Keeping Current with New Mexico Car Insurance Laws

Unfortunately, not every driver on the road acts in accordance with New Mexico car insurance laws.

Many drivers fail to ensure their own responsibility for their actions through purchasing insurance. The legislature of New Mexico is aware of this problem and enacted N.M. Stat. Ann. § 66-5-301 as a means of protecting those drivers who responsibly seek insurance by requiring that insurance companies provide an option to drivers to purchase uninsured or underinsured motorist coverage, on top of the state-mandated liability coverage. §66-5-301 requires that insurance companies provide drivers with the opportunity to explicitly reject such coverage. Insurance companies have largely obeyed the statute’s requirements in form, but not in substance, often placing such rejection information near the end of voluminous policy documents.

Jordan V. Allstate

The plaintiffs in Jordan v. Allstate have covered insureds who had been hit by uninsured or underinsured motorists and were seeking compensation for their medical expenses and pain under their own insurance policies. Generally, the plaintiffs had purchased uninsured motorist coverage, but at a lesser amount than the coverage for their own liability. For example, one insured agreed to pay for $100,000.00 in liability coverage for their own actions, while only paying for $50,000.00 in coverage if he was hit by an uninsured motorist.

At first, there does not seem to be anything wrong with this, except for the fact that there was no evidence that his insurer ever offered him the ability to purchase additional coverage, or that he was even aware that such coverage existed. Thus, when he got injured and needed insurance coverage to help pay for his medical expenses and lost earnings, not only was he faced with the fact that the driver that hit him had no coverage at all, but that his own insurance company was willing to pay out $100,000.00 per vehicle he hit, but only $50,000 now that an uninsured driver hit him. After reviewing the policies involved the New Mexico Supreme Court found that the insurance documents failed to these policyholders with an appropriate opportunity to purchase or reject uninsured/underinsured motorist coverage, and set out the following bright-line requirements to be applied in future cases:

Insurers Must Offer The Insured Uninsured /Underinsured Motorist (UM/UIM) Coverage Equal To The Policy’s Liability Limits;

1. Provide premium costs corresponding to the available levels of UM/UIM coverage;
2. Obtain a written rejection of UM/UIM coverage equal to the liability limits; and,
3. Make that rejection a part of the policy that is delivered to the insured.

If an insurer fails to comply with these requirements, the UM/UIM coverage is automatically reformed to equal to the liability limits, or the amount that your company must pay out if you are at fault for an accident.

Significantly, the court found that these requirements apply to policies already in existence. This means that people injured in accidents involving uninsured motorists may be able to seek additional coverage under their existing policies, even if you have already been denied additional money. If you were injured by an uninsured motorist and didn’t seek compensation because you thought it might be a lost cause we can help get you the full amount you deserve.