Best homeowners insurance companies in New Mexico for 2024

Compare the best homeowners insurance companies in New Mexico

New Mexico homeowners pay an average rate of $2,405 annually for $300,000 of dwelling coverage. This rate is 12 percent more the national average of $2,151. This rate is also 16 percent more the average rate in neighboring Arizona, but 20 percent less than the average rate in Colorado.

Your personal rate for home insurance in New Mexico is likely to be different, however, as it is based on characteristics unique to you — like your credit history and the age and condition of your home. That said, you can get a feel for what you might pay below by reviewing average premiums obtained from Quadrant Information Services. In addition, you can see how each company fared in J.D. Power’s 2023 U.S. Home Insurance Study and how each was rated for financial strength by AM Best. These factors and more were used to award each New Mexico homeowners insurance company a Bankrate Score out of 5.0 points.

The top 4 home insurance companies in New Mexico

Additional New Mexico home insurance companies to consider

Liberty Mutual

Chubb

How Bankrate chose the best home insurance companies in New Mexico

Bankrate's editorial team assesses various metrics to find the best New Mexico homeowners insurance. We know that price is an important consideration, but it is only one of the factors you may take into account when shopping for your own policy. Customer service and financial strength ratings also play a role, as well as the breadth of coverage options and discounts available. We also look at each company's website and mobile app to see if they make it easy to do business online.

Cheapest home insurance companies in New Mexico

With average rates higher than the national average, New Mexico homeowners may benefit from comparison shopping their policy at least every few years. To get an apples-to-apples rate comparison, make sure the coverage limits and endorsement types are similar. Bankrate found that the following insurance companies tend to have the lowest average premiums for home insurance in New Mexico:

How to get cheap New Mexico home insurance

Home insurance is not required by law in New Mexico or any other state. However, if you have a mortgage, your lender will likely require you to purchase a policy. Even if you own your home outright, paying for a home insurance policy is typically cheaper than replacing your home in the  event of a total loss. If you're struggling to find affordable rates in New Mexico, consider these steps:

• Gather information on your house. When was your home built? How old is the roof? What is the square footage? This information will help you determine how much coverage you need and simplify the quoting process.
• Review top companies. Comparing coverage options, discounts, digital tools and agent availability from top companies will help you narrow down options that could meet your coverage needs. You may want to pay specific attention to companies that offer endorsements you want and those with lots of relevant discounts.
• Gather quotes. In many cases, you may be able to get a quote online. For some companies, you'll need to call or visit an agent. Most insurance professionals recommend comparing quotes for similar coverage selections from at least three companies.
• Complete an application for your chosen company. Once you choose the company with the best coverage package for you, it's time to fill out an application. You may be able to do this online, over the phone or in person with an agent.
• Wait to finalize your coverage. Once your application has been submitted, you should hear from the company shortly. This may happen instantaneously or require more time for their underwriting decision. Once you’re approved for coverage, you will pay your first premium. Note that homeowners insurance is typically paid through your escrow account, so you'll likely need to inform your lender about your coverage decision.

Best home insurance discounts in New Mexico

Discounts can play a significant role in lowering your premium. Many of them are easily earned and require very little work on your part. Here are a few that are common:

How to save on home insurance policy renewals in New Mexico

Securing a home insurance policy is a great start. However, rates can change every renewal period, so a good deal now might not be the best option a few years down the line. Here are a few ways to help keep your renewal cost low:

• Maintain your roof. Newer roofs may qualify your home for certain discounts depending on your carrier. A well-maintained roof can also reduce the risk of extreme damage, saving both you and your provider money.
• Maintain your credit. Maintaining a good credit score can help you keep lower insurance rates. If your credit score substantially improves, let your insurance provider know, and it may be able to offer you a lower rate.
• Limit your claims. Insurance professionals recommend only submitting claims when you can not afford to pay for the repairs yourself. The more claims a homeowner files, the riskier they become to insure, which increases the cost of home insurance.
• Reduce your fire exposure. New Mexico is susceptible to wildfires. Taking steps to reduce your fire risk, like installing sprinkler systems, creatig defensible space in your yard and choosing fire-resistant building materials may earn you a lower home insurance rate.

How much is home insurance in New Mexico?

The average cost of homeowners insurance in New Mexico is $2,405 for $300,000 in dwelling coverage. This is 12 percent more the national average of $2,151 a year for the same amount of coverage. New Mexico's rate may be higher than the national average because the state is prone to disasters such as wildfires, which are becoming more prevalent in the state due to climate change. New Mexico also has a higher rate of property crime, such as burglaries, than the national average. A robust home insurance policy may help financially protect you if you experience a covered loss.

New Mexico homeowners insurance rates by city

Your ZIP code plays a role in determining what your home insurance premium will be in New Mexico. Insurers look carefully at areas of high crime as well as locations that see frequent natural disasters. To protect themselves from increased risk, they are likely to charge more for policies in these regions. Conversely, areas that are seen as less susceptible to disasters and crime are likely to see lower rates.

*Rates are for $300,000 in dwelling coverage.

What does home insurance cover in New Mexico?

The typical home insurance policy is an HO-3 policy form. This type of home insurance policy covers the dwelling and other structures on an open peril basis, meaning anything that isn't explicitly listed under policy exclusions is covered. It is good to keep in mind that personal property is different. It is usually covered on a named perils basis, meaning only the perils listed in the policy are covered. Below are common causes of loss in New Mexico typically covered by a standard policy.

• Fire and lighting: Whether caused by a lightning strike, wildfire or a cooking mishap, fire is a covered peril on most home insurance policies. For homeowners living in high-risk wildfire areas, make sure your policy does not have a wildfire exclusion. If it does, ask your insurance agent about a standalone wildfire policy.
• Windstorm and hail: High winds, tornadoes and hailstorms are common in New Mexico but typically covered by an HO-3 policy. Some providers require homeowners to have a separate wind deductible, which is based on a percentage of the dwelling coverage. As the risk from high winds increases, standalone windstorm insurance policies may be another option for homeowners.

Additional home insurance coverage types in New Mexico

The coverage types offered in a standard home insurance policy typically include dwelling, personal property, liability, medical payments and loss of use coverage. New Mexico homeowners may also want to consider the following endorsements:

• Flood insurance: Because standard home insurance policies do not include flood coverage,you may want to purchase a standalone flood insurance policy from the National Flood Insurance Program (NFIP) or through a private insurance company. Some companies offer flood insurance as an endorsement, but this is rare.
• Sump pump coverage: Sump pump coverage pays to repair clogged sump pumps and pipes. It will also pay for accidental water damage caused by backups. Sump pump and water backup coverage is not typically included in a home policy, but many insurance carriers offer it as an optional endorsement.
• Yard and garden coverage: Yard and garden coverage will help pay to re-landscape your yard if your garden, trees, shrubs or lawn get damaged by a covered peril, including fires. Standard homeowners policies include coverage at 5 percent of the dwelling amount (not to exceed $500 per tree, bush or shrub), so consumers with extensive landscaping may choose to purchase additional coverage on their policy.

Common New Mexico home insurance problems

One of the biggest concerns for homeowners in New Mexico is the increasing cost associated with the state's wildfire risks. In particular, private residences and commercial property in Northern New Mexico are experiencing difficulty securing insurance. Here are some of the key challenges these areas are facing:

• The 2022 McBride Fires: These fires brought attention to the increased risk of wildfire loss in the future. Extreme weather is causing excessive heat and drought, increasing the likelihood of more wildfire losses.
• Reinsurance companies. Insurance companies use reisurance to ensure they remain financially stable in the event of a disaster with widespread claims. However, even reinsurance companies are becoming more hesitant to write policies in areas at high risk for wildfire loss.
• High insurance premiums. Even if you can secure coverage, you'll likely see high premiums in fire-prone regions as a result of more frequent losses and the higher risk rating passed down from reinsurance companies to insurance providers. These costs are eventually passed down to homeowners.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze April 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on married male and female homeowners with a clean claim history, good credit and the following coverage limits:

• Coverage A, Dwelling: $150,000, $300,000, $350,000, $450,000, $750,000
• Coverage B, Other Structures: $15,000, $30,000, $35,000, $45,000, $75,000
• Coverage C, Personal Property: $75,000, $150,000, $175,000, $225,000, $375,000
• Coverage D, Loss of Use: $30,000, $60,000, $70,000, $90,000, $150,000
• Coverage E, Liability: $500,000
• Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible, a $500 hail deductible and a 2 percent hurricane deductible (or the next closest deductible amounts that are available) where separate deductibles apply. 

These are sample rates and should be used for comparative purposes only. Your quotes will differ.