Auto Insurance Requirements in New Mexico

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As a resident in the Land of Enchantment, you need more than a vehicle registration to drive legally in the state. New Mexico's Mandatory Financial Responsibility Act demands all drivers to at least carry liability insurance for 25/50/10 for the bodily injuries and property damage one may cause in an accident.

When you register your vehicle, the Motor Vehicle Division (DMV) will use the New Mexico Insurance Identification Database (IIDB) to verify your insurance online. You can also prove your compliance with the laws by presenting your current insurance ID card or a copy of your policy.

New Mexico Required Car Insurance Coverage

NM Required Min. Limits

Bodily Injury (BI)

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

Property Damage (PD)

$10,000 per accident

New Mexico Car Insurance Minimum Requirements

A minimum liability policy in New Mexico includes two coverages: bodily injury and property damage. A liability policy is a contract between you and your insurer that, in exchange for the premiums you pay regularly, your insurer pays for damages to some other party you've hurt in an auto-related accident on your behalf. Your minimum policy in NM will cover you in these amounts:

Bodily Injury (BI): up to at most $25,000 per injured person – and no more than $50,000 in total when there are two or more persons hurt – in an accident you are at-fault for. In the event that the matter is taken to court in NM, your BI will also pay for your lawyer's fees. You can choose to buy the coverage in higher limits, which varies by insurer.

Property Damage (PD): up to at most $10,000 for the other driver’s property damage or loss in an accident you cause. You can also find higher limits with most insurers in New Mexico.

Uninsured & Underinsured Motorist Coverage in New Mexico

In 2012, New Mexico had the 4th highest percentage of uninsured motorist claims out of the total auto insurance claims among the 50 states and D.C. To protect you against accidents with uninsured drivers, the New Mexico Insurance code requires that every licensed insurer in the state include Uninsured Motorist coverage for your own injuries and property loss. The coverage also includes underinsured protection, which pays you whenever the negligent driver’s liability insurance limits are lower than your uninsured motorist coverage, up to the difference between the two limits. However, since neither is actually mandatory for drivers, you may choose to reject one or both kinds of coverage in writing:

Uninsured / Underinsured Bodily Injury (UM/UIMBI): in case the negligent driver has no liability insurance policy (or not enough coverage), and therefore you have no insurer to file a claim with, your insurer will cover your own injuries from the accident. Your coverage can range anywhere between 25/50 (as the BI limits in a minimum policy) and 250/500 or higher, depending on the insurer.

Uninsured / Underinsured Property Damage (UM/UIMPD): similarly, in case an uninsured motorist causes an accident that damages your car or other belongings that are in the car, UM/UIMPD covers you in the negligent driver’s insurance’s place, if he or she had any. Basic limit starts at $10,000 per accident, and higher coverage can be found, varying by insurer. Note that if you do keep your UM/UIMPD, there will be a $250 deductible amount that you must pay on your own out of the total property damage costs before your insurer takes over.

Alternative Proof of Financial Responsibility

Apart from an insurance policy, the MVD will also recognize two other forms of liability insurance as your proof of financial responsibility in New Mexico: a bond or cash deposit. Specifically, these two alternatives are valid if they comply with the following terms:

Surety Bond: you may use a surety bond, issued by a licensed surety company in NM, as your proof. The bond needs to be payable for any judgments against you for an accident you cause in the state, at least in the same amounts as an insurer would under a minimum policy. The main difference between a bond and a regular auto insurance policy is that the surety company will ask you for the money it has paid on your behalf back.

Cash Deposit: you may deposit $60,000 in cash as your liability insurance, by sending money to the New Mexico State Treasurer. The Treasurer, upon receival of your deposit, will also verify whether or not you have previously unsatisfied judgments from past accidents. If everything is in place, he or she will issue you a certificate of cash deposit as your proof. Any claims other people make against you would be paid out of this cash balance.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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