Frequently Asked Questions

Frequently Asked Questions

Affordable Care Act
  • What is The Affordable Care Act (ACA) also known as “Obamacare”?
    The Affordable Care Act (ACA) was signed into law on March 23, 2010. The ACA provides for the establishment of an electronic marketplace where individuals may shop for insurance. This electronic marketplace called an “Exchange,” allows individuals to buy Qualified Health Plans (QHP) with Essential Health Benefits (EHB). Individuals purchasing health plans sold through an Exchange may be eligible for cost assistance (subsidy)
    To see if you qualify for assistance in paying health care premiums to use this calculator.
    To learn more about the new marketplace and to shop for plans, visit the federal exchange at or the state insurance Marketplace at 
  • What is a Marketplace (formerly called an Exchange)?
    Marketplaces help individuals and small businesses purchase coverage. Consumers can now access and compare multiple prices in a centralized location-thereby maximizing their purchasing power.
    The law mandates that insurers participating in a Marketplace offer four types of plans meeting certain minimum actuarial standards- Platinum, Gold, Silver, and Bronze-as well as a Catastrophic Plan. Insurers can also sell outside of the Marketplace. is the website for the Health Insurance Marketplace.
  • I don’t have health insurance. Will I have to get it, and what happens if I don’t?
    U.S. citizens and legal residents are required to have qualifying health coverage. Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income. The penalty will be phased-in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016. After 2016, the penalty will be increased annually by the cost-of-living adjustment. Exemptions will be granted for certain situations
  • I want health insurance, but I can’t afford it. What do I do?
    Depending on your income, you might be eligible for Medicaid; Low-income adults, including those without children, are eligible, as long as their incomes didn’t exceed 138 percent of the federal poverty level. 
  • What if I make too much for Medicaid but still can’t afford coverage?
    You might be eligible for government subsidies to help you pay for private insurance through the Marketplace. Premium subsidies are available for individuals and families with incomes between 138 and 400 percent of the federal poverty level. The subsidies are on a sliding scale. For example, a family of four earning 150 percent of the poverty level will have to pay 4 percent of its income on premiums. A family with an income of 400 percent of the poverty level will have to pay 9.5 percent. In addition, if your income is below 400 percent of the poverty level, your out-of-pocket health expenses will be limited.
  • Can I get coverage, even if I have health problems?
    Insurers are barred from rejecting applicants based on health status; insurers can no longer exclude coverage for specific medical problems for adults or children with preexisting conditions, nor can they any longer set annual or lifetime coverage limits.
  • Can I buy a catastrophic health insurance plan?
    People under 30 and people with hardship exemptions (over 30) may buy a catastrophic health plan. A catastrophic plan generally requires policyholders to pay all medical costs up to a certain amount, usually several thousand dollars. Hardship exemptions are granted to some people based on income or other circumstances that prevent them from getting coverage. If your individual insurance plan has been canceled and other plans aren’t affordable, you can apply for a hardship exemption to purchase catastrophic coverage. For more information, visit
  • Does a Third Party Administrator have to be licensed in the State of New Mexico if the entity only handles a limited portion of the claims process?
  • Does an individual applying for a Resident Agent license with a CLU designation have to take the New Mexico Insurance Examination?
  • If a Producer/Agent assigns his commissions to an Agency, does the Agency need to be licensed in the State of New Mexico as well?
  • For an Agency Name Change or Change of Federal ID Number, do you have to make changes with the New Mexico Secretary of State’s Office first prior to submitting paperwork to Agents Licensing?
  • Are Viatical Brokers regulated and have existing license requirements?
  • Does the Life License qualify for Viatical Broker Licensure? Or is there a specific license type?
    Yes, however, if you are not licensed for Life, you must take the Life Examination.
Agent Licensing
  • What is the difference between an Agent and a Broker?
    An Agent represents an insurer and a Broker represents an insured.
  • What is the difference between an Agent and a Solicitor?
    An Agent is sponsored/appointed by an insurer. A Solicitor is sponsored/appointed by an Agent.
  • What is the difference between a Broker and an Adjuster?
    An Adjuster settles claims for an insurer. A Broker represents an insured usually by procuring tailored specific insurance coverages.
  • When are Renewals due each year?
    All Renewals are due by April 1st except for Motor Club Renewals, which are due December 31st.
  • When is Continuing Education due each year?
    All Continuing Education is due by September 30th. This only applies to Resident Agents. Non-Resident Agents are exempt from this requirement.
  • Do Corporations/Partnerships have to register with the New Mexico Secretary of State’s Office prior to being licensed with Agents Licensing?
  • Do Resident Agents switching from a Non Resident license to a Resident license have to take the New Mexico Insurance Examination?
  • Does a Third Party Administrator have to be licensed in the State of New Mexico if the entity only handles a limited portion of the claims process?
  • Does an individual applying for a Resident Agent license with a CLU designation have to take the New Mexico Insurance Examination?
  • If a Producer/Agent assigns his commissions to an Agency, does the Agency need to be licensed in the State of New Mexico as well?
  • For an Agency Name Change or Change of Federal ID Number, do you have to make changes with the New Mexico Secretary of State’s Office first prior to submitting paperwork to Agents Licensing?
  • Are Viatical Brokers regulated and have existing license requirements?
  • Does the Life License qualify for Viatical Broker Licensure? Or is there a specific license type?
    Yes, however, if you are not licensed for Life, you must take the Life Examination.


Company Licensing
  • How do we change the contact person designated to receive any service of process sent to the Superintendent of Insurance on behalf of a licensed insurance company?
    You must complete the NAIC Form 12 (Uniform Consent to Service of Process) and mail it to
    Office of Superintendent of Insurance,
    Company Licensing Bureau
    PO Box 1689
    Santa Fe, NM 87504-1689.
    The form can be found on the NAIC website.
  • If an insurance company amends its Articles of Incorporation or its By-Laws, does it need to file with Office of Superintendent of Insurance?
    All insurance companies that hold a Certificate of Authority issued by Office of Superintendent of Insurance must file a copy of the Amended Articles of Incorporation certified by the state of domicile.
    They must also file a copy of the Amended By-Laws certified by the state official holding custody of the original or by the company’s corporate secretary with the company’s corporate seal affixed to the certification.
    There is a 10.00 filing fee for each amendment in accordance with NMSA Section 59A–6–1B.
    Make check payable to Office of Superintendent of Insurance.
  • If an individual is appointed as a new officer and/or director, does an insurance company need to notify the Office of Superintendent of Insurance?
    Please refer to Bulletin 2015-025 – Biographical Affidavits
  • What is the rating for an insurance company?
    Office of Superintendent of Insurance does not rate insurance companies. However, should you require a rating on an insurance company, you can contact A.M. Best Company, Inc. at (908) 439-2200 Customer Service Department ext. 5742.


Financial Audit
  • What is the NM Insurance Premium Tax Rate?
  • Does New Mexico impose a surtax?
    Yes, health insurers writing medical and hospital expense business are subject to a 1% surtax (NMSA 59A-6-2.C )
  • Does New Mexico impose a retaliatory fee?
    No, Per Bulletin 2009-008 New Mexico will not impose a retaliatory fee.
  • Does my company have to file premium tax returns with the Office of Superintendent of Insurance if we are licensed in New Mexico but do not receive any premium?
    Yes. All companies that are licensed in New Mexico must file premium tax returns with the Office of Superintendent of Insurance whether or not tax is due (NMSA 59A-6-4).
  • What is my “NM Number”?
    Your company number or NM Number was issued with the company’s Certificate of Authority or provided upon renewal.
    You can search the SBS system for the NM number here.
  • How much credit on our premium tax final can our company take for making contributions to the New Mexico Medical Insurance Pool (MIP)?
    Fifty percent (50%) of the assessment may be taken as credit for contributions to Medical Insurance Pool or Seventy-five-percent (75%) for the MIP assessments attributable to pool policyholders that receive premiums, in whole or in part, through the federal Ryan White CARE Act, the Ted R. Montoya hemophilia program at the University of New Mexico health sciences center, the children’s medical services bureau of the public health division of the department of health or other program receiving state funding or assistance.
  • When can we take the Medical Insurance Pool (MIP) credits?
    These “credits” are a deduction to your tax liability, they may be totaled and can only be taken at the year-end on the annual premium tax return only.
  • Is there a credit allowed for contributions made to the Guaranty Fund Assessment?
    No. There are no tax credits/deductions for contributions to the Guaranty Fund.
  • Do all of the premium tax returns have to be received by Office of Superintendent of Insurance on or before the specified due date?
    Yes. OSI will allow an insurance company to file earlier than the due date, however, any filing or payment received after the deadline date will be considered late. Premium tax returns will be made available on the Tritech system on the first of the month of each due date (i.e. Quarter 4 is due January 15th, forms will be made available on January 1st).
  • What is the website to file Premium Tax returns with New Mexico?


Insurance Investigations
  • If I decide to satisfy the financial responsibility requirements of New Mexico by buying auto insurance, what coverages are required in New Mexico and what are the minimum limits I can purchase?
    The required coverages in New Mexico are Bodily Injury and Property Damage. The minimum required limits are $25,000 per person and $50,000 per accident for Bodily Injury and $l0,000 per accident for Property Damage.
  • What is the difference between Uninsured and Underinsured Motorist coverage’s?
    Uninsured Motorist coverage protects you and your passengers in your vehicle for bodily injury you or your passengers sustain in an accident invoking a driver who has no liability coverage.
    Underinsured Motorist coverage protects you and your passengers in your vehicle for bodily injury you or your passengers sustain in an accident involving a driver who has insufficient insurance to cover the injuries of your or your passengers.
  • I filed a death claim on my spouse’s life insurance policy two months ago, and the claim has not been paid. How long does it take to receive the death benefits and does the insurance company have to pay interest on the money they owe me?
    Generally, death claims are paid within 30 days after the insurance company has received all the necessary forms. If a policy is less than two years old, the insurance company can investigate to find out if there was any significant misrepresentation on the original application. If there is an investigation, the claim may take longer to process. Usually, the insurance company will pay interest on the death benefits if the claim is not paid within 30 days of the filing. In most cases, the interest will be calculated at 12 percent.
  • What is the difference between a cancellation and a non-renewal?
    A cancellation happens in the middle of the policy period. A non-renewal takes place at the anniversary or renewal date of the contract. Unlike cancellation, a company may non-renew a contract based upon underwriting criteria. Underwriting criteria are those specific requirements written into the company’s program. For example, a claim frequency may be used by many companies to cancel a policy, and cancellation or non-renewal of an auto policy both result in termination of a contract.
  • What it a burial policy?
    A burial policy is a form of a whole life that pays burial and funeral expenses only. The benefits of this policy are used for funeral expenses.
Life and Health
  • If I want to research insurance laws, where do I gain access?
    Access Chapter 59A – Insurance Code, of the New Mexico Statutes (NMSA) here.
  • I am a Federal Employee. Does the federal employee health plan have to provide coverage or other benefits required by New Mexico state law?:
    No. The federal employee health plan is subject to federal law and not New Mexico State law, as provided by Title 5, United States Code §8914, Government Organization and Employees.
  • I am a Self-Insured. Does my health plan have to provide benefits required by New Mexico state law?
    No, Self-Insured plans are regulated by federal law.
  • How would I request copies of public records?
    Submit a Request for Public Records forms by fax to 505-827-4734 or by mail to:
    Office of Superintendent of Insurance
    OSI Public Records Custodian
    P.O. Box 1689
    Santa Fe, NM 87504
  • My health insurance is not paying my medical claims, what do I do?
    If your insurance company initially denies a medical claim, you have a right to appeal their decision. Under federal law, you are entitled to an “internal appeal” and an “external review.” In both instances, the insurance company must re-visit their decision to deny the claim and provide you with a clear, impartial justification for their decision. The appeals process can be confusing contact The Managed Health Care Bureau for additional information. 
  • Does the Office of Superintendent of Insurance regulate Long Term Care Insurance?
    Yes, Long-Term Care Insurance is coverage for the assistance you may need when you are not able to do some of the basic “activities of daily living” (ADL’s) like bathing, dressing or moving from bed to chair. Such insurance sold in the state of New Mexico is under the jurisdiction of OSI. 
  • What happens to old or lost life insurance policies?
    Life Insurance Policy Locator Service
  • If I apply for a loan am I forced to purchase credit life and disability insurance?
    No. A provision in the New Mexico Administrative Code protects borrowers and purchasers from being required to purchase insurance as a condition of receiving a loan. 
  • I’m a senior citizen and I need help in selecting insurance, who can I call?
    Contact the State Agency on Aging and Long-Term Care Services at this link or Toll-Free at 1-800-432-2080 
  • How do I know if I qualify for Medicare or Medicaid?
    For Medicare inquiries, contact the Medicare hotline 1-800-638-6833.
    For Medicaid inquiries, c
    ontact the Human Services Department’s Medical Assistance Division (HSD-MAD) at (505) 827-3100 or toll-free 1-888-997-2583 for instructions. HSD is the single state Medicaid agency and the appropriate contact for Medicaid eligibility issues.
  • What Medicare supplement plans offer Prescription Drug Coverage?
    Plans H, I and J.
Managed Healthcare
  • What is a managed care organization?
    A company that offers a health plan that includes a network of providers and utilization review.
  • In completing the application, I noticed that I needed to choose a primary clinic or provider. What does that mean?
    As a member of a health maintenance organization (HMO), you will choose a provider or clinic that is primarily responsible for managing your health care. Whenever you need health care services, you will normally first contact your primary provider or clinic. In most cases, the provider or clinic that you have chosen will meet your health care needs.
  • What happens if I need emergency care?
    If you need emergency care, most plans will allow you to go to the nearest provider. If you need immediate care, which is not life-threatening, you may be required to go to your participating provider. You should always contact your primary care physician or health plan as soon as possible if you need emergency care.
  • Does it matter if the specialist to whom I am referred is a plan provider?
    Yes. Most managed care plans will require you to see a specialist who is a plan provider if one is able to provide the services you need.
  • My primary care provider referred me to a non-plan provider. Do I have to contact the insurance company before my appointment?
    Yes. Most managed care plans require a referral to a non-plan provider be authorized by the HEALTH PLAN before the appointment. Your primary care physician submits the referral request to the HEALTH PLAN for you.
  • Will I incur any liability if I fail to follow the pre-authorization requirements?
    Yes. If you fail to follow the required pre-authorization procedures, you may be required to pay a larger portion of the claim. In some cases, the health plan may determine that the service is not covered under the contract and completely deny the claim.
  • What is a drug formulary?
    Many managed care organizations establish a list of prescription drugs that the plan considers medically appropriate and cost-effective. This formulary often requires a generic form of a drug to be used unless there is a valid medical reason to use a drug, not on the formulary.
  • What if I have a complaint?
    You should contact your health plans consumer assistance department and/or the Managed Health Care Bureau. Many problems can be resolved on an informal basis or you can file a written grievance. All managed care organizations are required to have a grievance procedure. This procedure is explained in your member handbook. Grievances are generally resolved within 20 days. If you believe your medical condition needs immediate attention, you may wish to ask that the grievance be considered an expedited review. You may submit a complaint form with the Office of Superintendent of Insurance at any time during the grievance procedure.
  • How do I select a managed care plan?
    Before you make a selection, carefully compare the plans available in your area. Think about what is most important to you in a health plan: low cost; availability of a specific physician, clinic, or hospital; or convenient location of facilities. If you like the physician you are currently seeing, check to see if he or she is a provider in the plan you are considering. If you or a dependent has special medical needs, check that the plan you are considering has adequate medical services and providers for that specialty.
  • My doctor is billing me for services rendered. However, I am a member of an HMO, and he is one of their approved physicians. Can he do this?
    Whenever a contract exists between an HMO and a provider, the HMO shall be liable for those fees, not the subscriber. No provider of services shall collect or attempt to collect any money from the subscriber for services that are covered by the HMO.
  • How can I become an informed insurance consumer?
    Review your member handbook, noting what is and isn’t covered and identify your family’s needs. This may include specific medications they take, allergy treatments, physical therapy, well-child examinations, immunizations, etc. Review the coverage and benefit limits associated with each type of treatment. Find out if any of these services require a referral to a specialist or prior authorization. Locate the grievance section of your member handbook; know your rights in having service denials reviewed. Talk to your insurance company’s customer service department about any questions you may have.
  • My plan is a health maintenance organization (HMO). How do I select a primary care provider (PCP)?
    Call your plan to find out if your existing doctor is eligible to be your PCP; request a list of participating doctors from your insurance company, if you do not have an existing doctor or you need to select a new one. Talk to friends, co-workers, or neighbors about their doctors. Contact the medical society and hospitals for a listing of physicians accepting new patients in your area. Find out if any of these doctors participate with your insurance company; call the physician’s offices to verify that the physician will accept you as a patient. Talk to the receptionist about office policies. Find out office hours, how urgent situations are handled, how long it will take to schedule an appointment, and what hospitals the doctor will send you to. Once you have selected a physician, be sure to notify your insurance company.
  • What if I don’t like my new primary-care provider (PCP)? Can I change to a different doctor?
    You can change your PCP at will. You will need to notify your insurance company of the change. Refer to your member handbook or call your insurance company for additional guidelines.
  • Can I select my obstetrician/gynecologist (OB/GYN) as my primary care provider (PCP)?
    You may select a participating OB/GYN as your PCP if he or she has a contract with your insurance company to provide primary care.
  • What can I do if my doctor says I need a medical procedure and my insurance company says it’s not medically necessary?
    You have the right to request a copy of any utilization-review policy and procedures your insurance company uses to determine medical necessity for your medical condition. You have the right to file a grievance requesting reconsideration. Consult your doctor and submit any additional important information with your grievance.
  • My doctor received prior authorization for a surgery that I had. Now my insurance company is denying my claim.
    Find out specifically why the claim was denied. You should exercise your grievance rights once you know why the claim was denied. You also have the right to seek assistance from the Office of Superintendent of Insurance by filing a formal complaint.
  • If I need to see a specialist, where would I go?
    Depending on your particular need, your primary provider would refer you with a written referral to the specialist that best meets your need. However, referrals outside of the HMO’s provider network are strictly regulated. Check with your HMO for information concerning referral requirements and procedures.
  • Will an HMO cover dependent children who are full-time students living away from home?
    Non-emergency coverage will be provided only if the HMO’s service area includes the community in which the student resides. Emergency or urgent care services are covered wherever they occur. Outpatient mental health services and treatment of alcohol or drug abuse may also be covered in certain cases. Contact your HMO for more information.
  • Will the HMO cover treatment when I travel out of the service area?
    Emergency or urgent medical problems that need immediate attention will be covered out of the service area. Appropriate medical services should be sought from the nearest clinic or hospital. If more than one visit of hospitalization outside of the service area is required, the HMO office should be contacted for approval as soon as possible. When you return home, your HMO provider, if necessary, will provide follow-up care.
  • How do I file a claim?
    Most of the services provided by an HMO do not require the filing of claim forms. If you encounter problems, contact your HMO or you may fill out this complaint form and send it to our office.
Property and Casualty
  • Why are car insurance rates higher for young men than for young women?
    Young male drivers generally do pay more than young females for auto insurance. Insurance companies use statistical evidence to determine which groups, such as young male drivers are most likely to have accidents and file claims. Statistics show that drivers under age 25, particularly males, are much more likely to be involved in accidents: 15% of all licensed drivers are under age 25, yet this group accounts for 29% of all accidents, and about 26% of all fatal accidents. The accident rate is much lower for young female drivers, so they are charged less for auto coverage.
  • I work part-time delivering pizza. Does my regular auto insurance cover me while I am working?
    Most personal auto policies exclude coverage when the automobile is used to carry the property for a fee. Some companies have denied claims based on this exclusion. Before agreeing to use your car for business purposes, find out what your insurance covers.
  • Is it better to keep my auto insurance with the same company as my homeowner’s policy?
    Some companies offer discounts when you have automobile and homeowner’s insurance with them. The company may cover the house, auto, boat, etc., all under one policy. However, there may be situations where you can save money by spreading your coverage among several companies. It is your choice. Please shop carefully for all of your insurance needs.
  • My agent gave me a quote but the insurance company is charging me a higher premium than we originally discussed. Must the company honor the agent’s quote?
    No. A quote in the insurance market represents an offer to sell an insurance contract subject to compatibility of that offer with the carrierís filings with this department. An Insurance Company may not collect a premium for less than or more than this amount. A
    the carrier may also find other information, such as information from a motor vehicle report, which would revise the premium from the original quote.
  • What can I do if I have a complaint in general regarding my auto insurance?
    You should first attempt to resolve your concerns with your agent or insurance company. However, if you believe you have been treated unfairly, have received poor service, or have some other complaints against your insurer or its agent, you may wish to file a formal complaint with the Consumer Assistance Bureau who will investigate the facts of the complaint and determine if any of the New Mexico statutes or the New Mexico Insurance Code have been violated. If the Consumer Assistance Bureau identifies a possible violation, they will advise the Superintendent of Insurance who will review the facts for possible enforcement action.
  • Why should I buy auto insurance?
    Before you can register a vehicle in New Mexico, you must show proof of financial responsibility. This is usually done by the purchase of an automobile insurance policy.
  • If I decide to satisfy the financial responsibility requirements of New Mexico by buying auto insurance, what coverages are required in New Mexico and what are the minimum limits I can purchase?
    The required coverage in New Mexico are Bodily Injury and Property Damage. The minimum required limits are $25,000 per person and $50,000 per accident for Bodily Injury and $10,000 per accident for Property Damage. It is also required that Uninsured Motorist Coverage be included in the policy but if you decide you do not want this coverage, you must reject it in writing.
  • I have not had any accidents or violations, so why do my auto insurance premiums continue to increase?
    An insurance company’s premium increases are a direct reflection of the countrywide or statewide pool of losses that the insurance company experiences. The losses of the few within the insurance company’s pool of policyholders are paid for by all policyholders within the pool. This is the basic premise upon which the concept of insurance is based and without which no insurance would be available. This does not mean that your own favorable loss experience cannot be recognized. Various insurance companies give
    numerous discounts to policyholders, which recognize their excellent driving records.
  • What is covered under Bodily Injury coverage?
    This coverage pays for bodily injury to others for which you become legally responsible due to an auto accident in which you were involved. It does not pay for bodily injury you may sustain. You would need to have Medical Payments coverage in order to have the
    injuries you sustain in an auto accident covered under your own auto policy.
  • Does Property Damage coverage provide coverage to fix my vehicle if the other driver is at fault and has no insurance?
    No. Property Damage coverage protects you for damage you may cause to the vehicles or property of others. You would need to purchase Collision coverage on your auto policy in order to have coverage to repair or replace your vehicle in this situation.
  • Will my policy provide coverage if my teenage son, who does not have a license yet, or a relative from out of town, drives my car and has an accident?
    Whenever you give your permission, anyone who drives your vehicle, as long as that person is not specifically excluded and holds a valid driver’s license or permit, will be covered under your policy, but you need to review your policy to see what situations are included or excluded. We suggest reviewing your policy with your agent to ensure you have the coverage you require. 
  • What coverage is provided if I pull a trailer with my vehicle?
    In most cases, if the vehicle pulling the trailer is covered under the policy, the liability coverage will be extended to the trailer if you own the trailer. However, Physical Damage (comprehensive or collision) must be purchased separately. You will need to review your policy for exceptions.
  • What coverage is provided by my policy if I buy a vehicle to replace an existing vehicle on the policy during the policy term?
    If you replace your previously covered vehicle with a private passenger auto, pickup or van, it will normally have the same coverage as the vehicle it replaced. In most cases, you will need to notify the insurance company or agent within a specific time limit to add the new vehicle to your policy. We suggest you check your policy to determine the time limit available to you. You should contact your agent if you are unable to locate the specific language in your policy.
  • Is there any coverage provided if I buy an additional vehicle during the policy term?
    Policies may extend the coverage for a newly acquired vehicle you add to your existing policy. We suggest you check your policy for the additional vehicle and contact your agent to ensure you have coverage before taking possession of the vehicle.
  • Will my New Mexico personal auto policy provide coverage if I drive my vehicle into Mexico?
    Mexican law requires that you purchase separate liability coverage from a Mexican insurer before operating your vehicle in Mexico. Your New Mexico personal auto policy may provide some limited coverage on a limited basis (within 25-50 miles of the Mexican border); however, this coverage does not meet the insurance requirements of the Republic of Mexico. Failure to purchase proper Mexican liability insurance may result in many hours in a Mexican jail or a heavy fine if you are involved in an accident while operating your vehicle in Mexico. Check with your company or agent to determine the coverage available under your specific policy. 
  • What is covered under Comprehensive coverage?
    Some of the coverage provided under Comprehensive include theft of all or part of the vehicle, glass breakage, and damage due to fire, windstorm, hail, water, falling objects, vandalism, explosion, or hitting a bird or animal.
  • What is covered under Collision coverage?
    Collision coverage pays if your auto collides with an object, including another car, or if it overturns. Your insurer will pay to repair this damage even if the collision is your fault.
  • Is there any reason why I should carry higher than minimum liability limits?
    If you have assets you need to protect, you may want to carry higher than minimum liability limits to protect yourself from lawsuits by a person or persons you may injure in an accident. 
  • How is the deductible for Comprehensive or Collision coverage applied?
    The deductible for Comprehensive or Collision applies to each loss that occurs to your vehicle. A deductible is the dollar amount you will have to pay toward the loss before the insurance company begins to make payments on the loss. 
  • To whom do I pay the deductible if I have a Comprehensive or Collision loss?
    In most cases, you will pay the deductible to the repair facility. 
  • Will my minimum limit New Mexico policy protect me if I drive to another state that requires higher minimum liability limits?
    Your New Mexico policy limits will be interpreted to provide at least the minimum limits required by the laws of the state in which you are operating your vehicle.
  • Will my personal auto policy provide coverage if I use my vehicle for business purposes?
    Insurance companies may provide coverage for business use vehicles depending upon the type of vehicle and its particular use in business, but you may need to purchase a commercial auto policy to receive the coverage you need. You should consult with an insurance company or agent to determine the proper policy needed.
  • Will my personal auto policy provide coverage if I use my vehicle as a carpool vehicle?
    If you are in a share-the-expense car pool, your policy may provide the same protection as if you did not use your vehicle in a carpool. We suggest you review your policy for specific coverage.
  • If I go on vacation and rent a vehicle, will my New Mexico auto policy provide coverage while I am driving the rental vehicle or must I purchases coverage from the rental company?
    If you vacation within the United States (and in most cases Canada), for liability coverage, the policy carried by the rental company will be primary (pay first), and your policy will be secondary (pay second). For physical damage to the rental vehicle, some companies insurance allow the broadest coverages you have under your comprehensive and collisions coverages to apply to the rental vehicle, subject to the deductible stated in your policy. Before renting the vehicle, you should check with your insurance company or agent to determine if your coverage applies to the rental vehicle. New Mexico requires your insurance policy act as the primary in New Mexico.
  • Will my New Mexico personal auto policy provide coverage if I drive my vehicle into Canada?
    Most New Mexico personal auto policies will provide coverage for driving in Canada, but you should review your policy or contact your insurance company or agent before driving into Canada to determine if your coverage applies in Canada. 
  • What is covered under Medical Payments coverage and to whom does the coverage apply?
    You will need to read your policy for a complete description of the coverage provided. Basically, Medical Payments coverage provides coverage for necessary and reasonable medical and funeral expenses incurred as the result of an automobile accident up to the
    policy for you or passengers in your vehicle.
  • If I already have health insurance, do I need to carry Medical Payments insurance on my auto policy?
    Even though you have major medical insurance, you may still wish to carry some medical payments insurance to cover deductibles and co-payments, which are not covered by your health insurance plan.
  • What is the difference between Uninsured and Underinsured Motorist coverage?
    Uninsured Motorist coverage protects you or passengers in your vehicle for bodily injury you or your passengers sustain in an accident involving a driver who has no liability coverage. Underinsured Motorist coverage protects you or passengers in your vehicle for bodily injury you or your passengers sustain in an accident involving a driver who has insufficient insurance to cover the injuries of you or your passengers. There is a mandatory $250 deductible required for this coverage.
  • If everyone in New Mexico is required to purchase liability coverage, why do I need Uninsured Motorist coverage?
    Although the law requires all motorists in New Mexico to carry liability insurance, not all New Mexico motorists have liability coverage in force. Also, motorists may come into New Mexico from other states or countries and not have liability coverage on their vehicles. 
  • What does Rental Reimbursement coverage provide, and does it provide coverage if I take my vehicle to a shop for mechanical repairs?
    Rental Reimbursement coverage provides a specified amount for you to rent a vehicle while your covered auto is being repaired or replaced after it has been damaged because of a loss covered under Comprehensive or Collision. In most cases, Rental Reimbursement does not provide coverage for mechanical repairs that result from a mechanical breakdown that is not related to a covered loss.
  • If I borrow a car from a friend or relative for a short time while my vehicle is being repaired, will my policy cover me while I am driving the borrowed car?
    The policy covering the vehicle would be primary and in most cases, your policy would cover the vehicle on an excess basis. If no policy covers the borrowed car, most companies will treat your policy as the primary coverage for the borrowed car.
  • What do you mean by primary and excess basis?
    Primary means that policy will provide coverage first and excess means that policy will provide coverage after the limits of the primary policy have been exhausted.
  • If I rent a truck to move my personal property, will my personal auto policy provide any coverage for the rental truck?
    No. Most personal auto policies do not provide any coverage for the rental truck.
  • If my vehicle was damaged in an accident that was not my fault, how can I recover my deductible?
    If the negligent individual carried liability coverage, you or your carrier can recover your deductible from the negligent driverís insurance company. If you filed the claim directly with the negligent partyís carrier, no deductible will apply.
  • If my vehicle was stolen along with some personal items which were in the vehicle at the time. Does my auto policy provide any coverage for the personal items?
    Most policies do not provide coverage for personal items left in a vehicle. 
  • What coverage is provided by my policy if I buy a vehicle to replace an existing vehicle on the policy during the policy term?
    If you replace your previously covered vehicle with a private passenger auto, pickup or van, it will normally have the same coverage as the vehicle it replaced. In most cases, you will need to notify the insurance company or its agent within a required time limit after purchasing a different vehicle. 
  • Is there any coverage provided if I buy an additional vehicle during the policy term?
    Most policies extend the coverage for an auto you already have on your policy to an additional vehicle.
  • What is the Fair Market Value and how is it determined?
    In most cases, the insured utilizes a vendor who specializes in determining the fair market value of a vehicle. The fair market value is the normal price that your vehicle would sell for prior to the accident. You can research the fair price of your value by contacting dealers to determine what they would list the price of your vehicle. The insured should compare your vehicle to others of the same year; type, condition, and mileage in determine the fair market value. If you are not sure of how the insurance company arrived at their amount you can contact them and ask they provide you with that information. If you are unable to obtain this information, you may contact our Consumer Assistance Bureau for assistance.
  • What are the reasons for which my policy can be canceled?
    New Mexico law permits the policy to be cancelled for the following reasons:
    1. Non-payment of premium.
    2. The insurance was obtained through fraudulent misrepresentation.
    3. You or anyone who customarily operates your vehicle has:
    a. Has had his or her driverís license suspended or revoked during the policy period.
    b. Becomes permanently disabled and does not produce a certificate from a physician testifying to such person’s ability to operate a motor vehicle.
    c. Is or has been convicted during the thirty-six months immediately preceding the effective date of the policy or during the policy period of:
    1. Criminal negligence, resulting in death, homicide or assault, arising out of the operation of a motor vehicle.
    2. Operating a motor vehicle in an intoxicated condition or while under the influence of drugs.
    3. Leaving the scene of an accident.
    4. Making false statements in an application for a driver’s license.
    5. Reckless driving.
    4. The insurance company is placed in rehabilitation or receivership.
    5. The insured vehicle which is rated as a private passenger auto is used regularly and frequently for commercial purposes.
    6. The director of insurance determines that the continuation of the policy would place the insurer in violation of the laws of New Mexico or would jeopardize the solvency of the insurer.
    7. Non-payment of premium.
  • Other than my driving record and type of car, what other factors do insurance companies use to determine my premiums? Do all insurance companies look at the same things?
    Most insurance companies look at driving records, type of car, use of vehicle, location of the vehicle, and age of the driver.
  • What happens if I’m in an accident with someone who doesn’t have coverage, and the other driver is at fault?
    To protect yourself in the event you have an accident with one of these illegal motorists, you can purchase uninsured motorists overage. You will be paid for damages just as if the other driver was covered. There is, however, a mandatory $250 deductible with this coverage.
  • I recently purchased a new car. When I applied for the loan, I was told I would have to purchase comprehensive and collision on the new car, as well as what’s required by law. Is this legal?
    It is not unusual for a lender to require comprehensive and collision on a new vehicle. Your new car serves as the lender’s collateral, so it is in the lender’s interest to have it financially protected in case of accidents.
  • When I was buying my auto insurance, my insurance agent said I was with a “nonstandard” insurance company. What is a “nonstandard” company?
    A “non-standard” automobile insurance company should write auto insurance for those drivers who have difficulties in obtaining insurance through normal means. Nonstandard companies generally charge higher premiums.
  • My homeowner’s estimate says I should get paid $2500 but my check isn’t for the whole
    amount. What does the “holdback” amount mean?
    The holdback amount is repair or replacement minus actual cash value. According to your contract, your company will pay no more than the actual cash value of the damage until actual repair or replacement is complete. At that time, the insurance company will issue the second check to cover your loss. This loss settlement provision can be found under Section 1–Conditions of your homeowner policy.
  • I borrowed my neighbor’s lawn mower. While using it I struck an object and damaged the mower. Will my homeowner’s policy help pay for it?
    The liability coverage section of most homeownerís policies excludes coverage for property not owned by you but in your care, custody, or control. However, a provision in the Additional Coverage’s section of the contract does give back limited coverage specifically for damage to property of others. Generally, the amount of coverage is provided at a $500 or $1,000 limit. In addition, there is no deductible applied to this type of claim.
  • I rent my apartment. Is it necessary to have renter’s insurance?
    You should consider purchasing a renter’s policy, which will cover the contents of your apartment. If you have valuable items such as jewelry, antiques or artwork, it may be advisable to have these items scheduled separately.
  • I am shopping for a house. What do I need to know about homeowner’s insurance before I buy?
    There are two parts to a typical homeowner’s policy:
    (1) Contents converge protects your personal items and the contents of your home.
    (2) Dwelling coverage protects the structure and most cases any unattached buildings. 
  • I recently installed smoke alarms on all levels of my home. Am I entitled to a discount on my homeowner’s policy?
    Most insurance carriers offer discounts for several features, one of which may include smoke alarms. The amount of reduction varies from company to company. You may be able to get an insurance discount and have a safe home for your family as well.
  • Are there any types of discounts required in New Mexico on a Homeowner’s policy? New Mexico requires a 10% discount be provided when you have an operable electronic burglar alarm installed in your home. A 5% discount is also available when you have wrought iron bars on all doors and windows.
  • What is a Homeowner’s Insurance?
    Homeowner’s insurance is coverage for your home, contents, and your personal liability.
    A homeowner’s policy usually covers:
    property damage to your home and other detached buildings.
    contents and personal belongings.
    reimbursement for your additional cost to live at another place if your home is damaged and uninhabitable.
    personal liability to protect you from a claim or lawsuit if you are responsible for injuries to others or damage to their property.
  • As a result of rain and hail storm, we have a hole in our roof. If I get the roof patched before the insurance adjuster comes to see it, will the insurance company still pay for the actual repair of the roof?
    Yes. It is your responsibility to protect the roof from further damage until the insurance adjuster can determine the extent of the loss. In order to get reimbursed for these expenses, you should keep receipts to submit to the insurance company.
  • What is usually not covered?
    Most homeowner’s policies will not cover vehicles or vehicle stereo equipment, or losses from a natural disaster such as flooding, earthquakes or nuclear accidents. You can usually buy coverage for these things in a separate policy.
  • What Is The Difference Between Actual Cash Value and Coverage and Replacement Cost Coverage?
    New Mexico requires your homeowner’s policy to provide replacement cost coverage for your dwelling up to the policy limit. Your contents and personal belongings are settled at their actual cash value at the time of the loss unless your purchase replacement cost coverage for your contents. This is replacement cost less deduction for depreciation. Some policies will offer replacement cost coverage, which will repair or replace personal property at current prices with no reduction for depreciation. You can usually upgrade your policy to replacement for an additional charge.
  • If my home were destroyed by a disaster, would my homeowner’s policy cover my furniture and belongings?
    Yes. However, if you want to protect the contents of your home at full value, you must purchase replacement cost coverage. Making an inventory of your property prior to a loss is strongly suggested. Using photographs and a videotape can be helpful. If you have any unique items, you may choose to insure these items specifically. Policies will normally cover content at actual cash value; however, most companies have a replacement cost option. Theft following a disaster will impose low monetary limits on money, jewelry, furs, silverware, guns, etc. Higher limits may be purchased. To make sure you have adequate coverage, we suggest you review your policy with your agent. Reduce any time period applicable to a pre-existing condition waiting period for the time covered by qualifying previous coverage. The coverage must have been continuous for at least sixty-three days before the effective date of the new coverage.
  • Do you have information on Flood Insurance?
    Floods can happen at any time and anywhere. But the Flood Disaster Protection Act of 1973 helps ensure that you will be protected from financial losses caused by flooding. Backed by the U.S Government, flood insurance is available to residents in more than 18,000 communities across America that participates in the National Flood Insurance Program (NFIP). At a time when flooding causes more than $2 billion in property damage each year, you cannot afford to think that it will never happen to you. It can happen, and often when itís least expected. You may contact the Flood Insurance Plan at 1-800-427-2354. Losses due to flooding are not covered under most homeowner’s policies. You can, however, protect your home and its contents through the NFIP, if your community is participating in the program. To become eligible, a community first enters the emergency phase of the NFIP by adopting preliminary actions to reduce the flood threat. Everyone in that community can then apply for limited amounts of flood insurance at federally subsidized rates. Much higher levels of insurance become available when a community qualifies for the regular program phase. This occurs after the Federal Emergency Management Agency (FEMA) has conducted a detailed flood study, and local officials have enacted more stringent measures to safeguard life and property from future flooding. To find out more about flood insurance and whether your community is eligible, ask any licensed property/casualty agent or broker-the same person who sells you your home and auto policies. Flood insurance coverage is an asset to you as a borrower. It reimburses you for financial losses from flood damage. With one annual premium, you have peace of mind that your losses will be covered.
  • When does the policy take effect?
    Most flood policies require a 30-day waiting period between the time the policy is purchased and the coverage is in force.
  • How do I know when Flood Insurance Coverage should be purchased?
    Flood insurance is required by law for all federally insured or regulated lenders for mortgages and other loans on buildings and manufactured (mobile) homes when located in special flood hazard areas. However, you may opt to purchase flood insurance for
    your own protection even if the law does not require it.
  • Will I be reimbursed for taking preventive measures against flood?
    Preventive measures to reduce flood damage to an insured building are often reimbursable. Policyholders may have a limited amount of coverage to recover the cost of removing insured contents from a building that has been declared in imminent danger of flooding by community officials.
  • Do I need flood insurance? What is covered, and where can I buy it?
    Present day homeowners insurance policies do not include loss due to flood-related water damage. In fact, most contracts specifically exclude coverage for floods or rising waters. Insurance companies have not looked favorably on insuring against loss due to floods because it is extremely difficult to predict when the loss will occur and how big the loss will be. Premiums to cover such an unpredictable loss could be very high. During a period of drought, people are unwilling to pay significantly more for homeowners insurance to cover loss due to floods. Federal flood insurance is available in cities, counties, or townships that participate in the National Flood Insurance Program (NFIP) and can be purchased through any licensed property/casualty insurance agent. Depending on the level of protection purchased, coverage can include:
    ï Structural elements (walls, floors, equipment)
    ï Content (furniture, appliances, carpeting)
    ï Personal items (clothing, stereos, televisions)
    ï Basement cleanup expenses and items such as furnaces, water heaters, elevators
    ï Seepage is not covered in most cases
    If you are contemplating purchasing flood protection, it is important to know that there is a 30-day waiting period from the time of application. You should review your policy with your agent and talk about the type of water damage coverage they presently have and what coverage, including federal flood insurance, may be available.
  • What is “Policy”?
    The insurance contract is called a policy and includes three distinct parts. First, the Declaration Page that lists what coverage is in effect and the dollar amount of coverage. Secondly, the Text of the contract that tells you who and what is covered and not covered. Thirdly, the Endorsements section of the contract that changes or modifies the policy.
  • Who does the contract cover?
    The personal auto policy provides coverage to the named insured, spouse and other relatives residing at home, as well as anyone to whom the named insured, has given permission to operate the vehicle.
  • When can a company cancel my contract?
    Once an auto policy has been in force for sixty days, the insurance company may only cancel the policy for the following reasons:
    ï Nonpayment of premium.
    ï If the license or registration of the named insured or any other operator has been suspended, rescinded, canceled or revoked during the period.
    ï Fraud or material misrepresentation by the insured in applying for the policy, or in presenting a claim under the policy.
    ï The insured motor vehicle is mechanically defective.
    ï The named insured moves to a state where the insurer is not licensed to do business.
    ï Failure to pay membership dues or fees to an association when it is a prerequisite to obtaining the insurance coverage.
    The notice of cancellation must be given at least 30 days prior to the effective date of the cancellation with the exception of the nonpayment of premium, which can be a 10-day notice. The notice must be sent to the insuredís last known address.
  • What if I don’t pay my premium by its due date?
    Unlike health insurance policies, property and casualty policies, including auto policies, do not have a required grace period. The premium is due, in the hands of the company, on the date identified on the billing. If the premium is not received by that date the policy automatically terminates. Some companies voluntarily allow grace periods without a lapse in coverage. There are some companies, however, that does not permit a grace period in which case they may or may not reinstate a policy effective the day the premium is received.
  • What is the difference between a cancellation and a non-renewal?
    A cancellation happens in the middle of the policy period. A non-renewal takes place at the anniversary or renewal date of the contract. Unlike cancellation, a company may non-renew a contract based upon underwriting criteria. Underwriting criteria are those specific requirements written into the company’s program. For example, claims frequency is used by many companies. A cancellation or non- renewal of an auto policy both result in termination of a contract.
  • What factors determine what my auto insurance will cost?
    Auto insurance premiums vary considerably depending on risk, coverage and vehicle type. Generally, premiums are based on  The amounts and types of coverage you buy. The higher the limits and the broader the coverage, the more you pay. Your driving record. Persons with no accidents or violations will pay less. Your age, sex, and marital status. For example, young, single male drivers generally pay more than any other group. Where you live. The state is divided into territories for rating purposes. Generally, people in metropolitan areas pay more than those in less congested areas. How you use your car. The more you drive, the more you pay. The type of car you drive. It costs more to repair some cars than others and companies charge accordingly. Your credit history. Consumers with a poor credit history (financial stability score) may pay a higher premium than a consumer with a good credit history.
  • How do companies determine what rates to charge the consumer?
    When you buy insurance, you receive financial protection in case you become involved in an accident. Therefore, the insurance company must charge rates that will allow them to pay losses and operating expenses (with a reasonable amount for profit). In order to do this, the company uses statistical information to calculate the expected loss cost per vehicle. The company then adds to this its operating expenses and profits to arrive at a final rate.
  • Do companies give any discounts?
    Discounts can make a big difference in the price you pay. You qualify for discounts by doing things that make you more attractive for the company to ensure: driving safely, buying a car with safety equipment, etc. Company discounts may include good student discount, accident-free discount, anti-theft device discount, defensive driving discount, and airbag or antilock brake discounts. Many of the safety discounts are built into the rating of your particular vehicle so a separate discount wonít be given. New Mexico has a mandatory 20% discounts for individuals age 55 and older who have completed a motor vehicle accident prevention course approved by the traffic safety bureau of the state highway and transportation department.
  • If I have an accident, will my rates go up?
    Each company generally adds an additional surcharge for accidents for which you are determined to be responsible. The law requires a company to disclose itís underwriting and rating procedures applicable to accident surcharges and loss of discounts before or at the time of issuance of a policy. Surcharges cannot be assessed as a result of a comprehensive coverage claim, when your vehicle was legally parked when the damage occurred, or when a claim has been paid on a rental vehicle coverage claim. In most instances, the surcharge will remain on your policy for a three-year period. The surcharge will not be added midterm but will be added at the next renewal.
  • Can a company require me to pay a fee in addition to the rate?
    In some cases, membership in an organization gives you access to an insurance company underwriting that group of individuals. In that case, the dues or fees to that organization may be a prerequisite to obtaining the auto insurance.
  • Why does the company include all licensed drivers in my household when rating my policy?
    Motor vehicle liability insurance is mandated by law. Court cases have determined that this obligation extends to all family members in the household. This means that the insurance company would be required to provide coverage in the event of a claim. Therefore, the company rates for all potential drivers. Unfortunately, one bad driver in the household can negatively impact the rates for the rest of the family. The only time a company will not rate a licensed driver in your household on to your policy is when that individual holds their own in force policy.
  • Why are the rates for young drivers so much higher than adults?
    Insurance rates are based upon statistics. Traditionally, the less experienced drivers have shown significantly higher losses resulting in higher rates. Your premiums may not be affected when your teen gets a learnerís permit but will increase when a driverís license is obtained. Check with your agent or company to find out when the teen has to be added to your policy and a new premium charged.
  • Can an insurance company exclude a driver from my policy?
    The law permits an insurance company to issue a policy with driver exclusion. The law also allows the company to issue a policy with minimum limits of coverage for a specified driver while maintaining higher limits for all other drivers. A company is not required to exclude a driver but may do so according to its underwriting program.
  • Is there anything I should be aware of before switching companies?
    When you make an application for insurance to a new company, by law, they have a right to underwrite your application. If you do not meet their underwriting guidelines, the company may cancel your coverage within the first 60 days for their underwriting reasons. Therefore, any recent change in driving records or claims history could result in cancellation.
  • How can a company charge more premium than the agent quoted me?
    There are many different factors involved in rating a policy including driving record, claims history, age, and type of vehicle, etc. The agentís quote is an estimate based on the information you provide. The actual premium is determined by the company after reviewing all the information including Motor Vehicle Reports and claims reports. When shopping, it is important that all questions are answered truthfully and completely including any traffic tickets or accidents. The wrong information may result in an incorrect price quotation and/or rejection of your coverage. Remember, the actual premium may be more or less than the quoted estimate.
  • What is a financial stability rating score (credit score)?
    Statistical and insurance companies in recent years have begun to use a formula to read your credit history (report). The formula generates a single number, generally between 0- 999, which is known as your credit score. The score is referred to by some companies as a financial stability rating score.
  • Why is a “credit score” used in rating auto insurance?
    Statistical and insurance companies have done an analysis comparing individual credit scores with insurance loss history, and claim to have found a significant correlation between the two. This information is claimed to be predictive of future loss experience thus making it a useful tool for companies to use in matching drivers to a proper premium level.
  • Do all companies have the same standards for writing an insurance policy?
    No. There are three basic markets when writing automobile insurance: non-standard, standard and preferred. They can be described as follows, starting at the most expensive: ï Non-Standard Markets: May include drivers with less experience, drivers with lots of tickets or accidents, drivers with a reckless or drunk-driving history and drivers with a poor credit score. ï Standard Markets: Includes the average driver who uses family-type vehicles who has a reasonably clean driving record and a good credit score. ï Preferred Market: Ensures low-risk drivers with clean records over the past three years and a good credit score. This market has the cheapest premiums. A company’s underwriting requirements may vary within these three markets. If an insurance company declines your application do not give up. Keep Shopping! Different companies have different requirements for accepting drivers for coverage. They do this by setting target markets that help them select the types of drivers they want to insure. A company is not required by law to sell your automobile insurance if you do not meet their underwriting requirements. A company may choose those people they wish to insure unless you have applied for coverage through the Assigned Risk Plan.
  • What is High-Risk Insurance?
    Some companies specialize in writing individuals who have a history of claims, accident, or a bad driving record. These are commonly referred to as high risk or non-standard companies. In addition to applying the normal rating factors, they also base the rate upon
    your record.
  • How much of my premium dollar goes to pay for claims?
    The cost of claims and the cost to settle claims vary from company to company, but generally, run about $.65 out of every $1.00 in premium. If the cost of claims goes higher it generally indicates the need to raise the company’s rate.
  • What part does the agent play in the claims process?
    A few insurance carriers give the agent the authority to settle small claims. However, most companies limit the agentís involvement in the claims process to that of helping the insured complete the loss report and forwarding it to the company Claims Department for processing. In most cases, the agent does not have the authority to make claims settlement offers on behalf of the insurance company.
  • Can a company require me to have a car fixed at a specific repair shop?
    No. The company may use one of three methods. The company may elect to settle your claim based upon the lowest of the estimates you have provided them, in which case you could have your vehicle repaired at the shop of your choice. However, if you have the repairs done at the shop with the higher estimate, you could be responsible for the additional costs. The second method of settlement is to have the company adjuster prepare an estimate that you may take to any shop you desire. Generally, a body shop will honor the company’s estimate. The third method involves you voluntarily taking the vehicle to a shop that your company has a special agreement with, known as a preferred shop. The company has agreed to let the preferred shop prepare the estimate and complete the repairs. In any case, you should contact your company and ask which method they generally use and then make your decision accordingly.
  • What is the difference between a damage appraiser and an adjuster?
    A damage appraiser is trained to evaluate the cost of repairing damage to a vehicle. An adjuster can do damage appraisals, but generally also has the authority to make claim settlement offers.
  • Are there a certain number of estimates a company must require?
    The law does not require a certain number of estimates nor does it prohibit the company from requesting estimates. It is reasonable for a company to have you obtain two estimates of damage. Companies may vary on their needs from as few as one to as many as three.
  • Does the company have a right to examine a damaged vehicle?
    Yes. The insurance company is obligated to repair your vehicle under the terms of your contract. In order to determine the extent of damage, it is important that the company have access to the vehicle before repairs are made.
  • Can I require the company to replace my vehicle?
    No. The personal auto policy is not a replacement policy. The policy is based upon the fair market value of the automobile. Actual Cash Value is the replacement cost less depreciation, which most often is the current market value at the time of loss. Therefore, the company’s obligation is to repair the car or pay based upon its fair market value, not its replacement cost.
  • What it a “Total Loss”?
    If the cost to repair a vehicle is more than 75% of the actual cash value of the vehicle, the vehicle is then considered to be a total loss. The payment on a total loss would be the Fair Market value less the deductible. Should you decide to keep your vehicle rather than turning it over to the company, the company would also deduct the salvage value of the vehicle from the actual cash value payment.
  • Can I choose to repair my car even if my company considers it to be totaled?
    If the company has determined the vehicle to be totaled, it will make a settlement in one of two ways: payment of actual cash value less deductible and take the car, or payment of actual cash value less deductible, less salvage value and you keep the car. You would be
    free to repair the vehicle with your payment but generally, the payment would not be sufficient to cover all repairs. The company would not be obligated to pay any more. The insurance company is required by law to Brand your title salvage if you retain a totaled vehicle.
  • Can I require all new parts on my vehicle?
    There currently is no specific law that addresses this issue. If a vehicle is less than two years old, it would be appropriate to replace the damaged parts with new parts. However, if the vehicle is more than two years old, it would be reasonable for the company to use parts that are not new. Your policy may have specific language regarding the use of Like, Kind Quality or After Market Parts.
  • What are the aftermarket parts?
    Aftermarket parts are vehicle replacement body parts manufactured by a company other than the original manufacturer. Companies can use these parts as long as the quality is comparable to the manufacturerís parts. Your policy may have specific language regarding the use of Like, Kind Quality or After Market Parts.
  • What is the paintless dent repair method?
    The paintless dent repair method is a relatively new way for skilled technicians to pop out minor hail dents. When done this way, no painting is required thereby resulting in dramatically lower claims costs. This method does not work on major dents, older paint faded cars and certain areas of cars where the technician cannot get access. Company adjusters will use this method where appropriate. Many repairs estimates will use both paint less and conventional methods to achieve a total repair.
  • How does the insurance company handle prior damage when making a new claim?
    The insurance company does not owe for damage that occurred prior to the effective date of your policy. Your insurance policy provides coverage based on an occurrence that takes place while the policy is in force. Therefore, each different occurrence is handled separately. For example, if your bumper was previously damaged before the accident, the company will deduct the cost of the bumper from your current claim settlement. In the event of a total loss, the insurance company will deduct any unrepaired damage from any previous occurrence.
  • Can I take cash instead of repairing my car?
    The policy provisions for loss settlement will dictate the basis a company will use to settle a claim. Most policies currently do not include a provision for a cash settlement. In these situations, the company is obligated to settle (pay) based upon the cost of repair. Some policies, however, may go further and allow the company to negotiate a cash settlement. If they do, it is reasonable for the company to deduct labor, overhead costs, and sales tax if you are not going to repair the vehicle.
  • What happens if the company adjuster misses something on the repair estimate/order?
    In the event the repair shop finds that the company adjuster failed to take into consideration something at the time of the estimate, the repair shop should immediately contact the adjuster. The adjuster should meet with the repair shop to determine whether or not the damage is covered. If it is covered, the company would then issue a supplementary check for this additional cost.
  • Why does the company make the check for repairs out to the body shop and me?
    The insurance company is under contract with you through the auto policy to repair your vehicle. To assure that the repairs are done, the company makes the check out to both of you. In addition, the company generally continues to insure your vehicle, so to avoid any
    future claim problems (unprepared damage) they make the check to both. Under New Mexico law the lien holder must be protected on all first party settlement checks.
  • What is a “branded title”?
    If you have had an accident with your vehicle and it is a total loss, the law requires the title to be branded and the motor vehicle department notified.
  • What is “Loss of Value”?
    A loss of value is simply a reduction in the Actual Cash Value (ACV) of your vehicle. A loss of value may occur when you sell or trade a vehicle with a branded title. In some instances, the owner of the vehicle with a branded title may receive less for the vehicle that he or she would have had the vehicle not had a branded title, despite the fact that the vehicle has been repaired. Current state law does not require the payment by insurance companies of this loss in value if you have been paid for the cost of repairs or the vehicleís actual cash value.
  • What are my car rental rights?
    If you carry the proper coverage on the vehicle that is damaged, some companies will cover the cost of renting a replacement vehicle for the time that your vehicle is in the repair shop and unavailable to you. Some companies require that you have a rental reimbursement endorsement on your policy before they will pay. Check with your agent on how your policy would respond. If you have a claim against a third party for damage to your car, then the cost of renting a replacement vehicle while your car is unavailable to you will generally be covered if the other party is found to be liable. Note, however, that it is important to communicate to the claims personnel handling the claim that you are renting. This will avoid any misunderstandings and potential gaps in coverage or payment.
  • What is “Comparative Fault”?
    New Mexico law provides that the degree of fault or responsibility for an accident can be apportioned on a percentage basis among all the parties involved. This percentage is the amount each party contributed to causing the accident. The amount either party can recover in damages is reduced by the percentage of fault attributable to that party.
  • How soon must a company settle a claim?
    There is not a set time provided for the settlement of any automobile insurance claim and many factors must be considered when investigating an accident. It is in the best interest of the company to investigate any loss promptly so that valuable evidence is not lost or destroyed and so that incurred costs, such as storage and any loss-of-use obligations do not become excessive.
  • What should I do if I am having a disagreement with my company over a claim?
    If you have made every attempt to work with the Claims Department personnel and continue to have a disagreement, you should then discuss the matter with your agent to determine if any further resolution can be made. 
  • Inquires regarding insurance companies are processed by the Consumer Assistance Bureau, to determine if there are any violations of the New Mexico Statutes, Insurance Code or Regulations. The Consumer Assistance Bureau cannot act as adjusters or attorneys in attempting to assist the consumer in resolving a complaint. The Consumer Assistance Bureau cannot provide you with legal advice and if you have retained an attorney to assist you with your dispute, we cannot become involved. Our professional staff will commence an investigation into your complaint and contact the insurance company, agent, adjuster or representative processing your claim or request. The staff will verify the information and advise you of the results of our investigation as soon as possible. Prior to filing a complaint, we suggest you attempt to resolve the complaint directly with the insurance company, agent, adjuster or representative you have been dealing with. If your efforts to resolve the problems fail, feel free to contact us and we will make every effort to assist.
  • To file a formal complaint please visit the Consumer Assistance Bureau.
Interest on Late Paid Claims

The prime interest rate applicable to late-paid claims under 59A-16-21(B), which states:
B. Notwithstanding any provision of the Insurance Code, any insurer issuing any policy, certificate or contract of insurance, surety, guaranty or indemnity of any kind or nature which fails for a period of forty-five days, after required proof of loss has been furnished, to pay to the person entitled the amount justly due shall be liable for the amount due and unpaid with interest on that amount at the rate of one and one-half times the prime lending rate as determined by the superintendent, for New Mexico banks per year during the period the claim is unpaid.

Click to view Bank Prime Loan Rate Changes: Historical Dates of Changes and Rates which is published daily in the Wall Street Journal

Service Contract Regulation Act
  • When did the Service Contract Regulation Act become effective in New Mexico?
    The Service Contract Regulation Act went into effect on July 1, 2002.
  • What is the legal citation of the Service Contract Regulation Act in the New Mexico Insurance Code?
    The Service Contract Regulation Act is cited as NMSA 1978, §§ 59A-58-1 et seq. of the New Mexico Insurance Code.
  • Who does the Service Contract Regulation Act apply to?
    The Service Contract Regulation Act applies to all providers of service contracts and prohibits any person from conditioning the approval of a loan or the purchase of property on the purchase of a service contract.
  • What is a service contract?
    A contract where a provider, in exchange for separately stated consideration, is obligated for a specified period to a holder to repair, replace or perform maintenance on, or indemnify or reimburse the holder for the costs of repairing, replacing or performing maintenance on, property that is described in the service contract and that has an operation or structural failure as a result of a defect in materials, workmanship or normal wear and tear including: (1) a contract that includes a provision for incidental payment of indemnity under limited circumstances, including towing, rental and emergency road service and food spoilage; and (2) a contract that provides for the repair, replacement or maintenance of property for damages that result from power surges or accidental damage from handling
  • What is not subject to the Service Contract Regulation Act?
    Be sure to consult with your legal counsel to determine whether the service contract that you provide meets the Service Contract Regulation Act’s defined exclusions.  As defined by the Service Contract Regulation Act, this law does not apply to a warranty; a maintenance agreement; a service contract provided by a public utility on its transmission device if the service contract is regulated by the Office of Superintendent of Insurance; a service contract sold or offered to a person other than a consumer; or a service contract for property costing less than $250.00 in which the consideration for the service contract is less than $25.00.
  • How does the Service Contract Regulation Act define a maintenance agreement?
    A maintenance agreement is a contract for a limited period that provides only for scheduled maintenance.
  • How does the Service Contract Regulation Act define a ’warranty?’
    A warranty is a contract solely provided by a manufacturer, importer, or seller of property for which the manufacturer, importer or seller did not receive separate consideration and that: (1) is not negotiated or separated from the sale of the property; (2) is incidental to the sale of the property; and (3) guarantees to indemnify the consumer for defective parts, mechanical or electrical failure, labor or other remedial measures required to repair or replace the property.
  • What does the Service Contract Regulation Act require?
    The law requires that all service contract providers register with the Office of Superintendent of Insurance, prior to issuing, selling or offering for sale a service contract in New Mexico. Furthermore, the Service Contract Regulation Act mandates that certain consumer protection requirements be made part of the service contract.
  • How does a service contract provider register with the Superintendent?
    In order to properly register under the law, a service contract provider must:
    Complete the standard registration application;
    • Post security (e.g., surety bond, securities, cash or clear & irrevocable letter of credit) in the amount of $50,000.00 except where the service contract covers a motor vehicle or mechanical, plumbing, electrical systems and appliances sold in connection with the sale of residential dwelling, then a $100,000.00 security is required to be posted;
    • Provide the name, address and telephone number of each administrator with whom the provider intends to contract with; and
    • Pay a filing and registration fee of $500.00. 
  • Where does a service contract provider submit the registration forms, security, and fees?
    Completed forms, security postings, and fees must be submitted to the following address in the manner described below:Office of Superintendent of Insurance
    Company Licensing Bureau
    Service Contract Regulation Act Registration
    PO Box 1689
    Santa Fe, NM 87504-1689
  • Are the registration and security requirements applicable to major manufacturing company service contracts?
    The registration and security requirements are not applicable to service contracts provided by a major manufacturing company , which is a person who manufactures or produces and sells product under its own name or label or is a wholly owned subsidiary of the person who manufactures or produces products and maintains or its parent company maintains a net worth or stockholders’ equity of at least $100,000,000.00.
  • How long will a registration be valid?
    A registration is valid only for one year.
  • How often will a registration need to be renewed?
    Service contract providers must renew their registration annually.
  • What consumer protection requirements are required by the Service Contract Regulation Act to be part of the service contract?
    The Service Contract Regulation Act requires that the following consumer protections be made part of every service contract:
    • Right of Return Provision: A service contract must clearly state that the holder has the right to return the service contract for refund of the purchase price if the holder has not made a claim under the service contract and the holder returns the service contract within 20 days after the provider mails a copy of the service contract; within 10 days if the provider furnishes a copy of the contract at the time of purchase; or within a longer period specified in the service contract.
    • Refund Provision: The service contract must provide the service contract provider shall refund or credit to the account of the holder the purchase price of the service contract within 60 days after a service contract is returned. Failure to do so will result in a penalty of 10% of the purchase price of the contract for each 30-day period or portion thereof that the refund and any accrued penalties remain unpaid.
    • Provider or Contract Administrator Contact Information: The service contract must include the name, address and telephone number of the provider or the contract administrator.
    • Legibility & Readability: The service contract must be written in language that is understandable and printed in a legible typeface.
    • Purchase Price, Description and Deductible: The service contract must include the purchase price and a description of the property. It shall also include the amount, if applicable, of any deductible that the holder is required to pay.
    • Provider’s Duties Provision: The service contract must specify the duties of the provider and any limitations, exceptions or exclusions.
    • Replacement Parts Provision: In contracts involving motor vehicles, the service contract, where applicable, shall indicate whether replacement parts not made for or by the original manufacturer will be used.
    • Transferring or Renewing Provisions: The service contract shall include any restrictions on transferring or renewing the service contract.
    Cancellation Provision: The service contract shall include the terms, restrictions or conditions for canceling the service contract before it expires and the procedure for canceling the service contract. The conditions for canceling the service contract shall include a provision providing that a service contract in effect for at least 70 days may not be canceled by the provider before the expiration of the agreed term or one year after the effective date of the service contract, whichever occurs first, except for (1) failure by the holder to pay an amount when due; (2) a conviction of the holder of a crime that results in an increase in the service required under the service contract; (3) discovery of fraud or material misrepresentation by the holder in obtaining the service contractor in presenting a claim for service thereunder; or (4) discovery of either an act or omission by the holder or a violation by the holder of any condition of the service contract of the following if it occurred after the effective date of the service contract and substantially and materially increased the service required under the service contract. Finally, the service contract shall include a provision stating that no cancellation of a service contract may become effective until at least 15 days after the notice of cancellation is mailed to the holder.
    • Holders Duties Provision: The service contract shall include the duties of the holder under the contract, including the duty to protect against damage to the property covered by the service contract or to comply with any instructions included in the owner’s manual for the property.
    • Consequential Damages Provision: The service contract shall include a provision indicating whether the service contract authorizes the holder to recover consequential damages.
    • Existing Defect Provision: The service contract shall state whether any defect in the property existing on the date of the service contract purchase is covered under the service contract.
    • Non-Insurance Statement: The service contract provider must state that a service contract is not a contract of insurance.
  • Does the Service Contract Regulation Act have any restriction on a service contract provider’s name?
    Yes. The Act prohibits a service contract provider from including in the name of his or her business the words insurance, casualty, surety, mutual, or any other word or term that implies that the service contract provider is in the business of transacting insurance or is a surety company.
  • May the approval of a loan or the purchasing of the property be conditioned on the purchase of a service contract?
    No. The Service Contract Regulation Act prohibits any person from conditioning the approval of a loan or the purchase of property on the purchase of a service contract.
  • Does the Service Contract Regulation Act have any record-keeping requirements?
    Yes. Service contract providers must keep and maintain transaction records for every type of service contract issued, sold or offered for sale in the State of New Mexico. All books and records will be subject to examination by the Office of Superintendent of Insurance in accordance with the enforcement power contained in Article 4 of the New Mexico Insurance Code.
  • How long will a provider be required to retain records under the Service Contract Regulation Act?
    A provider shall retain all records relating to a service contract for at least one year after the contract has expired.
  • How are records required to be maintained under the Service Contract Regulation Act?
    Records may be stored on a computer disk or other storage device for a computer from which the records can be readily printed.
  • Do the record requirements apply to major manufacturing company service contracts?
    No. Record requirements do not apply to major manufacturing company’s service contracts.
  • What will happen if a service contract provider fails to comply with the Service Contract Regulation Act ?
    Failure to comply with the requirements of the Service Contract Regulation Act may result in penalties such as administrative fines or other action. Article 16 of the New Mexico Insurance Code governing unfair or deceptive trade practices is also applicable to service contracts. Article 16 provides for civil penalties not more than $5,000.00 for each act or violation, not to exceed $100,000 in the aggregate for violations a similar nature of the Service Contract Regulation Act.
  • Are there special requirements for insurance companies that provide service contracts?
    The Service Contract Regulation Act does not make an exception for insurers who also happen to provide service contracts in such specific situations. They would need to register as service contract providers and comply with this law.
What can I do to protect my property and mitigate wildfire risk?”

No one thing reduces risk completely―the solution requires a system.
Follow this series of steps to reduce your home’s risk, click here to read more!

Phone: 1-855-4ASK-OSI (1-855-427-5674)
1120 Paseo de Peralta, Suite 428
Santa Fe, NM 87501