New Mexico's Auto Insurance Rates: Why So High?

New Mexico has some of the cheapest car insurance rates in the country, with the average cost of a Progressive liability-only auto insurance policy being $72 per month in 2020-2021. The state's minimum coverage liability limits are 25/50/10, meaning drivers are required to have $25,000 of coverage for bodily injury liability per person, $50,000 per accident, and $10,000 for property damage liability per accident. The average monthly cost for state minimum car insurance in New Mexico is around $34.

Minimum auto insurance requirements in New Mexico

In New Mexico, drivers are required to have a minimum of liability auto insurance. The minimum liability insurance coverage in New Mexico is often referred to as "25/50/10 liability coverage". This means that drivers must have:

• $25,000 per person for bodily injury, with a total maximum of $50,000 per incident.
• $10,000 for damage to another person's property.

These minimum requirements are fairly similar to most other states. However, carrying the minimum amount of coverage may not be enough in the event of a serious accident. The $10,000 property damage limit, for example, is unlikely to cover the cost of repairing or replacing a vehicle or other property.

In addition to the minimum liability insurance, New Mexico drivers may also want to consider the following optional coverages:

• Collision insurance: This covers damage to your vehicle caused by a collision with another vehicle or object, subject to a deductible.
• Comprehensive insurance: This protects your vehicle from non-collision damages, such as fire, theft, vandalism, glass breakage, and contact with animals.
• Uninsured/underinsured motorist coverage: This protects you if you are in an accident with a driver who does not have insurance or does not have enough insurance to cover the damages.
• Medical payments coverage: This optional coverage pays for reasonable expenses for injuries incurred by you and your passengers in a motor vehicle accident, regardless of fault.

It is important to note that driving without insurance in New Mexico can result in penalties such as fines, imprisonment, suspension of vehicle registration, and license plate confiscation.

Collision and comprehensive coverage

Both collision and comprehensive coverage have a deductible that you are responsible for paying before the coverage starts covering the damage. The main difference between the two is the situations in which they apply. While collision coverage is mandatory in some places, comprehensive coverage is often optional. However, if you finance a new car with a loan or lease, lenders will almost certainly require collision coverage. Similarly, a new car lender is likely to insist on comprehensive insurance.

In New Mexico, drivers are expected to operate their motor vehicles with a minimum of liability auto insurance. The minimum auto liability insurance amounts required in New Mexico are:

• $25,000 for bodily injury to or death of one person
• $50,000 for bodily injury to or death of two or more persons
• $10,000 for property damage in any one accident

While collision and comprehensive coverage are not mandatory in New Mexico, it is recommended to carry more than the mandatory minimum requirement. This is especially true if you have a high-value car or drive long distances, as the cost of repairing or replacing your vehicle can be expensive.

Uninsured/underinsured motorist coverage

In the state of New Mexico, uninsured/underinsured motorist coverage is mandatory for all motorists. This coverage is intended to protect drivers in the event of an accident with an uninsured or underinsured driver. It applies to both property damage and bodily injury claims, including medical bills, lost wages, and pain and suffering.

The minimum amount of uninsured/underinsured motorist coverage required in New Mexico is:

• $25,000 per person for bodily injury
• $50,000 per accident for bodily injury
• $10,000 per accident for property damage

While this coverage is mandatory, motorists do have the option to reject it. However, the process for rejection is strict and must be submitted in writing to the insurance company. The rejection must include a written statement of rejection, information about the cost of uninsured/underinsured motorist coverage, and the insurance policy sent to the insured. If any of this information is missing or if the rejection is not in writing, the insurance company is legally required to provide uninsured/underinsured motorist coverage.

It is important to note that New Mexico has a high rate of uninsured drivers, with 21.6% of all drivers in the state lacking liability insurance. As such, it may be advisable for motorists to purchase more than the minimum amount of uninsured/underinsured motorist coverage to ensure adequate protection in the event of an accident.

Medical payments coverage

The insurance covers medical and funeral expenses for you and your passengers, including:

• Doctor, hospital, and other medical bills related to injuries and treatment
• Lost wages and benefits for time off work during recovery
• Amounts paid for replacement household and childcare services
• Other out-of-pocket expenses resulting from injuries
• Disability and disfigurement

The cost of medical payments coverage depends on the coverage limit, which is usually a few thousand dollars, but you can buy more coverage if needed. It is important to note that this insurance is not a substitute for health insurance, as it only covers injuries sustained in a car accident.

In New Mexico, the minimum auto liability insurance requirements are:

• $25,000 for bodily injury to or death of one person
• $50,000 for bodily injury to or death of two or more persons
• $10,000 for property damage in any one accident

While medical payments coverage is not mandatory, it can provide valuable financial protection in the event of a car accident, especially if you have high-deductible health insurance or no health insurance at all. It ensures that you and your passengers can receive the medical care you need without worrying about the financial burden.

Penalties for driving without insurance

Driving without insurance in New Mexico can lead to some serious consequences. The New Mexico Mandatory Financial Responsibility Act requires all drivers in the state to have a minimum of liability car insurance or an alternate form of financial responsibility, such as a bond. Failing to comply with this law is a misdemeanor and can result in the suspension of your vehicle registration.

If you are caught driving without insurance in New Mexico, you may be fined up to $300 for a first offence, and this can be combined with a jail sentence of up to 90 days. If you do not return your license plates and vehicle registration to the New Mexico Motor Vehicle Division (MVD) after the suspension, the fine can increase to $1,000, and the jail sentence can be extended to six months.

In addition to these criminal penalties, you could face civil penalties if you cause an accident while uninsured. You could be held personally responsible for damages to other parties and their property, and you may be sued in civil court. Your assets could be seized, and your wages garnished, to pay for these damages.

To avoid these penalties, drivers in New Mexico must carry a minimum of $25,000 in bodily injury liability coverage per person, $50,000 in bodily injury liability coverage per accident, and $10,000 in property damage liability coverage per accident.

Frequently asked questions