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New Mexico

It is mandatory for drivers in New Mexico to have auto insurance before going on the road. Car insurance plays a vital role in the aftermath of any incidence that could happen while on the road. In New Mexico, car owners are required to purchase minimum amounts of liability coverage. The state is considered as a traditional tort country, meaning that if one is involved in an accident where another driver was liable, the responsible driver's insurance company will compensate the affected for the losses incurred in full.

New Mexico law requires drivers to keep financial responsibility in the form of insurance coverage. The car owners or the insured are however needed to master all the rules and regulations of insurance to avoid making any mistakes and getting in trouble with the law.

The auto insurance coverage in New Mexico should offer the following coverage;

  • Uninsured and under-insured coverage - if an insured motorist is involved in an accident caused by an uninsured or under-insured driver, the policy ensures that the victim is compensated for the losses.
  • Collision and comprehensive coverage – this insurance policy pays for the damages incurred due to an accident caused by another car, object or in the case of a rollover. Although this policy is not mandatory by the law, it is advisable for motorists to have it for financial security. It also protects car owners from damages caused by fire, wind, hail, and flood or in case of vehicle theft or vandalism.
  • Medical payment policy – the coverage is optional, and it is meant for paying for any medical expenses that the car owner and the passengers incur due to injuries suffered in a car accident regardless of who was at fault.
  • Property damage – this coverage compensates for any property damages caused to other individuals as a result of an auto accident.


The insured must provide proof of insurance and can only do so by offering any of these documents;

  • An insurance ID card
  • A letter from the insurer
  • A copy of the insurance policy

These documents are meant to prove that the insured has maintained financial responsibility upon request by a law enforcement officer or if required by the New Mexico MVD.

The tort-based system means that it follows a 'fault-based plan' when it comes to insurance and financial responsibility. Thus, in the case of accidents, there has to be a person at fault or responsible for the harm. The responsible driver's insurance company will pay for these losses up to the policy limits. The victims can proceed in any of these ways to get compensated;

  • File a claim with his/her insurance company to be compensated and later on let the insurance company turn around and seek subrogation claim against the driver at fault.
  • Directly file a third-party claim with the insurance company of the liable driver.
  • File for a lawsuit on personal injury at the court against the liable driver

How much insurance should the New Mexican carry?

The liability insurance policy is mandatory in New Mexico. The required amounts of each of these covers are:

$25,000 for bodily injury – this amount pays for any medical expenses incurred by the affected. It also pays for funeral bills and other compensations in the event of death.

$50,000 for total bodily injury and deaths resulting from an accident caused by the insured car's driver or owner.

$10,000 for property damage coverage which pays for the damages arising from an accident caused by the insured vehicle's driver or owner.

What if a driver does not have auto insurance?

The law of New Mexico requires that any vehicle that does not have liability insurance be suspended from registration. According to New Mexico's Mandatory Financial Responsibility Act, the owner of the car should turn the car's license plates and registration number to MVD within ten days after receiving a notice of suspension. Failure to do this could result in fines and penalties.