Insurance Center

All states have a minimum amount of liability insurance that each driver must carry on a vehicle that they operate on public roads and highways. There are almost no exceptions to the rule, and the penalties for not having insurance―or not having enough―are hard on the wallet.

New Mexico law sets the minimum levels of liability coverage that motorists must maintain:

• $20,000 per person for bodily injury to or death of one person

• $50,000 per accident for bodily injury to or death of two or more people

• $10,000 per accident for property damage

Automobile liability insurance is essentially the monetary safety net that you will rely on if you are at fault in an accident. In most cases, you will see the above figures presented by insurance companies as 20/50/10. When you break down the numbers, it looks like this:

• The first number is the maximum that an insurance company will pay out per person injured in an accident.

• The second number is the total injury payout available per accident if more than two people are injured. Ultimately, if the $50,000 doesn't cover the medical costs of those injured, they may sue you in court for more money.

• The last number is the maximum your insurance company will pay out to reimburse damage caused to property―from another driver's dented vehicle to houses, garages, light poles, and buildings.

Supplementary Insurance

There are plenty of substantial insurance policy upgrades available. Since it usually doesn't cost very much to upgrade your policy, and since car accidents can be much more costly than basic insurance will cover, almost everyone recommends that you buy as much insurance as you can afford. Optional car insurance upgrades include:

Collision: This coverage protects your vehicle when it is damaged in a collision with an object or another vehicle. If your vehicle is financed, most likely the bank or lending company will require you to carry this type of insurance to protect the lender's property while it is in your possession.

Comprehensive: This type of insurance covers your vehicle from damage or loss not caused by an accident. For example, theft, vandalism, flood, hail, or earthquake. This is the type of insurance that replaces the camera stolen from the back seat and the window the thieves broke to get to it.

Uninsured motorists insurance (UMI): Unfortunately, not all drivers on the road have insurance. And even if they do, it might not be enough to cover all your medical costs if the driver who hits you has only minimum liability coverage. Uninsured motorists insurance coverage can pick up the slack. UMI is also available to cover property damage.

Including the minimum liability requirements listed above, insurance companies usually recommend that you have at least $100,000 to $300,000 in total coverage.

Alternative to Insurance

New Mexico does have one interesting twist in this whole insurance game. If you can come up with a $60,000 cash deposit or surety bond, you can cover yourself without having to make payments to an insurance company. You just need to show evidence of financial responsibility.

Of course, then you've only got $60,000 of coverage―which might not be enough to protect your other assets should you get into a major accident that you have to pay for. But this can be the only option if you are a habitual traffic offender or have so many DWIs on your record that you can longer obtain normal insurance.

What it entails is either obtaining a surety bond for $60,000 or providing that same amount in cash to the state treasurer's office. Once everything is in place, you will be issued a certificate. This will show you have met the conditions required for financial responsibility. This in turn will allow you to drive and register a vehicle.

Penalties for Noncompliance

If you fail to provide evidence of insurance upon being asked to do so by a law enforcement officer, you can face a range of actions. If you actually have coverage but just can't find the insurance ID card in the glove box, you'll probably get a citation. To get the ticket waived, you must take valid evidence to the court showing you were covered at the time of the traffic stop.

If you actually did not have insurance when you were pulled over, you face more severe consequences. These might include being charged with a misdemeanor, having to pay a fine of up to $300, and losing your vehicle's registration.

New Mexico Insurance Identification Database

Despite a few complaints and a bit of Big Brother talk in the peanut gallery, the state legislature enacted the New Mexico Insurance Identification Database (IIDB) in 2001 to monitor the insurance status of registered drivers. The confidential program seeks to minimize the number of uninsured drivers on the roads.

Here's how it works: If you have insurance, your carrier will update this database accordingly. If you let the policy lapse, the insurance company will also notify the program, and you will be contacted by mail to rectify the situation. Of course, if you are complying with the law, then there is little chance you will ever hear a word from the IIDB.

Overall, the program has been a solid success and hopefully will continue to lower the number of drivers out on the roads without insurance coverage.