Everything You Need to Know About Flood Insurance in New Mexico

New Mexico homeowners with federally-backed mortgages may be required to carry flood insurance. Learn how flood insurance works here.
Written by Bonnie Stinson
Reviewed by Melanie Reiff
If you live in
New Mexico
, you may be required to carry flood insurance if you have a federally-backed mortgage and you live in a high-risk flood zone. A standard homeowners policy may not offer coverage against floods.
Only 2.05% of homeowners in New Mexico carry flood insurance. Unfortunately, New Mexico flooding may intensify in the coming years as extreme weather patterns intensify. Flash floods are already a common phenomenon. Do you need flood insurance?
Below, you will learn about flood insurance, what it covers, which zones require it, and whether you need it. This guide was compiled by
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What is flood insurance?

Flood insurance is a type of property insurance that will compensate your losses if your property is damaged due to flooding. Each policy has specific limits, inclusions, and exclusions.
A typical homeowners insurance policy will cover water damage—but not if it’s caused by flooding. Most policies cover damage due to plumbing failures and windstorms but they exclude flood damage. 
If you only have a homeowners policy, your house and your belongings may have no coverage if they are damaged in a flood. For comprehensive protection, you may need a separate flood policy.

What does flood insurance cover?

There are two basic types of flood insurance: building coverage and contents coverage. A flood policy may cover one or both of these categories.
If you have building coverage, then damage to the physical structure will be covered. If you have contents coverage, then damage to your personal possessions like furniture, clothing, and personal electronics may be covered.
Taken together, your flood insurance policy may provide financial protection for the electrical system, heating and cooling systems, appliances, furniture, electronics, and more. 
Be aware that flood insurance may not cover every object in your home, nor will it cover every type of flooding. For example, cash, vehicles, very expensive electronics, rare art, and property stored in the basement are not normally covered. You can add specific endorsements if you need additional coverage. 
Note that the coverage limits for residential customers are $250,000 for building coverage and $100,000 for contents coverage. Your provider may also set a deductible limit on your policy. 
Here’s a more detailed breakdown of what’s covered (and what isn’t) under each type of insurance:
Type of coverage
What it covers
What it doesn’t cover
Electrical and plumbing systems Water heaters and furnaces Large appliances like dishwashers or refrigerators Permanently installed bookcases, cabinets, and paneling Permanently installed carpets Window blinds Foundational walls, staircases, and anchorages Detached garages Fuel tanks, solar panels, and well water tanks/pumps
Decks and patios Swimming pools Fences and landscaping
Clothing Furniture Electronic equipment Curtains Washing machine and dryer Portable air conditioners, including window units Carpets not included in building coverage Valuables such as artwork up to $2,500
Valuable papers Currency Anything stored in a basement
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MORE: Does home insurance cover flooded basements?

Do you need flood insurance in New Mexico?

Possibly. Flash floods do occur in New Mexico but the risk varies by region. Plus, certain houses are at higher risk for damage due to their age and size. 
On the one hand, New Mexico does not have any law that requires homeowners to carry flood insurance. However, federal mortgage lenders can require borrowers in New Mexico to carry flood insurance if their property is located in a high-risk flood zone.   
Flood insurance is a smart idea for New Mexico homeowners who live in an area prone to flash floods—even if you are not required to carry it by your lender. 
Not sure if your property is at risk? Enter your information into a
FEMA map
to find out your flood zone code. The most high-risk area is
, where 9% of all properties are at risk of flood damage.

What flood zones require flood insurance in New Mexico?

Flood zones are
with various letter grades that describe their risk level. Zones may start with A, V, X, B, and C. There are sub-groups such as AO and AE. 
In New Mexico, homeowners with a federally-backed mortgage located in a zone beginning with A or V must carry flood insurance.
Note that A and V zones are not the only areas that experience flooding. In fact, more than 20% of NFIP claims are made by policyholders in an X, B, or C zone
Your flood policy may be issued by the
National Flood Insurance Program (NFIP)
which sells flood insurance to homeowners based on the risk level determined by FEMA. To buy an NFIP policy, you must live in one of New Mexico’s
participating communities
Key Takeaway If you live in a designated high-risk flood zone (starting with A or V) and have a federally-backed mortgage, you must purchase flood insurance. 

How much does flood insurance cost in New Mexico?

The national average cost of flood insurance is $739 per year. New Mexico homeowners pay a bit higher than this fee. The average flood insurance premium in this state is $928 per year or $77 per month.
Your payment may be lower, however. A new pricing methodology is coming in April 2022 thanks to more accurate calculations. Most New Mexico homeowners with an NFIP policy should see a decrease in their monthly premiums. 
The age, size, and type of property will also impact the cost of your premium. either raise or diminish your monthly premium. 
MORE: How much water damage will total a car?

How to save money on flood and auto insurance in New Mexico

Saving money is easier than you think. Here are a few ways to reduce the cost of flood insurance in New Mexico
Finally, remember that flood insurance doesn’t cover damage to cars!
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On average, Jerry users save nearly $900 a year on car insurance—that’s almost the entire cost of a year’s worth of flood insurance in New Mexico!
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