Auto Insurance Requirements in New Mexico

Auto Insurance Requirements in New Mexico

Find Cheap Auto Insurance Quotes in Your Area

Currently insured?

In New Mexico, you need more than a driver's license and vehicle registration to drive — you also need a valid car insurance policy, according to New Mexico's financial responsibility law.

The policy must carry at least the minimum limits: $25,000 for bodily injury liability per person and $50,000 per accident, along with $10,000 for property damage. When you register your vehicle, the department of motor vehicles will use the New Mexico Insurance Identification Database (IIDB) to verify your insurance online. You can also prove coverage by presenting your current insurance ID card or a copy of your policy. Here's what to know.

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. In exchange for the premiums you pay regularly, your insurer pledges to cover related expenses if you're at fault in an accident. Your minimum policy in NM will cover you in these amounts:

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

Bodily injury (BI): You must carry at least $25,000 in bodily injury liability coverage per person and $50,000 per accident. If the matter is taken to court in New Mexico, 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): Your policy must include at least $10,000 for property damage resulting from a car accident — and like BI, you can find higher limits with most insurers in New Mexico.

Uninsured and underinsured motorist coverage in New Mexico

In 2012, New Mexico had the fourth-highest percentage of uninsured motorist claims across the U.S. 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 covers expenses if the negligent driver's liability insurance limits are lower than your own, 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): If you're hit by an uninsured driver, uninsured/underinsured coverage will pay for your medical bills. Your coverage must match your BI limits, which start at 25/50 and may go higher depending on the insurer. The coverage also kicks in if you're hit by an "underinsured" driver, which means their BI limits are lower than yours.

Uninsured/underinsured property damage (UM/UIMPD): If the uninsured or underinsured driver damages your car, this coverage pays for any car repairs. The basic limit starts at $10,000 per accident, though some insurance companies allow you to raise coverage. Before the insurance kicks in, though, you'll need to pay a deductible of at least $250.

Alternative proof of financial responsibility

Apart from an insurance policy, the state 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 New Mexico, as your proof of coverage. 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 seek payment from you if it must pay on your behalf.

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 you have previously unsatisfied judgments from past accidents. If everything is in place, they 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.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.