Car insurance claim rules in New Mexico

What the insurer owes you on timing

Section 59A-16-20 of the New Mexico Insurance Code lists unfair claim practices. Among them: failing to acknowledge and act reasonably promptly on communications about claims, failing to affirm or deny coverage within a reasonable time after you complete the proof of loss, and failing to try in good faith to settle once liability is reasonably clear. The statute uses no day counts for those steps.

The interest is 1.5 times the prime lending rate for New Mexico banks, fixed on the 46th day after proof of loss. It does not apply to claims already in arbitration or litigation. Send your proof of loss in a way that shows the date it arrived, since that date starts the clock. For a file that stalls, see our page on slow claims.

Total loss in New Mexico

New Mexico's title law, NMSA §66-1-4.16, has no repair-cost percentage. A car becomes a salvage vehicle when the insurer, owner or lender considers it uneconomical to repair. A car the insurer pays as a total loss gets a branded salvage title even if it is later fixed, once you agree to the settlement amount and the insurer tells you the title must be branded. Under the department's rules, hail damage is left out when deciding salvage status.

• The insurer's math decides. Most insurers compare the repair estimate plus the car's salvage value with its actual cash value.
• The payment is actual cash value. Ask for the valuation report and the comparable cars it used; our guide to total loss claims lists what to check.
• Run the numbers yourself. The total loss check shows how a formula state reaches its decision.

Reporting a New Mexico crash

Under NMSA §66-7-206, a driver in a crash that injures or kills someone, or causes apparent property damage of $500 or more, must notify the police immediately by the quickest means: the city police inside a municipality, otherwise the county sheriff or the nearest New Mexico State Police office.

New Mexico also requires the driver's own written report. Section 66-7-207 says the driver must send it to the Department of Transportation within 5 days after a crash with an injury, a death or total property damage of $500 or more. Officers who investigate send their own reports within 24 hours after finishing. Keep a copy of what you file for your insurer.

Fault and shared blame

New Mexico is an at-fault state, so the driver who caused the crash and their liability insurer pay for the damage and injuries they caused. In Scott v. Rizzo (1981), the New Mexico Supreme Court adopted pure comparative negligence: your own share of fault reduces what you recover but does not bar it, even if your share is the larger one.

If the other driver has no insurance or too little, your uninsured motorist coverage may pay; see a crash with an uninsured driver.

Deadlines to sue and where to complain

Under NMSA §37-1-8, a lawsuit for personal injury must be filed within 3 years. A suit for damage to your car or other property has 4 years under §37-1-4. Your policy may set its own time limits for notice and for disputes, so read its conditions.

1. Put your questions in writing and ask for the policy language behind a denial or a low offer.
2. Contact the Office of Superintendent of Insurance (OSI), which processes consumer complaints, holds hearings and resolves appeals.
3. File a complaint with OSI if the insurer misses the 45-day payment rule or won't explain itself; see our guide to insurance department complaints.

Questions people ask