New Mexico Auto Insurance Laws

October 19th, 2018 | by RON BELL

New Mexico Auto Insurance Laws
Virtually non-existent a hundred years ago, liability insurance for motorists is now compulsory in all 50 states. In this article, we review laws governing car insurance policies in the state of New Mexico.


Even though we now view obligatory car insurance as a simple fact of life, that hasn’t always been the case. Car insurance policies came into existence with the rise of popularity and the proliferation of automobiles in the late 19th and the early 20th century. More cars on the roads inevitably led to more accidents and it would frequently turn out that the at-fault driver didn’t have means to compensate the other driver for the resulting damage. The first state to address this issue and introduce compulsory insurance laws was Massachusetts in 1925. However, it remained the only state where obtaining liability insurance was a prerequisite for car registration until 1956 when a similar law was adopted in New York.

Today, all 50 states require drivers to purchase some form of insurance coverage for bodily injury and property damage. New Mexico is, of course, no exception to this rule. Let’s review the laws governing different types and amounts of auto insurance policies in our state.

Minimum Liability Limits

In New Mexico, the minimum liability limits required by the law are as follows:

  • $25,000 for injury or death of one person
  • $50,000 for total injury or death if multiple people are hurt in the accident.
  • $10,000 for property damage.

In New Mexico, a person who is proven to be the at-fault party in the accident is financially responsible for any resulting harm and damage. Liability coverage for bodily injury or death means that the at-fault driver insurance will cover the costs related to the physical harm and injuries sustained by the victims. Such costs may include medical bills, damages for experienced pain and suffering, lost wages and other kinds of expenses. Property damage pays for the cost of repairs to the other driver’s car and any other personal property that was damaged as a result of the accident.

It is important to note, however, that these are only the minimum liability limits required by the law. Since the costs related to injuries and damage experienced by victims in a car accident can quickly surpass these limits, drivers may choose – and are often encouraged – to buy an insurance policy with much higher liability limits.

Uninsured/Underinsured Motorist Coverage

This kind of insurance policy is obligatory in New Mexico, a driver can opt out of it by formally turning it down in writing. Nevertheless, many drivers choose to buy it because of the financial protection it offers. Uninsured and underinsured motorist coverage can provide additional funds if the costs related to bodily harm or property damage exceed the at-fault driver’s policy limits or if the at-fault driver doesn’t have a valid insurance.

Other Types of Car Insurance

Other types of coverage offered by insurance companies in New Mexico that are optional rather than compulsory include:

  • Collision – if your car is damaged in a collision that is your fault, collision coverage can help pay the costs of repairs or replacement of your car
  • Comprehensive – this kind of coverage can help pay the costs of repairs or replacement of your car if it is damaged due to circumstances other than collision such as theft, fire, vandalism, etc.
  • Medical – helps pay the bill for medical treatment of injuries that you may sustain in a car accident

Driving a car without an auto liability insurance policy in New Mexico can result in criminal penalties. In addition, it is simply irresponsible and may jeopardize a driver’s financial security if they cause an accident and are required to pay the damages out of their own pockets. If you’ve been injured in a car wreck that wasn’t your fault, it’s important that your contact an Albuquerque, NM car accident attorney as soon as possible.

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