Uninsured Motorist Coverage in New Mexico: Do You Need It?
Every car insurance policy in New Mexico is required to offer uninsured motorist coverage, but drivers have the right to refuse it.
Written by Mary Alice Morris
Reviewed by Kathleen Flear
You’re not legally required to purchase uninsured motorist coverage in New Mexico, but because nearly 22% of the state’s drivers are uninsured, going without it isn’t a great idea.
New Mexico ranks fourth in the nation for its rate of uninsured drivers, according to the
Insurance Information Institute (III)
, and yet, stunningly, you don’t have to include uninsured motorist coverage in your car’s policy. Even more surprising, those who have underinsured motorist coverage might not even see a payout when an at-fault driver’s coverage doesn’t pay their expenses!To help you navigate through New Mexico’s unusual uninsured motorist insurance laws,
Jerry
, the car insurance
comparison shopping super app, is here with a handy guide on the matter. We’ll explain what uninsured motorist coverage is, how much it generally costs, and how you can save on your New Mexico insurance costs
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Do you need uninsured motorist coverage in New Mexico?
Uninsured motorist coverage
isn’t required in New Mexico, but that doesn’t mean you should skip it. It’s required by law to be offered as part of every car insurance policy sold in the Land of Enchantment, but the buyer has every right to refuse it. That said, the coverage is so cheap and the uninsured driver rates in New Mexico are so high that turning it down might not be a great idea. In New Mexico, most uninsured motorist insurance policies cost just $50 to $75 per year. That’s why it’s good to consider adding it to the
liability coverage
already required in the state. State-required minimum insurance coverage in New Mexico includes $25,000 of
bodily injury liability
per person, $50,000 of bodily injury liability per accident, and $10,000 of property damage liability
. With tens of thousands of dollars in required liability coverage, why would anyone need uninsured motorist coverage? Because liability insurance only pays for damages caused to other people and their property when you are the one at fault. It does nothing to protect you or your vehicle, even if you’re struck in a hit-and-run or in an accident with an uninsured driver.
How uninsured motorist insurance works in New Mexico
The idea behind uninsured motorist coverage is that it should pay for medical expenses and losses that you or your passengers incur in certain types of collisions—those with uninsured or underinsured motorists and hit-and-runs.
However, as the
Albuquerque Journal reported
in 2021, there’s a glaring lapse in what this coverage can do for you. While uninsured motorist coverage is a valuable benefit worth the modest expense, underinsured motorist coverage in New Mexico has a bizarre loophole that allows insurance companies to deny payment when you might expect coverage. That’s because under New Mexico law if you suffer damages, you’re only entitled to the maximum amount of underinsured motorist coverage that you purchased.
That means that if you buy $50,000 of underinsured motorist coverage but you suffer medical expenses of $100,000 that the other party’s insurance can’t cover, you’re only entitled to up to $50,000 total in coverage. But it’s even worse than you might think.
Let’s say you suffered $100,000 worth of medical bills from injuries in an accident with a driver who only has $25,000 in liability coverage. That $25,000 only covers 25% of your medical expenses. That’s when you’d expect your underinsured motorist coverage to kick in, right?
Well, it will—to a very limited extent. Because in this theoretical scenario, you only purchased $50,000 of uninsured motorist coverage, you’re only entitled to $50,000 total dollars of coverage, meaning your underinsured policy will only pay out another $25,000 rather than the $75,000 you need for your medical bills.
Basically, in New Mexico, underinsured motorist coverage takes into account any insurance benefits you receive from another party’s liability coverage, and then subtracts that amount from the coverage you purchased! While it sounds like an underinsured motorist policy would pay for expenses above and beyond the at-fault party’s coverage limits, it’s just not how it works.
What’s available
In New Mexico, uninsured and underinsured motorist coverage is lumped together, and every car insurance provider must offer the minimum coverage amount of $25,000 in bodily injury per person, $50,000 in bodily injury per accident, and $10,000 in property damage per accident.
It’s also important to know that this coverage can be stacked. That means if you own three vehicles and have the minimum uninsured/underinsured coverage amounts per vehicle, you can apply all three coverage benefits if needed after an accident. Basically, you could get up to $75,000 in total bodily injury benefits for yourself if you’re struck by an uninsured driver in just one of your covered cars.
What it covers
Uninsured motorist coverage can be a tremendous help if you ever have the misfortune of needing it. In New Mexico, this kind of insurance can pay for medical expenses and property damages, but that’s not all. It can also be applied to expenses incurred from your injury like continued medical needs, pain and suffering, and lost wages.
How to make a claim
Any time you’re in a collision, you need to exchange your contact information, address, and insurance policy information with the other parties involved. You should also report the accident immediately to law enforcement. This will not only help sort out who is at fault, but it will provide documentation for the insurance companies involved.
Having proper documentation and information will allow you to file a claim with the other party’s liability coverage provider. However, if you’re the victim of a hit-and-run collision, or the at-fault party in your accident doesn’t have sufficient (or any) insurance coverage, then you’ll need to contact your own insurance provider about filing an uninsured/underinsured motorist claim.
Why it’s a good idea to buy uninsured motorist insurance in New Mexico
Despite the shortcomings of underinsured motorist coverage in New Mexico, it’s still totally worth getting because it’s part of a package deal with uninsured motorist coverage, you can stack your policies, and it’s unbelievably cheap. Here are a few more reasons you should opt in for this coverage.
High rate of injury crashes in New Mexico
Just 1% of car accidents in New Mexico result in a fatality, but a whopping 30% result in injury! That’s according to data from the
University of New Mexico 2020 Traffic Crash Report
, which goes into the state’s collision data in exhaustive detail.With that many injury-involved collisions, you’ll want to have coverage to help pay for your medical bills and other expenses if you’re hurt in an accident with someone who doesn’t have enough—or any—insurance coverage.
New Mexico’s frequency of hit-and-runs
An astonishing 18% of New Mexico’s collisions are
hit-and-run accidents
. That means if you’re in a collision, you have a nearly one in five chance of it being a hit-and-run! This is likely due in part to the state’s uninsured driver rate.If you’re in a collision with someone who flees the scene, you’ll want coverage that will protect you and your car. The medical and repair costs can add up quickly, and having even the minimum amount of uninsured motorist coverage that’s offered will be a big help.
How to save on uninsured motorist coverage in New Mexico
Although the uninsured/underinsured motorist coverage that’s offered with every New Mexico car insurance policy is pretty cheap, we understand that every expense adds up. For the budget-conscious driver, it can be a temptation to skip any coverage that’s not legally required in order to balance the budget a little better.
But if you get your car insurance through
Jerry
, the trustworthy licensed broker app
, you won’t have to choose between coverage and savings. You can get the best of both worlds because Jerry will comparison shop for you and narrow down the best-priced policies to perfectly fit your needs. Jerry does this by scouring its network of 55+ top-rated insurance providers for the best deals, and it only takes a few minutes! You won’t have to fill out any paperwork, talk to any salespeople, or deal with any unwanted phone calls.
You can shop and switch over right in the app, and Jerry can even help you cancel your old insurance! And best of all, the average Jerry user saves $800+ a year on car insurance!
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