When a driver is found to be at fault for a car accident in New Mexico, his or her insurance company will pay, not the individual driver, therefore, the limits on the driver’s policy can significantly affect the maximum payout available. Collecting the highest amount possible for serious injuries and damages may take assistance from an experienced Albuquerque car accident attorney.
What Are the Required Amounts of Car Insurance in New Mexico?
In New Mexico, every motor vehicle operator is required to carry insurance on his or her vehicle. Since New Mexico is a fault state, where the at-fault driver must pay for a crash, liability insurance is a requirement. Liability auto insurance pays for the losses of others after an at-fault accident, not the policyholder’s losses.
The mandatory amounts of insurance in New Mexico as of 2026 are:
- $25,000 per person for bodily injury or death (one person)
- $50,000 per accident for bodily injury or death (two or more persons)
- $10,000 for property damage
If an individual desires coverage for his or her own losses after a car accident, first-party insurance such as collision coverage must be purchased. Uninsured and underinsured motorist insurance are also optional types of first-party coverage in New Mexico. Otherwise, a driver will only have the coverage offered by the at-fault party’s insurance policy.
How Do Policy Limits Affect a Car Insurance Claim?
The minimum amounts of insurance required in Albuquerque, New Mexico, may not fully protect you as an injured party. This is particularly common when there are significant injuries or multiple injured parties. If there were multiple injured passengers, for example, the at-fault driver’s $50,000 in bodily injury coverage would have to be divided among all of them.
Unfortunately, severe injuries do not override insurance policy limits. If your losses exceed the amount available on the liable party’s insurance policy, you will be personally responsible for the remaining amount. You may have to pay out-of-pocket for the rest of your medical bills, property damage and lost wages.
What Are Your Options Once the Limits on a Policy Are Reached?
If you have certain types of first-party auto insurance, this can provide supplemental coverage when you reach the limits on someone else’s policy. Examples include uninsured and underinsured motorist insurance, medical payment (MedPay) insurance, and collision and comprehensive insurance.
Your own car insurance company should step in to supplement your settlement in these situations if you have the right coverage. However, these are all elective types of insurance, meaning they are optional. If you choose only to purchase the required amounts of insurance in New Mexico, you will not be able to seek any recovery from your own insurance company.
Personal Lawsuits Outside of Insurance Coverage
Another possibility may be filing a lawsuit. You could sue the at-fault driver individually, making him or her liable for your losses beyond the limits of an insurance policy. The driver may have to pay you out of pocket or through wage garnishment if found liable. If the other driver was unlawfully driving without enough insurance, however, it is unlikely that he or she will have the assets to pay a judgment award.
Depending on the circumstances, you may also be able to file a lawsuit against a third party, such as an auto manufacturing company or the government, for additional injury coverage. If a defective auto part contributed to your injuries, a road hazard caused the crash or the other driver was working at the time of the accident, one or more third parties may also have to provide insurance coverage for your losses.
Insurance Bad Faith and Policy Limits
Sometimes, insurance companies refuse to settle even within policy limits, diminishing a claimant’s payout even further. It is important to know that insurance companies are for-profit businesses. Their goal during claim negotiations is always to convince the client to accept the lowest settlement possible. In some cases, insurance providers are willing to act in bad faith to avoid large payouts.
Bad faith means an insurer is not handling or processing a claim in a good-faith attempt to settle the dispute based on the terms of the policy and applicable insurance laws. Instead of accepting a valid claim when liability is clear, a bad-faith insurance company will unreasonably refuse to offer a fair settlement according to policy limits. This can result in an unfairly reduced recovery for the victim.
Other examples of insurance bad faith are unfounded claim rejections, inadequate investigations and unreasonable delays. If there is evidence of insurance bad faith, you or your attorney can bring an additional lawsuit against the car insurance company. Unreasonable and dishonest conduct while handling a claim opens the door to legal action against the insurance carrier. This type of lawsuit could allow for a financial recovery from the insurer beyond policy limits.
How a Car Accident Lawyer in New Mexico Can Help
After a car accident in Albuquerque, it is critical to understand exactly how much insurance coverage and financial compensation are available to pay for your injuries, bills and losses. This can be achieved with early policy limit investigations, as conducted by attorneys. Contacting a car accident lawyer in New Mexico can give you a professional investigator who will identify all applicable policies and limits involved in your case.
Through strategic settlement planning and an accurate valuation of how much your claim is worth, your attorney can maximize your payout as much as possible. Your attorney can investigate the crash for signs of third-party negligence, which could potentially give you more than one insurance policy to use.
A professional analysis by an attorney can give you an accurate and realistic expectation of how much your car accident case might be worth. This includes damages such as disability, pain, suffering and lost quality of life. From there, your attorney can identify all available outlets for financial compensation and build a smart settlement strategy for an optimal outcome.
At the Fine Law Firm, an attorney will handle all insurance company communications for you, negotiating settlement offers with claims adjusters until reaching a fair and full amount. Hiring an attorney increases the odds of achieving compensation beyond initial settlement offers and in excess of policy limits. If necessary, your attorney can take your case to trial in Albuquerque for a just outcome.For more information about how insurance policy limits may affect your Albuquerque car accident case and how a lawyer may be able to help, contact us today at (505) 889-3463 for a free initial consultation.