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 since 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), but you don’t have to include uninsured motorist coverage in your car’s policy.
To help you navigate through New Mexico’s unusual uninsured motorist insurance laws, we're breaking everything down. 

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.
State law requires insurance companies to offer UM 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.
car insurance laws in New Mexico
require drivers to carry the following:
  • $50,000 of bodily injury liability per accident
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. 
But 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
  • Under New Mexico law if you suffer damages, you’re only entitled to the maximum amount of underinsured motorist coverage that you purchased
  • So 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.
Let’s expand on this example: 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. This means that your underinsured policy will only pay out another $25,000 rather than the $75,000 you need for your medical bills. 
To sum it up: 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, that’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. 
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. 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.
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, you’ll need to contact your own insurance provider about filing an uninsured/underinsured motorist claim. 
MORE: Does insurance cover a hit and run?

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 worth getting:
  • It’s part of a package deal with uninsured motorist coverage
  • You can stack your policies
  • 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. 
MORE: Everything you need to know about hit-and-run claims

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. 
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