The personal auto policy itself (Parts A through F, insureds, covered autos and exclusions) is covered in the national Personal Auto Policy guide. New Mexico is a tort (at-fault) state with pure comparative negligence. This guide covers the New Mexico rules: the Mandatory Financial Responsibility Act, required policy terms, uninsured and underinsured motorist coverage, and the protection for drivers in not-at-fault accidents. Citations are to the New Mexico Statutes (NMSA 1978).

Compulsory insurance and minimum limits

The Mandatory Financial Responsibility Act requires owners and drivers to keep liability coverage or other evidence of financial responsibility (NMSA 1978, 66-5-205, -208). The minimums are 25/50/10:

• Instead of a policy, financial responsibility can be shown by a surety bond or a $60,000 cash deposit with the state treasurer (NMSA 1978, 66-5-208(D); 66-5-226).
• Registration: the department won't issue or renew registration without insurance or other evidence, and suspends it when coverage lapses (NMSA 1978, 66-5-206).
• Driving uninsured is a misdemeanor (NMSA 1978, 66-5-205(E)). A driver who shows the court proof of coverage that was valid when cited can't be convicted (66-5-205(F)).
• At a traffic stop without proof, the officer issues a 30-day temporary operation sticker and removes or defaces the plate, which is returned once proof is shown (NMSA 1978, 66-5-205.1(A)).
• The department suspends the registration, for up to one year, of a person who drove uninsured or falsely claimed coverage and doesn't produce proof within 20 days of the demand (NMSA 1978, 66-5-236(A)(2)).

Required policy terms

• A liability policy must cover the named insured and anyone driving the covered vehicle with the named insured's express or implied permission (NMSA 1978, 66-5-205.3(A)(2)).
• Allowed exclusions include a vehicle rented to others or used to carry people for a charge, including transportation network company use. Shared-expense car pools aren't excluded (NMSA 1978, 66-5-205.3(C)).
• Named driver exclusion: any auto policy may exclude a named driver by an endorsement signed by at least one named insured (NMSA 1978, 66-5-222).
• Commercial self-insurance: the Superintendent issues a certificate of self-insurance to applicants who meet the same criteria as workers' compensation self-insurers (NMSA 1978, 66-5-207.1).

Uninsured and underinsured motorists

• No auto liability policy on a vehicle registered or principally garaged in New Mexico may be issued without UM coverage, but the named insured may reject it in writing (NMSA 1978, 66-5-301(A), (C)). The rejection must be endorsed on, attached to or otherwise made part of the policy (13.12.3.9 NMAC).
• A rejection carries over to renewals with the same insurer unless the insured asks for the coverage in writing.
• UM includes UIM (NMSA 1978, 66-5-301(B)).
• Limits: available from the minimums up to the insured's own liability limits (NMSA 1978, 66-5-301(A)).
• Underinsured means the other driver's bodily injury limits are less than the insured's UM limits (NMSA 1978, 66-5-301(B)).
• UM property damage may exclude no more than the first $250 of loss (NMSA 1978, 66-5-301(C)).
• The same offer and written-rejection rule applies to business auto policies.

Accidents where the insured wasn't at fault

• An insurer's rates can't raise the premium because of an accident in which the insured was not at fault (NMSA 1978, 59A-17-7.1(A)).
• An insurer can't cancel or nonrenew because of a not-at-fault accident (NMSA 1978, 59A-17-7.1(B)).
• If the insurer decides fault differently from the police accident report, it may do so only after an investigation.

Fault and recovery

New Mexico uses pure comparative negligence: an injured person's recovery is reduced by their own percentage of fault but isn't barred, even at more than 50%. Defendants are generally severally liable for only their own share of fault, with joint and several liability kept for cases such as intentional injury, vicarious liability and strict products liability (NMSA 1978, 41-3A-1; Amrep Southwest v. Shollenbarger, 1995).

Cancellation

General New Mexico cancellation rules for property and casualty policies (NMSA 1978, 59A-18-29) are in the New Mexico Property and Casualty Basics guide: 10 days' notice for nonpayment at any time, cancellation without cause only in the first 60 days, and only for reasonable cause after that.

Common exam traps

• 25/50/10. Property damage is $10,000, not $25,000.
• UM/UIM must be included unless rejected in writing, and the rejection must be part of the policy.
• UM includes UIM, and an underinsured car is measured against the insured's own UM limits.
• Not-at-fault accidents can't raise the premium or be the basis for cancellation or nonrenewal.
• Pure comparative negligence: a driver 70% at fault can still recover 30% of their damages.
• $60,000 cash deposit is the alternative to a policy.