New Mexico laws require all motorists to carry proof of financial responsibility for all vehicles driven on the roadway. Proof of insurance must be provided in the event of an accident or upon request from law enforcement officers. Drivers are required to carry at least the minimum of liability insurance in the amount of $25,000 for bodily injury or death for a single person, $50,000 for bodily injury or death of two persons and $10,000 for property damage if the insured is found to be at fault.
Liability insurance protects the insured individual from potential lawsuits and other claims that may result from an auto accident. Liability only covers damage to the other party and does not pay for or reimburse for medical expenses or vehicle repair costs belonging to the insured. Payment is made to the other person who suffered loss for medical costs or personal property damage.
Comprehensive and Collision Coverage
Full coverage insurance provides the insured with multiple types of coverage in addition to liability coverage. Full coverage includes the option of adding comprehensive insurance and collision protection to an insurance policy. Comprehensive coverage allows the policy owner to recover any damage or loss due to factors other than auto accidents. These factors may include potential damage caused by flood, wind, earthquakes and other types of weather damage. Comprehensive coverage also provides financial protection in the event of fire, theft and vandalism.
Collision insurance protects the insured from accidents that occur with other vehicles, people, objects and properties such as buildings and houses. Similar to comprehensive, collision protection will pay for necessary auto repairs or replace the vehicle if the damage is excessive. In addition, collision insurance pays for towing and storage expenses that may occur following an accident.
Financed automobiles are typically required to carry comprehensive and collision insurance. Full coverage guarantees that the outstanding amount owed on the vehicle will be paid even if the vehicle is destroyed. Many lenders require individuals to provide them with proof of coverage before they provide the loan.
Insurance Packages and Premiums
Full coverage packages may vary in price range depending on many factors such as the value and type of vehicle and the deductible amount. Choosing higher deductibles will lower the insurance premium. The deductible is the amount that the insured is required to pay out-of-pocket when an accident or damage occurs. An individual who has been involved in previous accidents or does a lot of driving may want to consider a lower deductible. Choosing a higher deductible may still be considered reasonable if the individual has the ability to pay the out-of-pocket amount without causing damage to his or her finances.
Uninsured motorist or under-insured motorist coverage is not required in the state of New Mexico; however, it is recommended to carry this type of insurance to protect against others who lack sufficient coverage or have no coverage at all. New Mexico is a Tort State meaning there must be at least one individual found to be at fault for an accident. The party responsible for the accident is held accountable for all damages that occur. The individual found to be not guilty is permitted to file a claim to recover any and all losses that are not covered by the responsible party.
Failure to Provide Proof of Financial Responsibility
New Mexico laws require proof of insurance or other financial responsibility to be reported to the Motor Vehicle Department (MVD) before registering a vehicle. Individuals may bring proof in the form of an insurance card providing current coverage information, policy document or a letter provided by the insurance company stating the policy details. Vehicles that are currently registered may be suspended if insurance can not be verified.
The New Mexico Insurance Identification Database (IIDB) used by the MVD matches information from auto insurance companies who are licensed to conduct business in New Mexico with registered vehicles through the MVD. This system informs the MVD when a registered vehicle is no longer insured. The MVD will send out a Notice of Noncompliance form asking the registered owner to provide proof within 30 days. Failure to do so may result in fines and suspended registration.