What to know about your car insurance policy BEFORE an accident in New Mexico.

Car insurance can be confusing, but understanding your policy before an accident happens is crucial. This guide will break down the key parts of a standard car insurance policy, what they mean, and why they matter.

What Is a Declarations Page?

Your declarations page is the summary of your insurance policy. It contains:

• Your policy number

• The coverage period (start and end dates)

• The insured person(s)

• Your vehicle(s)

• Your coverage limits

Different insurance companies format their declaration pages differently, but the core information remains the same. It simply has all the different numbers on it and should be easily located. If not, call your insurance company and ask them to send it to you.

Key Coverages in Your Car Insurance Policy

1. Bodily Injury Liability

• What It Covers: Pays for injuries you cause to other people in an accident.

• Example: If you are at fault in a crash and the other driver is injured, this coverage helps pay their medical bills.

• Minimum Limits in New Mexico: $25,000 per person / $50,000 per accident.

• Recommended Limits: Many drivers choose higher limits (e.g., $250,000 / $500,000) for better protection.

This is the insurance you pay to protect others.

2. Property Damage Liability

• What It Covers: Pays for damage to other people’s property (e.g., cars, fences, buildings).

• Minimum Limit in New Mexico: $10,000.

• Why It’s Important: Repairs for newer or luxury vehicles can cost far more than $10,000, so increasing this limit is wise.

3. Medical Payments (Med Pay)

• What It Covers: Pays for your medical expenses after an accident, no matter who was at fault.

• How It Works: You can submit your medical bills for reimbursement up to your coverage limit.

• Important Note: Some hospitals and providers will bill your Med Pay coverage automatically, so be aware of how much is used. You may also want to try and obtain it sooner rather than later!

4. Uninsured / Underinsured Motorist Coverage (UM/UIM)

• What It Covers: Protects you if you’re hit by a driver with no insurance or not enough insurance.

• Why It’s Critical: New Mexico has one of the highest rates of uninsured drivers in the country.

• Minimum Limits: $25,000 / $50,000, but you can (and should) increase this.

• Waiving UM/UIM Coverage: Never do this! If the other driver has no insurance, you could be left with nothing.

This is the most important one on here. People sometimes waive it. You should never do that. This insurance protects you in a car accident. Why would you pay more to protect other people instead of yourself!

5. Uninsured / Underinsured Property Damage

• What It Covers: Pays for damage to your vehicle if the at-fault driver doesn’t have enough insurance.

• Why You Need It: Without this, you may have to pay for repairs out of pocket if the other driver has no or limited coverage.

6. Comprehensive and Collision Coverage

• Comprehensive Coverage: Pays for non-accident-related damage (e.g., theft, hail, fire).

• Collision Coverage: Pays for damage to your car in an accident, regardless of fault.

• Deductible: The amount you pay before your insurance covers the rest.

7. Roadside Assistance

• Covers towing, jump starts, tire changes, and fuel delivery.

• Often included in full-coverage policies but can be purchased separately.

8. Rental Reimbursement

• Pays for a rental car if your vehicle is in the shop after an accident.

• Why It’s Important: It can take days or weeks to get a police report or a decision from the other driver’s insurance. If you have no other vehicle you are stuck without a car if you can’t get a rental from the other driver’s insurance.

What Is “Stacking” and Why Should You Do It?

• Stacking allows you to combine UM/UIM coverage across multiple vehicles.

• Example:

• If you have one car with $250,000 in UM/UIM coverage, that’s your max limit.

• If you have three cars and stacking is allowed, you could have $750,000 in coverage.

• Why It’s Important: In a severe accident, stacking provides far more protection.

Final Tips for Choosing the Right Coverage

✔ Increase your limits beyond the state minimums. It can be cheap for the coverage. Repairs and medical costs can be expensive.

✔ Never waive Uninsured/Underinsured Motorist coverage. Dont do it. It’s the best way to protect yourself.

✔ Consider stacking policies if you have multiple vehicles.

✔ Check your rental and roadside coverage to avoid unexpected costs.

Conclusion

Understanding your car insurance policy before an accident happens can save you time, money, and stress. Review your declarations page and make sure you have enough coverage to protect yourself, your passengers, and your vehicle. Its better to have more coverage an be protected than be stuck because of someone else’s mistakes.

Give us a call if you have any questions about your car insurance policy!