-fault accident. But are the minimum requirements enough to cover you adequately?

Most experts would say no. In a serious accident, you might not have enough coverage. Consider, for example, what might happen if you are in a hurry and run a red light, hitting a car that is waiting to make a left turn. If the driver is seriously injured and needs surgery or expensive rehab, the $25,000 minimum coverage could be gone in days. You would then be personally responsible for paying any additional costs out-of-pocket.

New Mexico’s PD liability is also quite low compared to other states when you consider the fact that the average price of a new car in the U.S. is more than $40,000. If the other car in your accident is a newer model or luxury car, and it is totaled or seriously damaged, $10,000 will not go far.

Is New Mexico a no fault state?

New Mexico is not one of the 12 no-fault states in the U.S. No-fault laws are put in place to limit the number of court cases that result from traffic accidents. In no-fault states, your ability to sue is limited, and you carry a type of insurance called personal injury protection that is used regardless of whose fault the accident is.

Since that’s not the case in New Mexico, you have three actions you can take after an accident that is not your fault.

  • You can file a claim with your own insurer, who will use subrogation to get a judgment from the other driver’s insurance company.
  • You can file a third-party claim with the other driver’s insurer.
  • You can file a personal injury lawsuit against the other driver.

Penalties for driving without insurance in New Mexico

There are several penalties you may face if you are caught driving without insurance in this state. Most significantly, you will receive a notice of suspension of registration after 30 days. At this point, you will owe a fine of $100 along with other fees when you clear the suspension. You will need to show proof of insurance at that time or else you will not be able to drive legally.

Additional auto insurance coverage options in New Mexico

Although you need to meet the New Mexico auto insurance requirements, you don’t have to stop there. Increasing your coverage to as much as you can afford is a good idea. You should also consider these optional coverage types that are available in New Mexico:

  • Collision: This will cover the costs of damage to your own car in an accident (remember: liability covers damage to the other car), minus a deductible that you choose when you purchase the policy. If you have an old car that’s not worth much, you may want to skip this, but if your car still has value, it is probably worth paying for collision coverage.
  • Comprehensive: Usually bundled with collision, comprehensive covers non-accident mishaps, such as theft, vandalism and natural disasters — such as when a tree falls on your car in a windstorm. It has a deductible and, like collision, may be required if you are leasing or have a car loan.
  • Medical payments (medpay): This can an help pay for your medical costs if you are involved in an accident. It will also pay for medical costs if you are injured as a pedestrian, while riding a bicycle or while riding in someone else’s car.
  • Gap insurance: You may receive a check from your insurer if your car is totaled, but it will be for the car’s depreciated value. If you owe more than that on a car loan, gap insurance will pay for the difference so that you have no out-of-pocket costs.
  • Towing and labor: This type of coverage kicks in if you need roadside assistance. It may cover towing charges, tire changes, jump starts, lockout assistance and more. Read your policy documents to find out the full scope of this coverage as it differs from insurer to insurer.

Frequently asked questions

What is the best car insurance company in New Mexico?

There are a number of good insurers writing policies in New Mexico and you can find the best one for you by shopping around and asking for free online quotes from several of them. Look for a combination of low premium prices, financial solidity and excellent customer service. Start your search with our Best Car Insurance in New Mexico page.

How much liability insurance do I need?

That depends on what you can afford, but most experts would recommend that you purchase more than the minimum required by New Mexico insurance laws. A good coverage option to shoot for is 100/300/50, which should cover your costs for most accidents.

What optional coverages are most important to have?

That depends partly on your personal situation and preferences. For example, if your car is newer and has significant value, you should carry collision and comprehensive coverage. If you have a car loan, gap coverage is a good idea until the loan is paid off. Some coverage options, like towing and labor, can make your life much easier in an emergency situation.