Car insurance in New Mexico is higher than in neighboring states, ranking among the top 10 states for most expensive car insurance. As the 8th most expensive state, New Mexico policies average approximately $1,896 per year. There are several factors that contribute to insurance costs. If you have recently moved to New Mexico or are considering moving there from another state, it’s important to understand why insurance costs so much so that you can adjust your coverage accordingly.

Car insurance premiums are calculated upon many factors. Rates vary from one state to the next and even among different zip codes. Rates are also heavily dependent on personal factors such as driving history and credit score, so your rates will not be the same as your neighbor’s or friend’s.

Weather, crime rate, traffic statistics and population all play a role in calculating insurance. Areas with a high population density will usually have more expensive premiums than more rural areas; similarly, places without reliable public transportation will have higher premiums as more people must drive more in order to commute to work or school.

Areas with temperate climates also tend to have lower insurance costs than those with severe weather. Hail and snow are particularly dangerous to vehicles as they can cause damage or lead to accidents.

Vandalism and theft also play a large role in determining auto insurance costs. Albuquerque, New Mexico, ranks as the 8th highest city for car theft in the nation. Large cities near country borders are especially prone to vehicle theft because stolen vehicles are often used for drug trafficking or other related crimes.

Why are New Mexico car insurance premiums so high?

In New Mexico, the major reason that car insurance premiums are so high is because of the number of uninsured drivers. New Mexico has the second highest rate of uninsured motorists of any state in the country, with a whopping 26 percent of drivers not carrying insurance.

Whenever a person is involved in an auto accident that is not his fault, his insurance company pursues the at-fault party’s insurance for reimbursement of the claim. This allows the not-at-fault insurer to recover the expense of repairs. When the at-fault person does not have insurance, the company will still attempt to recover these funds but the attempt is not always successful. This means that the insurance company loses money and must compensate by charging higher premiums.

Therefore, every time someone drives a car without insurance, everyone else in the state is responsible for picking up the slack. This is the main reason why premiums are so high in New Mexico and other states with high rates of uninsured drivers, such as Louisiana and Michigan.

The other main factor influencing cost in New Mexico are DUI convictions. Drunk drivers account for 36 percent of all automobile fatalities in New Mexico. When a high incidence of drunk driving coincides with uninsured drivers, the result is high insurance premiums across the state.

New Mexico Car Insurance Requirements

In order to register a vehicle in New Mexico, you must carry a bodily injury liability policy with at least $25,000/$50,000 in coverage + $20,000 of property damage liability. Alternatively, if you do not wish to purchase liability insurance you can opt out by presenting proof of financial responsibility to the DMV. If you can show that you have $60,000 available to spend in the event of an accident to cover repairs, you do not need to purchase insurance.

$60,000 may not be enough to cover a serious accident, however, so carrying insurance may be worth the price. You might also wish to increase the liability limits on your policy. Any damage or injuries you cause that exceed the policy limit will be billed to you directly. This can jeopardize your assets and ruin your credit and may lead to your license being suspended until you have paid off the claim.

If you have a new or valuable vehicle, you will want to carry collision and comprehensive coverage as well. Even if your vehicle is older, full coverage auto insurance is worthwhile as it allows you to repair your vehicle for only the cost of your deductible rather than footing the bill entirely out of your pocket.

Uninsured motorist coverage is also available in New Mexico, although not mandatory!

Uninsured motorist coverage pays for your damage or injuries if you are in an accident with a person who does not have insurance; essentially, it takes the place of the other person’s liability coverage. Your uninsured motorist coverage usually has the same limit as your liability insurance. You can purchase this coverage whether or not you carry collision or comprehensive insurance.

You can also purchase additional coverage such as personal injury protection, roadside assistance or rental reimbursement coverage. Extra coverage will cost more, but the convenience offered is worth the price. Whenever you contact the insurance company for a quote, be sure to discuss your budget and your needs so that you can obtain the right amount of coverage for your family.