With an average of only 12 residents per square mile, New Mexico sounds like a haven for people who like space and low car insurance rates. But it ranks higher than 32 other states for average insurance premiums. Squeaking in at just $5 dollars under the monthly average for the nation, New Mexico’s residents are still paying a high price for car insurance. However, it’s possible to make significant savings if you shop around for quotes.
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It’s important to remember that the best car insurance rates for one person may not be the best for you. Things like your age, gender, vehicle make and model, credit history, and even your occupational status are used to calculate your insurance premium. Every company uses a different formula, which is why you should get as many quotes as possible from different insurers.
Our Top 3 Picks for the Best Cheap Car Insurance in New Mexico
New Mexico’s Minimum Coverage Requirements for 2020
New Mexico requires drivers to carry only liability insurance. Minimum amounts are as follows: $25,000 of bodily injury or death coverage per person, $50,000 of bodily injury or death coverage per accident, and $10,000 of property damage coverage.
New Mexico does have one quirk in its coverage mandates: State law technically requires uninsured/underinsured coverage, but you have the option to forgo this coverage and still be in compliance with state law if you do it in writing.
How long does the quote process take?
You can expect to spend five to 10 minutes with each online quote tool and possibly 20 minutes if you decide to call. Even spending a few minutes doing a quick price comparison can save you money, so consider it a wise investment of your time.
What criteria should you look for when choosing insurance companies for price comparison?
During your search, you’ll want to consider the financial stability and customer service of each company. Insurers should have acceptable J.D. Power ratings for the Southwest region and score “excellent” or higher from A.M. Best. Look for companies that specifically offer coverage in New Mexico.
Why are New Mexico’s rates so high?
New Mexico is one of the top 10 most rural states in the United States and one of the least populated, with about 37 million fewer people than the highest populated state, California. This should make anyone question why New Mexico ranks high for average car insurance costs.
The reason is that 21 percent of drivers are uninsured, according to the Insurance Information Institute. Only Florida and Mississippi have more uninsured drivers on their roads. New Mexico also is relatively lax about penalizing uninsured drivers. The state doesn’t even require the SR-22 form that most states require of drivers with serious violations, such as driving without a license or insurance or getting a DUI. Because of these factors, the number of uninsured motorists probably won’t trend downward for a while. This makes shopping for quotes and finding the best car insurance companies a worthy endeavor.
What if you’re not a full-time resident?
According to AAA, as a nonresident of New Mexico, you can operate your vehicle in the state for up to 180 days without needing to register your car there. If you are employed in New Mexico for 30 days out of a 60-day period, you are considered a resident and should register your car there. This mandate is waived if you are commuting to New Mexico from another state. If your vehicle is operating for profit within the state, it must be registered, and you must pay the same fees a resident would.
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Is New Mexico a no-fault state?
New Mexico is a “fault” state wherein the person who is at fault for an accident is responsible for the resulting damages. An injured party has several options when pursuing damages. They can file a claim with their own insurance, file a third-party claim with the at-fault driver’s insurance provider, or file a personal injury lawsuit against the other driver.
What is SR-22 car insurance?
An SR-22 is a document that proves a driver has a policy in place that covers the state’s legally required minimum amount of vehicle liability insurance. It is commonly used for those who have a DUI conviction. New Mexico is one of six states in the U.S. that does not require SR-22 paperwork.
Is going with cheap car insurance the best option?
Having better coverage means having more protection. When things go wrong on the road, they can really take a toll. Take a look at these numbers:
- On average, drivers have an accident every 17.9 years.
- Average costs of an accident that causes a nonfatal but disabling injury average $93,800. If you hit an expensive car or cause severe injuries, damages could skyrocket.
By maintaining cheap car insurance, you are leaving yourself open to possible catastrophe. If you cause a disabling accident, bodily injury damages could exceed your coverage by more than $50,000, leaving the responsibility for the gap in coverage squarely on you.
Upgrading to a better policy isn’t as expensive as you might think. For example, by paying around $170 more per year, you’ll have a policy that could end up saving you tens of thousands of dollars if you are in an accident.
Should you skip coverage?
New Mexico uses an electronic database to track proof of insurance within the state. This system makes it the responsibility of the insurance companies to report a registered vehicle’s insurance standing to the database. If the state database turns up an uninsured vehicle on the roads, a Notice of Noncompliance is sent to the vehicle owner, who then has 30 days to get insurance or the vehicle registration will be suspended. Reinstatement of the registration will cost you about $30, and you must provide proof of insurance first. If you take the uninsured vehicle for a ride on New Mexico highways, you could face a $100 fine.
What is the main takeaway?
As previously stated, many factors contribute to the wide variety of quotes you could receive. Sometimes, the way to a better price is simply waiting. Once you hit age 25, most companies start to give you a break on your premiums. Keep a clean driving record and maintain a good credit score, which is important to get low rates. You could even move if you felt so inclined; a ZIP code change could translate into cash savings or increased premiums.
New Mexico’s rates are pretty high compared with the rest of the nation, and unfortunately, there’s not much you can do about that. However, if you dedicate the time to shop around, you will probably find at least a few hundred dollars in savings from other providers. After you’ve found a few promising quotes, compare rates for upgraded coverage, as well. Opting to spend a little more money now can seriously pay off in the future. Remember: The best car insurance isn’t always the cheap car insurance.
Even If You’re Happy With Your Insurance, It’s Best to Shop for a New Policy Every Couple of Years
Insurance premiums are mysterious. It seems like no one can tell you everything that goes into calculating those rates. The obvious factors are the first questions an insurer will ask — like how old you? Do you have a clean driving record? But what other bits of information are playing a role in creating the mysterious quote?
Recently, insurance companies began using big data to introduce new variables into the equation. Big data sounds vague, but it can contain everything from your online shopping habits to what you shared on Facebook or retweeted last week. The use of this plethora of information to influence rates is called price optimization. Insurance companies use this data to understand a key factor in profitability: your tolerance for price increases.
In other words, insurers want to know how likely you are to shop around for a better rate and how sensitive you are to rising premiums. This information allows companies to charge just enough to maximize profit with incremental price increases but not too much to make loyal customers uncomfortable with their rates.
This is why it’s smart to shop for car insurance regularly. When insurance providers know that you are in the hunt for a good deal, they will have more of an incentive to keep your rates low. They do not want to lose your business because the cost of acquiring a new customer far outweighs the cost of maintaining one. Applying for quotes with lots of companies could yield great savings, but even if it doesn’t, it may save you from another yearly rate hike.
Contacting your agent is a good place to start if you’re curious about your company’s policies regarding price optimization. Don’t let another unexplainable rate increase slide by unquestioned and always remember that other providers are eager for your business.
Many states have banned price optimization. Unfortunately, New Mexico has yet to make a formal statement regarding price optimization. For now, you’ll need to remember that aggressively searching for the best prices is your best defense against unfair rate increases.
Be on the lookout for discounts during your search. Chances are you’ll be able to find something that applies to your situation. You may be able to net a good driver discount if you have gone accident-free or violation-free for a certain number of years. If you are a young driver under the age of 25, you may qualify for a student discount when you show proof of good grades.
If you have bad credit, you still have options when looking for insurance quotes. In this case, shopping around is even more important. You may want to look into insurers that specialize in high-risk drivers.
Best Car Insurance in New Mexico
- State Farm
- Liberty Mutual