With an average of only 12 people per square mile, New Mexico sounds like a haven for low auto insurance rates. But in fact it ranks higher than 32 other states for average insurance premiums. Squeaking in at just $5 dollars under the monthly average for the nation, New Mexico’s residents are still paying a high price for auto insurance. But when I began my search for quotes in the Land of Enchantment, the savings I found were astounding.

All it took for me was applying for three different quotes and I was able to find over $400 of hidden savings. Geico came in swinging with a quote of $1,344 per year for minimum coverage. You can imagine my surprise when State Farm came sliding in under the radar at $886 per year. So why are these rates so bipolar, and why can’t I tell you who will have the best car insurance rates for you?

Imagine yourself as a book of codes and secrets. Each insurance agency must find a way to decode your complicated identity in order to accurately provide a quote. Things like age and sex, vehicle make and model, credit history, and even your occupational status and title are fair game for the insurance companies. And every company uses a different decoder. This is why you should get as many quotes from as many companies as you can bear to process.

Now that doesn’t sound like many, but our journalistic standards for the companies that we chose (as explained below) reduced my list to only three. In under 15 minutes, I had completed all three online quote processes. You can expect 5-10 minutes for each online quote tool that you will use, and possibly 20 minutes if you should decide to call. Either way, over $400 of savings seems like time well spent.

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Our Top 3 Picks for the Best Car Insurance in New Mexico

These three companies meet our standards for financial stability and customer service by having acceptable JD Power ratings for the Southwest region and scoring “excellent” or higher from A.M. Best.

You might wonder why companies like The Hartford or American Family Insurance aren’t listed in my quotes, while they do rank highly with JD Power and A.M. Best. Succinctly said, American Family did not offer coverage to New Mexico, and The Hartford (upon becoming keen of our journalistic purposes for their quotes) decided they would no longer provide us quotes.

Insurer My quote
State Farm $886
Liberty Mutual $1,010
Geico $1,344

When I took a look at the numbers, I discovered an incredible $458 of difference. If I was able to find that much in such little time, think of the savings you could find once you expand your search. But perhaps you’d like to put that money towards sensible and responsible purposes, I would recommend upgrading your coverage to be better protected. Because as you will see, minimum coverage could mean maximum problems.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

Insurance premiums are mysterious figures. It seems like no one can tell you everything that goes into calculating those rates. The obvious factors are the first questions an insurer will ask like how old you are or how clean your driving record is. But what other bits of information are playing a role in creating the mysterious quote?

Recently insurance companies began using big data to introduce a new variables into the equation. Big data sounds vague but it can contain everything from your online shopping habits to what you shared on or re-tweeted last week. The use of this plethora of information to influence rates is called price optimization. They use this data to understand a key factor in profitability: customer price elasticity.

In other words, they want to know how likely you are to shop around for a better rate and how sensitive you are to rising premiums. This information allows companies to charge just enough to maximize profit with incremental price increases, but not too much to make loyal customers uncomfortable with their rates. One study, by Earnix, found that 62 percent of insurers polled were either already using price optimization or had plans to incorporate it, and that another 22 percent saw themselves using it in the future.

This is why it’s smart to shop for car insurance regularly. When insurance providers know that you are on the hunt for a good deal they will have even more of an incentive to keep your rates low. They do not want to lose your business, because the cost of acquiring a new customer far outweighs the cost of maintaining one. Applying for quotes with lots of companies could yield great savings, but even if it doesn’t, it may save you from another yearly rate hike.

Contacting your agent is a good place to start if you’re curious about your company’s policies regarding price optimization. Don’t let another unexplainable rate increase slide by unquestioned, and always remember other providers are eager for your business.

Because price optimization involves non-risk related factors, states like Ohio and California (15 in total) have begun releasing legal bulletins addressing its use. Many states have banned the practice altogether. Unfortunately, New Mexico has yet to make a formal statement regarding price optimization. For now, you’ll need remember that aggressively searching for the best prices available is your best defense against unfair rate increases.

New Mexico’s Minimum Coverage

The Bare Minimum

New Mexico requires only Liability insurance to be carried by legal drivers. Minimum amounts are as follows: $25,000 of bodily injury or death coverage per person, $50,000 bodily injury or death coverage per accident, and $10,000 property damage coverage.

New Mexico does have one quirk in its coverage mandates. State law technically requires Uninsured/Underinsured coverage to be apart of your policy. However, you have the option to forgo this coverage and still be in compliance with state law if you do it in writing.

The Best Car Insurance is Not Just Cheap Car Insurance

Having better coverage means having more protection. When things go wrong on the road they can really take toll. Take a look at these numbers:

  • On average drivers have an accident every 17.9 years. Precaution says you should assume you will adhere to these statistics.
  • Average costs of an accident that causes a disabling, but nonfatal injury are around $79,400. If you hit an expensive car or cause even more complicated injuries damages could skyrocket.

By maintaining cheap car insurance, you are leaving yourself open for possible catastrophe. Assuming worst comes to worst, and you cause a disabling accident, bodily injury damages could exceed your coverage by more than $50,000. Leaving the responsibility for the gap in coverage squarely on your head.

Upgrading to a greater policy won’t be as expensive as you might think. When I received quotes for coverage of $50/$100 for bodily injury, I was pleasantly surprised to find that State Farm, again, had the lowest quote. Only $178 more per year for a policy that could save me tens of thousands of dollars in the long haul. Only Liberty Mutual and Geico had larger gaps in their prices for greater coverage. This again points to the need for multiple quotes from multiple companies, who knows how much you might save.

If You Skip Coverage, It’ll Cost You

New Mexico uses an electronic database to track proof of insurance within the state. This system makes it the responsibility of the insurance companies to report the status of a registered vehicles insurance standing to the database. If the database of all registered vehicles in the state finds one that is not under insurance, a Notice of Noncompliance is sent to the owning individual. That individual then has 30 days to cover the vehicle, or the registration will be suspended. Reinstatement of the registration will cost you about $30, and you must provide proof of insurance first. If you take the non-insured vehicle for a ride on the New Mexican highways, you could face a $100 fine.

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Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.

Beat the Average Premium

As previously stated, many factors contribute to the wide variety of quotes you could receive. Sometimes, the way to a better price is simply waiting. Once you hit 25 most companies start to give you a break on your premiums. Keep a clean driving record, and hold onto a good credit score, important to achieve low rates. You could even move if you felt so inclined; a zip code one number off could translate into cash savings or increase premiums.


Why are New Mexico’s rates the way they are?

New Mexico makes the top ten most rural states in the United States according to the US Census Bureau. It is also one of the least populated states in the country, about 37 million less than the highest populated state, California. This should make anyone question why New Mexico ranks high on the list of average auto insurance premiums.

One need only to see a single percentage to understand this strange occurrence: 30%. That is the percentage of Uninsured drivers that were estimated to be in the road prior to 2001. The second highest in the nation at the time. In 2001 New Mexico enacted a new law which created the Insurance Identification Database. This is the automated system which tracks registered vehicles insurance standing across the state. By 2004, uninsured driver estimates had dropped by 6%, which would have been considered a great feat anywhere. But in a study by the Insurance Research Council in 2012, New Mexico’s uninsured drivers rates still rested between 15-26%.

New Mexico has relatively lax punishments for being caught driving uninsured, not even requiring the SR-22 paperwork that is common to almost every other state. Couple this with already high premiums, and uninsured motorists rates probably won’t trend downwards for a while. This makes shopping for insurance quotes more important than ever to find the best rates for you.

What if I’m not a full-time resident?

According to the American Automobile Association, a non-resident of New Mexico, you can operate your vehicle in state for a period of up to 180 days without needing to registering your car there.

If you are employed in New Mexico for 30 days out of a 60 day period, you are considered a resident and should register your car in state. This mandate is waived if you are commuting into New Mexico from another state.

If your vehicle is operating for profit within the state, it must be registered and pay the same fees as an resident would.

The Bottom Line

New Mexico’s rates are pretty high compared to the rest of the nation, and unfortunately, there’s not much you can do about that. However, if you dedicate the time to shop around you will probably find at least a few hundred dollars in savings from other providers. And when you do, make sure to compare rates from upgraded coverages as well. Opting to spend a little more money now can seriously pay off in the future. Remember: The best car insurance isn’t always the cheap car insurance.

Find the Best Car Insurance

Enter your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.