Minimum Auto Insurance Often Falls Short After a Serious Crash

If a crash has you asking what insurance will pay, start with the minimum limits. New Mexico’s minimum auto insurance amounts are 25/50/10: $25,000 for one injured person, $50,000 for two or more people in one accident, and $10,000 for property damage.

Those numbers are a legal floor, not the full picture of what a crash can cost. This page explains what each number means after a crash and where the gaps can show up.

New Mexico’s minimum auto insurance amounts are set by state law

The amounts of evidence of financial responsibility under the Mandatory Financial Responsibility Act are $25,000 for one person’s bodily injury or death, $50,000 for two or more people in one accident, subject to that one-person limit, and $10,000 for property damage; if the evidence is in the form of a surety bond or a cash deposit, the total amount shall be sixty thousand dollars ($60,000). NMSA 1978, § 66-5-208 sets these amounts as evidence of financial responsibility under the Mandatory Financial Responsibility Act. NMSA 1978, § 66-5-208 sets these amounts as evidence of financial responsibility under the Mandatory Financial Responsibility Act.

These limits are liability coverage. Liability coverage pays for injuries and damage the insured driver causes to other people. It does not pay the insured driver’s own injuries, so your own coverage matters too.

Violating the rule against operating an uninsured vehicle is a misdemeanor under NMSA 1978, § 66-5-205, but a person charged with it shall not be convicted if they produce, in court, evidence of financial responsibility valid at the time of issuance of the citation. That is one reason New Mexico drivers need to know their limits.

To check your own limits, look at the declarations page of your policy. It is the summary page that lists your coverage amounts and the dates the policy covers.

How each number applies after a crash

The $25,000 per-person limit caps what one injured person can receive from that policy. It applies no matter how many people were hurt.

The $50,000 per-accident limit is the total for everyone injured in the same crash. The $10,000 property limit covers damage to other people’s vehicles, fences, buildings, and other property.

Here is a made-up example. Two passengers ride in a car hit by another driver. One has $30,000 in medical bills, and the other has $20,000 in medical bills.

The first passenger’s claim is capped at $25,000 by the per-person limit. The second passenger’s $20,000 fits inside the remaining $25,000 of the $50,000 total. In this example, the policy pays $45,000 in total, and the first passenger’s extra $5,000 is not paid by this policy.

Why minimum limits can fall short with serious injuries

Minimum limits can fall short when injuries are serious, because the minimums are a floor, not a ceiling. A single serious injury can exceed the $25,000 per-person amount.

Catastrophic injuries, such as spinal cord injuries, amputations, and severe burns, often mean long hospital stays, surgery, rehabilitation, equipment, and lost income. These costs can build over months or years, not just the first few days after a crash.

Whether a given policy limit is enough depends on the facts of each injury and claim.

New Mexico’s unfair claims practices law lists failing to attempt in good faith to make prompt, fair and equitable settlements when liability is reasonably clear. Under NMSA 1978, § 59A-16-20, that conduct is unfair and deceptive when it is knowingly committed or performed with such frequency as to indicate a general business practice.

A practical step is to ask the insurer in writing for the full coverage that applies to the crash. Ask about any other policy that may also apply.

Uninsured and underinsured motorist coverage in New Mexico

Uninsured motorist (UM) coverage applies when the at-fault driver has no insurance. Underinsured motorist (UIM) coverage applies when that driver’s limits are lower than your own UM coverage.

Under NMSA 1978, § 66-5-301, auto policies delivered or issued for delivery in New Mexico must provide UM coverage on any motor vehicle registered or principally garaged in New Mexico, and that coverage includes UIM coverage. The named insured has the right to reject UM coverage.

Check your declarations page to see whether UM and UIM coverage appear, and whether they were accepted or rejected. Those choices shape which coverage may be available after a crash.

Practical steps while you gather information

Start by keeping the papers that show your coverage and the crash. These include your declarations page, your full policy, claim numbers, the police report number, and records of every medical bill and treatment.

Under NMSA 1978, § 66-7-206, a driver in a crash with bodily injury, death, or property damage of $500 or more must immediately give notice to police in a municipality. Elsewhere, notice goes to the county sheriff or the New Mexico State Police.

Under NMSA 1978, § 66-7-207, that driver must also send a written accident report to the Department of Transportation within five days.

Write down dates, names, and what each insurer representative tells you. Notes made close to each call help you keep the story straight.

Common questions

Talk with El Gringo Law about your situation

If you’re reading this while a family member is in the hospital, or while you adjust to a new disability, insurance questions can feel urgent. You don’t need every answer before you reach out.

El Gringo Law handles car accidents, trucking accidents, and catastrophic injuries, including spinal cord injuries, for people across New Mexico. Josh Wood is the responsible lawyer for this page. He is licensed in New Mexico and Arizona. The firm’s website is elgringolaw.com.

The firm offers a free, confidential initial consultation with no obligation to continue. Reach out through the contact form, by phone, or by starting a chat, and talk through your limits and injuries.