New Mexico sets a legal floor for the auto liability coverage every driver has to carry, and that floor is lower than most people expect. The state requires what insurers call 25/50/10 coverage: $25,000 for bodily injury to or death of one person, $50,000 for bodily injury or death per accident, and $10,000 for property damage.12 Those three numbers are the entire legal minimum. Here's what they actually cover in New Mexico, what the state doesn't make you buy, and what happens if you drive without a policy.
The three numbers every driver has to carry
Under New Mexico's Mandatory Financial Responsibility Act, every vehicle registered in the state needs a liability policy with at least $25,000 per person for bodily injury or death, $50,000 total per accident when two or more people are hurt, and $10,000 for damage to someone else's property.1 The Motor Vehicle Division lists the identical limits on its insurance requirements page.2
Liability coverage pays the people you injure, not you or your own car. The first number is the most your insurer will pay any one person you hurt. The second is the ceiling across everyone injured in a single crash, so if three people are seriously hurt, they share that $50,000. The third, $10,000, covers the other driver's vehicle and any property you damage. These are floors, not targets. Nothing stops you from buying higher limits, and for most drivers that's the smarter move.
What New Mexico does not require
New Mexico is an at-fault, or tort, state. It has no personal injury protection (PIP) requirement and no no-fault system, so there is no PIP product to buy or waive here.2 After a crash, the at-fault driver's liability insurance pays for the other side's injuries and damage, instead of each driver turning first to their own policy.
Medical payments coverage (MedPay), which reimburses your own medical bills no matter who was at fault, is optional. Insurers can offer it, but the state doesn't mandate it and sets no election deadline. Collision and comprehensive coverage aren't required by statute either. If you finance or lease your car, your lender will usually require them under the loan contract, but that's a private agreement, not New Mexico law.
Uninsured and underinsured motorist coverage
This is the coverage worth paying attention to. New Mexico law requires insurers to offer uninsured and underinsured motorist (UM/UIM) coverage at the same limits as your liability coverage, but the named insured can turn it down in writing.3 If you don't reject it in writing, it stays on your policy.
The reason it matters so much here: New Mexico has one of the worst uninsured-driver problems in the country. The Insurance Research Council estimated that 24.1% of New Mexico drivers were uninsured in 2023, the second-highest rate of any state and far above the national figure of 15.4%.4 Roughly one in four drivers you pass on I-25 or I-40 may carry no coverage at all, and many more carry only the bare 25/50/10 minimum. UM/UIM is what pays your losses when the at-fault driver has nothing, or not enough.
How insurers have to offer this coverage changed recently. After the New Mexico Supreme Court's June 30, 2025 decision in Kileen v. Didio, the Office of Superintendent of Insurance issued Bulletin 2025-013, requiring insurers to offer UM/UIM on a per-vehicle basis and to properly document any rejection.5 A separate 2025 measure, House Bill 97, would have made UM/UIM non-rejectable, but it did not pass, so a written rejection is still allowed under current law.3
Proof of coverage and how the state checks
You need to be able to show proof of coverage when asked, such as during a traffic stop. An uninsured-driving charge can actually be beaten if you produce evidence of financial responsibility that was valid when you were cited, so being able to prove coverage on the spot matters.6 The statute doesn't say whether a phone screen counts, so keeping a paper insurance card in the glovebox is the safe call.
The state doesn't rely on roadside checks alone. New Mexico runs an insurance identification database that matches registered vehicles against coverage reported by insurers.7 When the MVD's records show a vehicle without valid insurance, it notifies the owner and gives 30 days to provide proof before suspending the registration.78 Reinstating a suspended registration costs a $30 fee, and that fee applies each time a registration is suspended.7
A policy is the usual way to comply, but not the only one. Instead of insurance, you can file a $60,000 surety bond or deposit $60,000 in cash with the state treasurer, and larger fleet operators can qualify as self-insurers.97
Penalties for driving without insurance
Driving an uninsured vehicle, or letting someone else drive yours without coverage, is a misdemeanor under the Mandatory Financial Responsibility Act.6 The general penalty for a Motor Vehicle Code misdemeanor is a fine of up to $300, up to 90 days in jail, or both.10 The statute builds in a defense: you can't be convicted if you show the court proof of coverage that was valid at the time you were cited.6
The administrative side stings too. The MVD must suspend the registration of any vehicle it finds uninsured, which can leave you unable to legally drive or re-register until you provide proof and pay to reinstate.87
Why the legal minimum is often not enough
The 25/50/10 minimum is cheap to carry and easy to exhaust. A single emergency-room visit with a few days in the hospital can pass $25,000 quickly, and today's vehicles routinely cost far more than $10,000 to repair or replace, so the property-damage limit can vanish in one serious wreck. If you cause a crash and the damage runs past your limits, you're personally responsible for the rest, and the injured party can pursue your assets.
New Mexico follows pure comparative negligence, which means an injured driver can recover even if partly at fault, with the award reduced by their share of blame. That rule, combined with the high number of uninsured drivers, is why carrying limits above the minimum and adding solid UM/UIM usually pays off. If your car lost resale value after being repaired, that's a separate claim worth understanding; see our page on diminished value in New Mexico.
If you've been hit in New Mexico
Deadlines matter. In New Mexico you generally have three years from the date of the crash to file a personal injury lawsuit, and four years for a property-damage claim.1112 Miss the deadline and an otherwise valid claim can be lost. If a government vehicle or employee caused your crash, separate rules and a damages cap apply under the Tort Claims Act, which limits recovery to $750,000 per occurrence.13
For any insurance claim you'll want the official crash report; here's how to get a New Mexico crash report. And if the other driver was uninsured or underinsured and you're unsure what your own policy covers, a New Mexico personal injury attorney can walk you through your UM/UIM terms.
This article is general information, not legal advice.
Sources
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New Mexico Statutes, NMSA 1978 § 66-5-215 (minimum liability limits). https://law.justia.com/codes/new-mexico/chapter-66/article-5/part-3/section-66-5-215/
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New Mexico Motor Vehicle Division, "What automobile insurance am I required to have in New Mexico?" https://www.mvd.newmexico.gov/what-automobile-insurance-am-i-required-to-have-in-new-mexico/
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New Mexico Statutes, NMSA 1978 § 66-5-301 (uninsured motorist coverage; rejection by the insured). https://law.justia.com/codes/new-mexico/chapter-66/article-5/part-4/section-66-5-301/
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Insurance Research Council, "One in Three Drivers Are Either Uninsured or Underinsured" (Feb. 2025). https://insurance-research.org/news/one-three-drivers-are-either-uninsured-or-underinsured-us-exposing-themselves-and-other
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New Mexico Office of Superintendent of Insurance, Bulletin 2025-013 (per-vehicle UM/UIM disclosure). https://www.osi.state.nm.us/en/news/bulletin-2025-013/
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New Mexico Statutes, NMSA 1978 § 66-5-205 (vehicle must be insured; penalties). https://law.justia.com/codes/new-mexico/chapter-66/article-5/part-3/section-66-5-205/
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New Mexico Motor Vehicle Division, "Chapter 11 (Mandatory Insurance)." https://www.mvd.newmexico.gov/chapter-11-mandatory-insurance/
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New Mexico Statutes, NMSA 1978 § 66-5-206 (registration without insurance prohibited; suspension required). https://law.justia.com/codes/new-mexico/2018/chapter-66/article-5/section-66-5-206/
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New Mexico Statutes, NMSA 1978 § 66-5-208 (evidence of financial responsibility; amounts and conditions). https://law.justia.com/codes/new-mexico/chapter-66/article-5/part-3/section-66-5-208/
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New Mexico Statutes, NMSA 1978 § 66-8-7 (penalty for misdemeanor). https://law.justia.com/codes/new-mexico/2018/chapter-66/article-8/section-66-8-7/
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New Mexico Statutes, NMSA 1978 § 37-1-8 (three-year limitation, personal injury). https://law.justia.com/codes/new-mexico/chapter-37/article-1/section-37-1-8/
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New Mexico Statutes, NMSA 1978 § 37-1-4 (four-year limitation, property damage). https://law.justia.com/codes/new-mexico/chapter-37/article-1/section-37-1-4/
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New Mexico Statutes, NMSA 1978 § 41-4-19 (Tort Claims Act damages cap). https://law.justia.com/codes/new-mexico/chapter-41/article-4/section-41-4-19/