New Mexico Car Insurance Laws: How Much Coverage Do I Need?

In New Mexico, all drivers must carry $25,000 per person/$50,000 per accident in bodily injury liability coverage and $10,000 per accident in property damage liability protection.
Written by Kianna Walpole
Edited by R.E. Fulton
New Mexico
drivers need at least the state minimum liability
car insurance
, which follows the 25/50/10 rule. Residents can opt out of
uninsured motorist coverage
, but are required to reject it in writing.

Auto insurance coverage requirements in New Mexico

All drivers in New Mexico must carry
liability insurance
. Here are the specific amounts you’ll need in order to comply with New Mexico auto insurance laws: 
$25,000 per person in
bodily injury liability
$50,000 per accident in bodily injury liability coverage
$10,000 per accident in
property damage liability
When setting up a car insurance policy, you’ll get at least this minimum coverage, but you can add more. 
For instance, New Mexico insurance companies are required to also offer uninsured/underinsured motorist coverage (UM/UIM). If you opt in, you must get at least $10,000 per accident in UM/UIM insurance. If you choose to decline UM/UIM, you must do so in writing. 
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Using the profile of a middle-aged driver with a
clean driving record
in Albuquerque, here’s a look at the difference in New Mexico car insurance costs between a state minimum policy with and without UM coverage.  
While the policy cost is slightly cheaper without UM/UIM, the added benefits of UM/UIM on your car insurance may be worth the added cost.
Along with the state minimum car insurance, drivers in New Mexico must also carry
proof of insurance
. As of 2023, New Mexico is the only state where law enforcement officers are not required to accept digital proof of insurance—so be sure to keep a physical insurance card in your car along with the digital card you’ll find in the Jerry app. 

Is minimum car insurance coverage the most cost effective option?

Although the minimum coverage is the more cost-effective choice on a monthly basis, it might actually end up costing you more in the future. 
As an at-fault state, New Mexico drivers can be sued if they’re the at-fault party—and if your liability insurance doesn’t cover the cost of the injuries or damages you caused, in a serious accident, the cost would come out of your assets, and your future income.
That’s why it’s always a good idea to consider increasing your coverage limits beyond the required minimum.

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A general rule that I recommend is to carry enough coverage to protect your current and future assets – at least $100,000/$300,000 of liability coverage is recommended, but you may need more coverage depending on your financial situation.
In addition to raising your liability limits, you may need a
full coverage policy
comprehensive coverage
collision coverage
. Generally, when you lease or finance a vehicle, full coverage is mandatory, but if you own your vehicle, you have the flexibility to choose your limits and coverage options. Keep in mind: A full coverage option will protect your vehicle after a car accident, whereas the state minimum will only cover damages and medical expenses for the other party, leaving you to pay for your fees on your own.
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Using the
app, you can adjust your coverage limits and add-on options at any time. 
Once you create your profile, enable full coverage and see how your rates are impacted with and without add-on features and higher limits.
Currently, the average cost of a state minimum car insurance policy in New Mexico is $1,710 per year, or $142 per month. For a full coverage policy, New Mexico drivers pay, on average, $1,951 annually, or $162 per month. 
These averages can give you an idea of what you can expect to pay for coverage, but it's important to remember that many factors go into determining the actual cost of coverage for any given driver.
To find the best price on car insurance for your driver needs and profile, it’s always wise to comparison shop. Not only are you able to see real insurance quotes from different insurance providers, but you’ll also be aware of how your insurance rates change based on the coverage you select.
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Additional coverage options in New Mexico

In New Mexico, you are required to carry liability insurance, but you may find it worthwhile to expand your coverage and include add-on insurance options to your policy:
Medical payments (MedPay)
: Similar to personal injury protection (PIP), MedPay covers your medical bills after an accident—however, it does not cover lost wages.
Accident forgiveness
: Some providers offer accident forgiveness as an add-on feature. With this option, your first chargeable accident is ‘forgiven’ and your insurance premiums won’t increase.
Rental reimbursement
: This coverage option will help pay for a rental car (up to your policy limits) while your vehicle is being repaired after an accident.
Gap insurance
: Sometimes known as loan/lease payoff, gap insurance covers the difference between your vehicle’s actual market value and the amount you owe on your
car loan
or lease in the event of a total loss.
With add-on options, you can build a more robust and sound car insurance policy that will protect you and your assets in a variety of situations—and ultimately, help you save long term. 

Penalties for driving without insurance in New Mexico

According to New Mexico law,
driving without insurance
is a misdemeanor that comes with severe fines and charges. 
Driving privileges
Driving without insurance
Up to $300
Up to 90 days
Registration suspension or license plate removal
Failure to surrender license plates and registration
Up to $1,000
Up to 6 months
Registration suspension
If you can provide proof of insurance to the MVD within 15 days of your citation, you can potentially have the registration reinstatement fee waived. 
If you are in an accident and caught driving without insurance, you have 30 days to find car insurance and have your provider contact the MVD, or else you will face the above penalties.
When drivers purchase at least the state minimum car insurance, they are required to provide their insurance information to the New Mexico IIDB. If you or your insurance provider do not provide the proper information within 30 days of receiving a Notice of Noncompliance, your vehicle registration will be suspended.


Does auto insurance follow the car or the driver in New Mexico?

In New Mexico, auto insurance policies follow the vehicle—meaning that if you borrow someone else’s car, you will still be covered in an accident under their liability coverage.

How much is car insurance in New Mexico?

On average, drivers pay around $1,710 per year, or $142 per month for a minimum coverage policy. Full coverage policies are generally $1,951 annually, or $162 per month without add-on options.

How many drivers in New Mexico are uninsured?

In a 2019 study done by the Insurance Information Institute, New Mexico ranked #4 for the highest number of uninsured drivers in the nation, with 21.8% of motorists opting out of coverage.

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