New Mexico requires insurance companies to offer their clients uninsured/underinsured motorist insurance, also known as “UM/UIM” coverage. This insurance kicks in and will cover damages caused when someone else is at fault who, for whatever reason, doesn’t carry sufficient liability insurance.
Based on a 2021 study from the Insurance Information Institute, an estimated 21.8% of drivers in New Mexico are uninsured.
In other words, if you get into a car accident in New Mexico, you have a one in five chance of encountering an uninsured driver.
Every motorist in New Mexico must carry liability insurance, which pays out claims when the driver injures other people.
Unfortunately, even though liability insurance is required, far too many motorists in Mexico refuse to carry it.
This is in direct violation of New Mexico law.
Key Takeaways
New Mexico requires that all drivers carry bodily injury and property damage liability. Currently, at a minimum, drivers must have a 25/50/10 policy.
Broken down, this comes out to:
However, minimum liability coverage only pays for damages you cause to someone else. It does not include damages or financial loss to yourself or your vehicle.
Being injured in a crash is stressful enough, but discovering the at-fault driver has little or no insurance can make the situation even more frustrating. Many accident victims are left wondering how their medical bills, vehicle damage, and lost income will be covered.
Uninsured and underinsured motorist coverage exists to help protect you in these situations, but understanding how these policies apply under New Mexico law can be confusing.
Because so many drivers in New Mexico are uninsured, insurance companies must offer policyholders New Mexico minimum uninsured motorist coverage along with minimum liability insurance.
This policy should include at least $25,000 for bodily injury per person (up to $50,000 per accident). They must also offer $10,000 in uninsured motorist property damage insurance per accident.
Essentially, after an accident, if the at-fault driver lacks liability coverage, your own UM/UIM coverage would kick in.
You can also stack insurance UM policies in New Mexico. This allows a policyholder to combine the policy’s limits for each vehicle.
For example, suppose you pay premiums on four cars under the same insurance policy and carry $25,000 UM/UIM on each of your four vehicles.
When you are involved in a car accident, you will have access to $100,000. In mathematical terms, four vehicles times $25,000 each equals $100,000 in total coverage.
As of late 2021, insurance companies must also adequately disclose the limitations of minimum uninsured motorist coverage New Mexico companies offer.
Otherwise, they cannot charge policyholders a premium for it.
You can also opt out of UM/UIM premiums by letting your insurance company know in writing that you don’t want coverage.
Uninsured/Underinsured Motorist insurance will protect you in three situations:
UM/UIM coverage has several policy limits—a property damage policy limit, which will pay for damage to your property, and a bodily injury limit that pays for medical care, lost wages, emotional distress, and pain and suffering.
According to New Mexico statute 66-5-301, all insurance companies must offer UM/UIM insurance to their insureds in connection with any liability insurance they offer. Another statute requires the following minimums:
Helpfully, New Mexico motorists can purchase a policy with a higher limit. Because there are so many uninsured motorists on the road, careful drivers should obtain as much UM/UIM insurance as fits realistically within their budgets.
Car crashes in New Mexico can be costly.
Luckily, as part of your insurance policy, UM/UIM insurance kicks in after you are in an accident with another at-fault driver who is either underinsured or lacks liability insurance.
Depending on your policy limit, UM/UIM insurance can make up the difference between your policy and the at-fault driver’s lack of insurance by covering the following:
For example, suppose you are injured in a car crash and accrue $100,000 in medical bills, but the other driver only carries a $40,000 policy.
Your UM/UMI insurance will cover the difference if you have enough coverage.
In this case, the at-fault driver’s insurance company will pay you $40,000, leaving you responsible for the remaining $60,000. But suppose you carry a UM/UIM policy for $100,000.
In that case, your own UM/UIM auto insurance would cover the remaining $60,000. You might even have enough left over to pay for some or all of any lost wages.
Many drivers carry uninsured/underinsured motorist (UM/UIM) coverage without fully understanding how it works. After an accident, insurance companies may dispute whether coverage applies or how much compensation is available.
Getting clear information about your rights under New Mexico insurance law can help you avoid delays and protect the full value of your claim.
There is a simple reason why you should buy as much UM/UIM coverage as possible. UM/UIM coverage is considered reduction coverage. When a driver has no liability coverage, there is no reduction to the UM/UIM policy. Instead, the UM/UIM insurer pays all damages (subject to the policy limit). For example, if you have a $50,000 UM/UIM policy and are the victim of a hit and run, then your entire $50,000 is available to pay your damages.
However, if the driver who caused the accident carries liability insurance, then your UM/UIM insurance is reduced by that amount. Consider the following:
The state’s minimum liability insurance is $25,000, so only having $25,000 in UM/UIM coverage will help only if the other driver is completely uninsured. If you want more than $25,000 available after a crash, you should buy UM/UIM coverage with a higher policy limit. Given the high costs of medical care, $25,000 can get eaten up very quickly. Having surgery to set a broken bone or spending a couple nights in the hospital can quickly deplete $25,000 in benefits. However, if you buy $100,000 in UM/UIM coverage, then you will have extra funds available in the event of a devastating crash.
Although insurers must offer you this coverage, motorists can still reject it. Unfortunately, hoping to save money, far too many do. They are left without adequate protection when struck by an uninsured or underinsured driver. New Mexico recognizes how important UM/UIM coverage is and therefore makes it difficult for insurance companies to let insureds reject UM/UIM coverage.
First, any rejection must be in writing. It should also be attached to the insurance policy sent to the insured. Also, the insurance company must give the insured information about how much UM/UIM insurance costs. If the insurance policy does not contain this information, then there has been no rejection, and the insurance company must provide UM/UIM coverage.
Second, insurance companies are required to offer insureds a policy amount in UM/UIM coverage that is equal to their liability policy. For example, if an insured buys $75,000 in liability insurance, then the insurance company must offer $75,000 in UM/UIM coverage.
Stacking is a helpful way of increasing the amount of coverage available and is allowed in New Mexico. It works like this: suppose you are paying premiums for a $25,000 UM/UIM policy for two vehicles. In the event of an accident, you can stack the UM/UIM limits for both of these vehicles, which will make a total of $50,000 available to you. If you are paying premiums for three vehicles on the policy, then $75,000 becomes available. Stacking can dramatically help an injured motorist by increasing the amount of coverage they can access.
All of the named insureds in the policy can stack. Stacking is also available to others if they are related to you. For example, in New Mexico, your spouse and any relatives living in your household can stack all of the UM/UIM policies you purchase in which you are the named insured.
New Mexico’s stacking rules are complex and cannot all be adequately summarized here. After a collision, you should meet with an experienced New Mexico car accident lawyer who can advise you about what insurance policies you can use to cover your losses.
Claims involving uninsured or underinsured drivers can quickly become complicated. Coverage limits, policy language, and insurance company interpretations may all affect how much compensation you are able to recover after an accident.
At Tawney, Acosta & Chaparro P.C., we help injury victims understand how New Mexico UM/UIM laws apply to their situation. Our team reviews insurance policies, investigates the crash, and works to ensure clients pursue every available source of compensation.
If you were injured by an uninsured or underinsured driver, you don’t have to navigate the insurance process alone.
See what our clients have to say about working with our legal team
If you’ve been in a car accident in New Mexico and are unsure if you carry UM/UIM coverage or how much you carry, Tawney, Acosta & Chaparro P.C. can help.
Our experienced car accident team dedicates itself to earning meaningful results for our clients.
When you put your trust in us, we promise to deal with your insurance agent and work to ensure you receive a just settlement.
We aren’t afraid to fight for you, even if it means taking your case to court.
Call us today at (575) 222-1000 for a free consultation with a skilled car accident attorney.
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James Tawney is a dedicated advocate for injury victims throughout the Southwest. Born and raised in Arizona, he graduated summa cum laude from Northern Arizona University before earning his law degree from Texas Tech University School of Law. In 2016, James co-founded Tawney, Acosta & Chaparro P.C., where he continues to focus on protecting the rights of individuals and families harmed by negligence.
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