New Mexico Motor Vehicle Insurance Plan – NM AIP

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If you drive in the Land of Enchantment, you must carry auto insurance in order to be on the road legally. But if your driving record includes past traffic accidents or you are simply young and inexperienced, then New Mexico’s auto insurers may refuse to cover you as a high-risk driver. When all else fail, you can turn to the New Mexico Motor Vehicle Insurance Plan. In New Mexico, if eligible, the Plan will ensure you get at least the state minimums of $25,000 per person/$50,000 per accident for Bodily Injury and $10,000 per accident for Property Damage.

What is the New Mexico Motor Vehicle Insurance Plan (NM AIP)?

While few people have heard of it, New Mexico’s AIP has been around since 1948. It was created as New Mexico’s assigned risk plan in order to ensure coverage for drivers that the state's insurers would not insure in the voluntary NM auto insurance market. It’s an agreement between the state and New Mexico’s insurers to distribute high risk drivers equitably across all insurance companies. High risk drivers are usually associated with higher chance of accidents and claims, and this way, no one company has to bear the losses that often come with insuring high risk motorists.

New Mexico’s Motor Vehicle Insurance Plan does not offer insurance policies itself. Instead, it assigns drivers in the assigned risk pool to the auto insurance companies that are licensed and selling insurance in the state. The number of high risk drivers assigned to each auto insurance company is based on the overall market share of that company in New Mexico. Once you are assigned an insurer through the NM AIP, you will be covered for three years. If necessary, you can re-apply to the Plan at the end of 3 years, and if you remain eligible, you should find coverage again.

NM AIP Eligibility

While the Plan is designed to cover all New Mexico drivers, there are still some basic criteria you have to meet. You must:

  • State on your application that you have tried to find auto insurance in the voluntary market within the last 60 days – and been turned down.
  • Have a valid New Mexico driver’s license and a car that is registered in the state.
  • Fill out the application accurately.

If you meet the criteria above, then you’re on your way. However, if you have an outstanding, unpaid auto insurance bill from another New Mexico insurer, or your insurance has been cancelled within the last 12 months because you didn’t bring your vehicle in for a requested inspection, then even the NM AIP will not assign you to a new insurer. Happily, if you pay the bill and/or bring your vehicle to the designated insurance inspector, your application to the NM AIP can proceed immediately. But be aware that if your application is reviewed and you’ve omitted or misrepresented important facts about yourself, your car or your driving record, then the New Mexico AIP may refuse to assign an insurer, and bar you from reapplying for 12 months.

New Mexico AIP Coverage

High risk drivers in New Mexico are offered the same suite of auto coverage options as other drivers in the state. But according to the New Mexico Superintendent of Insurance, you may pay more for them. Ideally, you should focus on improving your driving record during this time, so as to be able to return to New Mexico’s voluntary market and its lower premiums.

The table below shows the mandatory coverages that drivers in New Mexico must have. Note that it may be wise to purchase more than the state's minimum required coverages. Talk with your insurance agent about what amounts of coverage is appropriate for your specific financial situation.

Mandatory Coverage

New Mexico Required Min. LimitsNew Mexico AIP Maximum Limits

Bodily Injury (BI)

$25,000 per person / $50,000 per accident$100,000 per person / $300,000 per accident

Property Damage (PD)

$10,000 per accident$50,000 per accident

Your assigned insurer will also offer you optional coverages that you may or may not choose to buy. One of these is Uninsured/Underinsured Motorist Bodily Injury, and Uninsured/Underinsured Motorist Property Damage. Given that New Mexico ranked 4th with the highest uninsured motorist rate, you may want to give Uninsured/Underinsured Motorist coverage some serious consideration. If you choose to reject this coverage, you must do so in writing as part of the application to the New Mexico AIP. And be aware that there is a $250 deductible associated with this coverage.

Last but not least, you may be offered Physical Damage coverage, also known as Collision and Comprehensive. With this coverage, you choose a deductible level – the amount you pay out-of-pocket for a claim before your insurance kicks in – rather than a coverage level. In New Mexico, deductibles may be $100, $200, or $250 – your choice. Your insurance coverage is based on the “actual cash value” – the amount you could sell it for today – of your vehicle, and that amount is capped at $25,000. Also, if your car is an antique (over 25 years old), your assigned insurance company is not legally required to provide Physical Damage coverage. Alternatively, you may want to seek coverage for antique auto insurance.

Optional Coverage

New Mexico AIP Min. LimitsNew Mexico AIP Maximum Limits

Medical Payments Coverage

$1,000 per person / accident$5,000 per person / accident
Physical Damage (Collision and Comprehensive)Actual cash value of your car but no more than $25,000No higher limit
Uninsured Motorist Bodily Injury (UMBI)$25,000 per person / $50,000 per accident$100,000 per person / $300,000 per accident
Uninsured Motorist Property Damage (UMPD)$10,000 per accident$50,000 per accident

New Mexico Motor Vehicle Insurance Plan Premiums and Payments

As mentioned above, premiums for higher-risk drivers in New Mexico are higher than for standard risk drivers and definitely higher than preferred risks. But there is no hard-and-fast rule for determining how much higher. New Mexico auto insurers consider many factors when developing the premium for your policy, and the more you understand about those factors, the more you’ll be able to take actions that will allow you to find cheap auto insurance again.

In New Mexico, you may pay your insurance premiums in a couple of different ways. There is an installment plan, in which you would provide a 40% deposit of the entire annual premium to the insurer when you submit the application. And then about 60 days after you receive your policy, you would receive the first of 5 monthly bills that, together, would pay then entire balance of the premium. The second way to pay is to put 40% of the entire annual premium down with your application, and pay the rest within 30 days of receiving your policy. One advantage of the latter approach is that your auto insurance paid in full, and there is no risk of forgetting to pay this bill.

It’s important to pay on time. In New Mexico, if you don’t pay your auto insurance bill by the due date, your assigned insurer can terminate your coverage with a 10-day notice. And without insurance, you can’t be on the road legally. So stay on top of this.

How to Apply through the New Mexico Motor Vehicle Insurance Plan

Every auto insurer in New Mexico is aware of this Plan, and can help you get an auto insurance quote. For more information about the New Mexico AIP, you may call the Office of the Superintendent of Insurance for New Mexico at 1-855-427-5674. You can also visit the website for the New Mexico AIP.

Also know that, you may still be considered a high risk driver even if you have a clean driving record. For example, if drivers or students are young and relatively inexperienced in driving, insurers may charge drivers higher premiums, or even refuse to cover you. Nevertheless, keep shopping, or check out our guide to cheap student car insurance.


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