For the majority of Americans, a house is your biggest source of equity—and you’ll want financial protection in case the unthinkable happens to your precious investment. The cost to repair damages from a burglary, hailstorm, or fire can add up quickly.

Make sure you understand exactly what your homeowners insurance policy covers (and what it doesn’t) before signing your contract. Here to walk you through everything you need to know about New Mexico homeowners insurance is the

car

and

home insurance

broker,

Jerry

What is homeowners insurance?

Homeowners insurance offers financial protection for your house and the property therein in the case of damage, loss, or personal liability.

The average cost of homeowners insurance in the US is $1,387 per year, which comes out to around $115 per month.

Basic components of homeowners insurance

There are five basic coverages included in a standard homeowners policy:

Coverage A (Structure): Covers the cost to repair or replace the actual house

Coverage B (Additional structures): Covers repair or replacement costs for property outside the house, like a detached garage or shed

Coverage C (Personal property): Covers repair or replacement costs for personal belongings including furniture, electronics, jewelry, and clothing

Coverage D (Additional expenses): If your home becomes uninhabitable after an incident, this coverage will pay for alternative living arrangements like a hotel. Also called “loss of use” coverage

Coverage E (Personal liability): If someone is injured at your home, this covers the cost of litigation and obligatory payments

You can choose either an actual cash value (ACV) or replacement cost policy. In an ACV policy, you’ll be entitled only to the current value of your lost or damaged items. In a replacement cost policy, you’ll receive the full amount needed to purchase a comparable new item.

Keep in mind that many (if not most) insurance companies will require you to purchase a policy that covers at least 80% of the replacement cost of items.

MORE: Home insurance terms you need to know

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Named perils

Every home insurance policy will vary slightly when it comes to what’s covered, but in general, you can expect a policy to cover some common perils. Here’s an example list of named perils:

Fire

Lightning

Wind

Hail

Hurricanes

Damage caused by vehicles

Theft

Vandalism

Riots

Falling objects

Explosions

Only situations explicitly listed as named perils will be covered by your insurance—in other words, anything not on your policy’s list will not be covered. Make sure you review your policy carefully so you aren’t surprised when a non-covered incident occurs.

Is homeowners insurance required in New Mexico?

No law requires New Mexico homeowners to purchase home insurance. That said, your bank or mortgage lender will often require you to carry some amount of homeowners insurance.

Even if you don’t have a mortgage anymore, it’s a good idea to have home insurance coverage at all times. If you shudder at the thought of paying to replace everything you own after a fire, a homeowners policy is for you.

How to get homeowners insurance

Whether it’s your first or twelfth time buying home insurance, you’ll want to start by comparing quotes from multiple providers (

Jerry

can help!). This can help you make sure you get the coverage you need without overpaying.

Don’t just sign on to the first policy you find. Chances are, you can find a lower rate. Don’t forget to get a quote from your

car insurance

carrier, as well—this number may not be the lowest, but you can unlock a great discount by bundling home and auto insurance together.

Recommended home insurance coverage in New Mexico

Some of the biggest statistical threats facing New Mexico homeowners are flooding from water backups, theft and vandalism, wildfires, and earthquakes. Theft and fire damage are usually included in a standard homeowners policy.

Consider the following to protect your home against flood damage:

Water backup coverage can give extra protection in the case of an overflowing sump pump or burst pipe

This protection may also come in the form of specific sump pump coverage

Get an HO-5 or open perils policy that covers all perils except for named exclusions. This option is usually more expensive

You can purchase supplemental earthquake insurance from your home insurance provider, a government entity like the California Earthquake Authority, or another private company.

You may also want to consider purchasing yard and garden insurance in New Mexico. This coverage can help you pay to re-landscape your yard after a covered peril destroys your shrubbery, trees, etc.

MORE:

Does home insurance cover engagement rings?

What affects home insurance prices in New Mexico?

A typical homeowners policy in New Mexico can cost anywhere from $1,017 to $2,024 (or more), depending on your demographics, house specifications, and desired coverage level.

Be aware that your personal circumstances play a role in your insurance rates. Insurers will look at factors including marital status, credit history, and history of filed claims to assess your financial stability and risk as a policyholder.

That said, some things cause rates to be higher for all policyholders in New Mexico.

Wildfires

New Mexico, along with the rest of the western United States, continues to experience higher than usual rates of wildfires. This elevated risk can make the price of insurance coverage increase, especially for policies that include fires and wildfires in their list of covered perils.

Theft

New Mexico’s crime rates sit significantly above the national average. The more likely your items are to be stolen, the more likely you are to file an insurance claim, so each new policyholder in a high-crime area represents a big potential loss to insurers.

Keep in mind that safer zip codes may enjoy lower rates than neighboring areas with higher rates of burglary and vandalism.

Homeowners insurance discounts in New Mexico

No matter who you are and what part of New Mexico you inhabit, you’ll be able to take advantage of various discounts offered by most insurance companies. Examples include:

Discount	How to get it
Bundling	Bundling home and auto insurance could earn you a steep discount on both policies.
First-time homeowner	Most companies will offer you a discounted policy if it’s your first time purchasing a home.
Claims-free	If you maintain a certain period (typically a few years) without any claims on your policy, you may be eligible for a discounted rate.
Storm proofing	Installing various hurricane safety measures, such as an upgraded roof or storm shutters, could earn you a discount on your homeowners policy.
Security system	If you’ve got a security system to prevent theft, your insurance company might discount your homeowners insurance rate.
Upgraded fire alarm	Set up your fire alarm to contact the fire department directly—your insurance company may give you a discount for a shorter fire response time.

Save money on home and auto insurance

Looking for insurance quotes can be frustrating and time-consuming, but you don’t have to choose between saving time and saving money with

Jerry

A licensed broker that offers end-to-end support, Jerry can help you browse competitive quotes, sign up for a new policy, and even cancel an old one.

If you have any questions during your

insurance shopping

or signing process, Jerry’s team of friendly and knowledgeable agents is only a phone call or text away!

“
Jerry
was wonderful! I used it for my auto and renters policies. I trusted it so much that I signed up my homeowners insurance under Jerry as well. All of the agents are amazingly nice and knowledgeable.” —Mary Y.

What is the average cost of homeowners insurance in New Mexico?

The average cost of home insurance in the Cactus State ranges between approximately $1,100 and $2,000. This may put the cost of your homeowners insurance above the national average of $1,387 per year.

Is homeowners insurance required in New Mexico?

No, home insurance is not required by law in New Mexico, but your mortgage lender can require you to carry a policy for the duration of the mortgage as a condition of your contract.

Even if home insurance isn’t required, it’s always a good idea to have it.

Save an average of 18% by bundling your home and auto insurance

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