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New Mexico Car Insurance Laws

Finding affordable car insurance can be hard, but this coverage is one of the most important decisions a driver will make. A good auto insurance policy can protect a driver from losing everything that he or she owns, as well as protect his or her family from being overwhelmed by medical bills and other financial consequences of a car accident. Our FREE car insurance comparison tool can keep you protected at low rates when you enter your ZIP code!

What is Minimum Coverage?

The state of New Mexico requires all drivers to have a valid license not suspended and a car insurance policy whenever they operate a motor vehicle on public roads. As many know, however, there are a lot of choices in what is available in the auto insurance market. The cost of these different policies can vary greatly.

In general, however, car insurance policies that meet only the state’s minimum requirements are the cheapest policies available on the market.

For many young people and people who are trying to restrict spending in their budgets, this minimum coverage is a good way to know that they are protected in the event of an accident and still save money every year with car insurance quotes.

Minimum Coverage Laws

Few people realize that the state of New Mexico is one of only a few states that has set minimum standards for the total amount of coverage a driver has to carry in his or her auto insurance policy.

According to state law, a driver’s policy has to include liability coverage that provides coverage for at least $25,000 for personal injury and medical expenses for an accident or incident in which only a single person is injured.

The policy must also provide $50,000 for an incident or auto accident that injures more than a single person. Finally, the policy must also provide $10,000 per accident to cover any property damage.

In summary, a driver is required to have a policy that provides the following coverage:

  • Up to $25,000 payout for an accident where one person is injured
  • Up to $50,000 payout for an accident where more than one person is injured
  • Up to $10,000 payout for property damage

It should be noted that these minimum limits only apply to the other people injured in an accident. There is no minimum coverage amount or even a coverage requirement for the driver of the vehicle. In other words, the minimum insurance will not provide any funds for medical bills or property damage to the driver. A driver is on his or her own to pay for the medical bills and damage to his or her car after an accident unless he or she has additional coverage.

These insurance requirements are not meant to protect a driver, but rather to protect the people he or she injures in an accident. By requiring every driver to carry this minimum coverage, the state of New Mexico is able to assure all drivers that is they are involved in an accident that is not their fault, the at fault driver will have some means of paying for some or all of the costs.

Am I Allowed to Self Insure?

Because the insurance requirements are meant to assure other drivers that funds are available to take care of them, drivers in New Mexico have the option to self-insure. Self-insuring means that a driver is able to pay for any expenses that are incurred by accident victims out of his or her own pocket.

In New Mexico, a driver is allowed to self-insure if he or she can prove that he or she is capable of covering the expenses of an accident. Specifically, a driver must prove that he or she has at least $60,000 in cash readily available.

People who are interested in self-insuring need to know that by law they are responsible for providing proof that they meet this $60,000 requirement to the state.

It should be noted that this cash must be readily available, it cannot be held in stocks, private bonds, real estate, or as part of a pension or other retirement plan. Residents of New Mexico who meet the requirement and want to self-insure can obtain a financial responsibility certificate from the state’s Department of Motor Vehicles.

What Happens if I Don’t Have Insurance?

The state of New Mexico has very strict rules regarding people who do not comply with the state’s auto insurance laws. All drivers are required to carry proof of their auto insurance policy at all times in their vehicle. Keep your auto insurance costs low by entering your ZIP code into our FREE car insurance comparison tool.

Upon request, a driver must show this proof to a police officer. If a driver is unable to produce his or her proof of insurance, the potential penalties are a fine, loss of the car’s registration, loss of the driver’s license, and/or jail time. The penalties for violating these car insurance laws are always avoidable by staying insured with our FREE car insurance tool with your ZIP code. Now that you know about what New Mexico expects from its drivers, you can stay insured past the minimum coverage and feel safe on the road!

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