Commercial Auto Insurance Minimum Requirements in New Mexico
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Driving in New Mexico requires the proof of financial responsibility, which means you’re able to pay for any damages to property or people you might cause in the future. To most people, “financial responsibility” simply means “auto liability insurance,” and although liability insurance is one way to show financial responsibility, it’s not the only way.
If you own a business in the state, and have vehicles that you or your employees drive for business purposes, you might need a commercial liability policy. In this state, the statutes on mandatory auto liability insurance apply to businesses and organizations exactly as they do to individuals; there’s no difference in minimum limits and per-vehicle requirements.
Ways to Establish Financial Responsibility
The state leaves it up to you to choose the method of financial responsibility you prefer, but no matter what, you must choose something. It’s illegal to drive on public roads without at least the minimum amount of liability insurance. Your choices are to:
- Purchase a policy for automobile liability insurance.
- Make a cash deposit of $60,000 per vehicle paid to the state treasurer.
- Post a surety bond issued by a company who is licensed to do business in New Mexico.
As the owner of a business, several factors will greatly determine the type of insurance policy you choose, as listed below:
- The number and type of vehicle(s) you need to insure
- The intended use of the vehicle(s)
- The driver(s) of the vehicle(s)
- The owner of the vehicle(s)
You can choose whether you'll insure each vehicle separately, via individual insurance policies, or get a commercial auto insurance policy.
For vehicles you use for business purposes only, a general rule of thumb is that a commercial vehicle insurance policy is a good idea. Also, if you have multiple employees who drive your business vehicles―or use their own cars for business transportation―it’s wise to get a commercial policy.
For example, the owner of a small road striping business has four trucks and six employees who use the vehicles to drive to job sites. The trucks hold all the specialized striping equipment and supplies. This owner should get a commercial policy to cover his multiple (and specialized) vehicles and drivers.
If you drive your own car for business, however, and no one else drives it but you, a personal auto insurance policy could work just as well.
For example, the owner of a dog-walking business drives her own car to and from client homes. She has one employee, but he rides his bike to and from job sites. This owner is probably fine with a personal auto policy.
The following list covers other situations that would probably require a commercial auto insurance policy:
- Your business vehicles transport people or products.
- Your trade business has multiple cars driven by multiple workers.
- Your business vehicles have specialized, built-in equipment used only for business purposes.
- You want to provide coverage for your mobile employees who use your vehicles, or their own vehicles for business purposes.
- You need an auto policy with a higher amount of coverage than a personal auto policy.
If you need more assistance determining whether you should purchase commercial coverage, contact the state's Motor Vehicle Division (MVD).
Meeting with an insurance provider can help a lot in making your decision on insurance. Whether you want commercial or personal vehicle insurance, the agent will probably ask you the following questions:
- Who owns the vehicle(s)?
- How much do the vehicle(s) weigh?
- How do you use the vehicle(s)?
- How much liability coverage do you want?
The rule is the same for any insurance policy, namely, that the more coverage you get, the more you’re protected from financial risk. New Mexico has set the following minimum liability coverage amounts for all vehicles:
- $25,000 for injury or death of one person per accident
- $50,000 for injury or death of two or more people per accident
- $10,000 for damage to property per accident
Keep in mind that these are the minimums per vehicle. As a business owner, it’s smart to protect your business investments and livelihood by getting much more than the minimum amount of coverage. In fact, many insurance consultants tell their clients to get a policy for a comfortable $1 million, or at the very least $500,000.
Because the choice between commercial or personal auto insurance varies from business to business, you can get more information about the subject when you contact the MVD.
For a commercial auto policy, you can go to an insurance provider that specializes in commercial policies, or you can go to a provider that offers a full range of policies for individuals and businesses alike. There are also companies that only sell auto insurance, and others that will insure practically anything.
It’s definitely a buyer’s market when it comes to finding an insurance provider that will meet your needs, so be sure to shop around.
You’ll need to show proof of insurance (or financial responsibility) when you register your vehicles. It’s against the law for the MVD to register a vehicle that doesn’t have the minimum amount of liability insurance.
Once your vehicle is registered, maintaining the required amount of insurance is critical. The MVD now requires all insurance providers to send in monthly reports that list all the new policies, cancellations, and non-renewals that have occurred during the month.
If your business vehicles are uninsured for any amount of time, you’ll get a notice from the MVD requesting that you provide proof of insurance during the period of the alleged lapse. At that point, you can expect:
- Registration suspension for at least 30 days, if you can't provide proof of insurance within 20 days of the request.
- A fine of $1,000 or a six-month stay in jail if you don't sent your registration certificate to the MVD.
Keep in mind that if law enforcement stops you and you have no proof of insurance, the officer will issue a suspension on the spot and remove your license plates.
Clearing a suspended registration requires the following actions:
- Providing proof of current liability insurance.
- Paying a $300 fine for lapsed insurance and a $25 reinstatement fee.
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