Alyssa Lane
New Mexico is not a no-fault state for auto insurance. It is an at-fault or tort state, which means the driver at fault for a car accident is responsible for paying for other people's injuries and property damage resulting from the accident. In no-fault states, drivers are mandated to carry personal injury protection (PIP) insurance to pay for their own medical expenses after a car accident, regardless of who is at fault. However, in New Mexico, PIP is not required, and drivers can file lawsuits to seek compensation for basic medical expenses after an accident.
| Characteristics | Values |
|---|---|
| Is New Mexico a no-fault state? | No |
| What type of state is New Mexico? | "At-fault" or "tort" state |
| What does being an "at-fault" state mean? | The person who is at fault for a car accident is responsible for paying for other people's injuries and property damage resulting from the accident |
| Can drivers in New Mexico file lawsuits? | Yes, drivers can file lawsuits to seek compensation for even basic medical expenses after an accident |
| Is Personal Injury Protection (PIP) insurance required in New Mexico? | No |
| What type of insurance is required in New Mexico? | Liability insurance |
| What are the consequences of driving without insurance in New Mexico? | A fine of up to $300, up to 90 days of jail time, or a combination of both |
| What is the average cost of car insurance in New Mexico? | $905 annually |
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![Insurance Laws of the Territory of New Mexico. Comp. 1909. Jacobo Chavez, Superintendent of Insurance, Santa Fe, New Mexico 1909 [Leather Bound]](https://m.media-amazon.com/images/I/617DLHXyzlL._AC_UY218_.jpg)
What You'll Learn
New Mexico is an at-fault state
New Mexico is an "at-fault" or "tort" state, which means that the person at fault for a car accident is responsible for paying for other people's injuries and property damage resulting from the accident. This is in contrast to no-fault states, where drivers are required to use their own insurance to pay for medical expenses after an accident, regardless of who is at fault. In New Mexico, the insurance company for each driver involved in an accident will assign an adjuster to determine who is at fault. The victim must then file a claim with the at-fault driver's insurance company to collect payment for their losses.
Being an "at-fault" state helps keep New Mexico's insurance costs relatively low compared to no-fault states. New Mexico requires all drivers to carry liability insurance, which pays for others' expenses, such as damage to their vehicles and medical expenses, after the policyholder causes an accident. This is the only type of insurance that is legally required in New Mexico, and it is a misdemeanor to drive without it, which can result in fines and even jail time.
New Mexico's traffic enforcers are authorized to request proof of insurance at the scene of an accident, and uninsured drivers will immediately have their license plates confiscated. They will then have 30 days to provide proof of insurance to the MVD and update their insurance status, or they will be guilty of a misdemeanor and subject to additional fines and penalties.
New Mexico uses a pure comparative negligence system, which means that drivers can collect damages proportionate to their fault in causing the crash. For example, if a driver is found to be 99% at fault, they can still collect 1% of damages from the other driver. This system allows accident victims to recover some money for their injuries even if they were more at fault than the other driver.
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New Mexico's insurance costs are lower than no-fault states
New Mexico is an "`at-fault /"tort"` state, which means that the driver who is at fault in a car accident is responsible for the other party's expenses, including bodily injury and property damage costs. This is covered by liability insurance, which is a requirement for all drivers in New Mexico. On the other hand, no-fault states require each driver to use their own insurance to pay for medical expenses after an accident, regardless of who is at fault.
Personal injury protection (PIP) insurance is required in typical no-fault states to cover one's own medical expenses after a car accident. In New Mexico, PIP is not required. Instead, the insurance company for each driver involved in an accident will assign an adjuster to determine who is at fault. The victims must then file a claim with the at-fault driver's insurance company to receive compensation for their losses. This process helps keep insurance costs in New Mexico relatively low compared to no-fault states.
According to the National Association of Insurance Commissioners' 2020 data, the average cost of car insurance in New Mexico is $905 annually, which is 14% lower than the average in the United States. However, this average cost can vary, and drivers can expect to pay anywhere from $238 to $6,860.97 per year, with high-risk young drivers paying the highest premiums.
New Mexico's minimum liability limits are similar to most other states, but carrying only the minimum amount of coverage may not be sufficient. The minimum bodily injury requirements can be quickly exhausted with even moderate injuries, and the $10,000 property damage limit may not cover the full cost of repairing or replacing a vehicle or other property. Therefore, it is recommended to increase these limits or add additional coverage to avoid unnecessary risks and out-of-pocket expenses.
In addition to the minimum coverage requirements, drivers in New Mexico may want to consider purchasing collision and comprehensive insurance, which will cover damage to their own vehicle, regardless of fault. This can provide added protection and peace of mind in the event of an accident.
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New Mexico requires liability insurance
New Mexico requires all drivers to have a minimum level of liability auto insurance. This includes business and personal vehicles. 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, and $10,000 for injury to or destruction of property of others in any one accident.
Drivers must have proof of insurance, and insurance companies must report their customers' insurance information electronically to the New Mexico Insurance Identification Database (IIDB). This means that the state no longer relies on insurance information collected at the time of vehicle registration. Vehicles that do not have the minimum liability insurance are subject to having their registration suspended. If you receive a Notice of Noncompliance from the Motor Vehicle Division (MVD), but you have the minimum required liability insurance, you should contact your insurance company immediately and ask them to provide your insurance information to the IIDB. If your insurance information is not provided within 30 days of the date on the Notice of Noncompliance, your vehicle's registration will be suspended by the MVD.
If you are taking up residency in New Mexico, you must surrender your license from any other state and apply for a New Mexico license within 30 days of moving. You will need to provide proof of New Mexico residency, a vehicle ID inspection certificate, and proof of insurance, including the policy number and insurance carrier name.
New Mexico also has specific insurance requirements for businesses. For example, businesses with three or more employees are required to carry workers' compensation insurance. Commercial auto insurance is also mandatory for business-owned vehicles, and it covers injuries and property damage in an accident, vehicle theft, and some types of damage.
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Personal injury protection (PIP) insurance is not mandatory
Personal injury protection (PIP) insurance, also known as no-fault insurance, is not mandatory in all states. In fact, as of December 2021, only 12 US states require PIP coverage as part of their no-fault auto insurance laws: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, and Utah. Three other states require PIP but do not have no-fault insurance laws.
In states where PIP is not mandatory, it is generally still considered a valuable and recommended coverage to have. This is because PIP can help cover various expenses that may not be covered by other types of insurance. For example, PIP can cover medical bills and lost wages for the policyholder and their passengers, regardless of who is at fault in an accident. It can also provide coverage for other related costs, such as funeral expenses, household services, and disability.
The main goal of PIP is to provide prompt payment for auto accident injuries. By having PIP coverage, individuals can avoid the potentially lengthy process of filing a liability claim or lawsuit against another party. This can help reduce the overall cost of auto insurance by keeping lawsuits over minor injuries out of the courtroom.
In states where PIP is optional, individuals can choose to purchase it as part of their car insurance policy. The specific coverage requirements and availability of PIP may vary from state to state, so it is important to review the laws and regulations in your specific state. Additionally, even in states where PIP is not mandatory, other forms of insurance, such as medical payments coverage (Med Pay), may be available to help cover injury-related expenses.
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Penalties for driving without insurance in New Mexico
Driving without insurance in New Mexico is against the law and can result in various penalties. The New Mexico Mandatory Financial Responsibility Act requires all drivers in the state to have minimum liability car insurance or an alternative form of financial responsibility, such as a bond.
If you are identified as driving without insurance in New Mexico, the Motor Vehicle Division (MVD) will send you a notice of noncompliance, giving you 30 days to update your insurance status. Failure to do so within this time frame will result in the suspension of your vehicle registration and a misdemeanor penalty of up to $300. If you do not return your license plates and registration after the suspension, you may face additional penalties, including a fine of up to $1,000, up to six months in jail, or a combination of both.
The consequences of driving without insurance in New Mexico can be severe, especially if you are involved in an accident. Even if you are not at fault, being uninsured can make it difficult to obtain compensation for damages. If you are at fault, you may be responsible for tens of thousands of dollars in damages to your vehicle, the other driver's car repairs and hospital bills, and your own medical care.
To avoid these penalties and consequences, it is important to maintain at least the minimum amount of car insurance required by New Mexico law. This includes $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. If you are having difficulty obtaining insurance due to your driving history, the New Mexico Motor Vehicle Insurance Plan can assist you in obtaining the legally required coverage.
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Frequently asked questions
No, New Mexico is an "at-fault" or "tort" state, which means the person at fault for a car accident is responsible for paying for other people's injuries and property damage resulting from the accident.
New Mexico requires all drivers to carry liability insurance, which pays for others' expenses after you cause an accident, such as damage to others' vehicles and their medical expenses.
Driving without insurance in New Mexico is a misdemeanor and can result in fines, suspension of your vehicle registration, and even jail time.
