New Mexico mandates that residents have automobile insurance. If a driver is involved in a vehicle accident with another driver in the state of New Mexico, the insurance companies must cover damages or a lawsuit is in order.

There are basically three types of New Mexico car insurance:

Collision and Comprehensive Insurance

Collision insurance covers damages to your car because of accidental collision with another vehicle, infrastructure, highway object, or a rollover incident. This type of insurance is not required by law, but is greatly recommended. Comprehensive insurance on the other hand, protects the policyholder from damage to his vehicle brought about by fire, theft, extreme weather, vandalism, and other unfortunate incidents other than road collision. Comprehensive insurance is also not required in New Mexico.

Uninsured/Underinsured Motorist Coverage

This type of New Mexico car insurance protects the policyholder from accidents with another person not holding vehicle insurance in the state. In such a situation, the other person will not be paying for damages via insurance coverage, and the policyholder’s car insurance will cover damages for him.

Medical Payments Coverage

This insurance policy covers all medical expenses and hospital stay in case of accidents that inflict harm on the driver or the passengers regardless of whose fault it is. This is usually availed of to supplement health insurance, or to take its place if there is none. MPC is an optional coverage, but is greatly recommended as well.

Required Minimum Liability

New Mexico car insurance stipulates the required minimum liability in cases of automobile accidents. For bodily injury, a minimum of $25,000 is required per person. This can also translate to $50,000 per accident if more than one person is harmed. In terms of damage to property, a minimum liability of $10,000 is required.

Fines

Car insurance is required when obtaining vehicle registration. It must also be with the driver at all times especially when he is on the road. Once caught driving without insurance, a fine will be charged at a maximum of $300 together with the suspension of the vehicle registration.

Other Options

In the state of New Mexico, car owners have other options when it comes to availing of insurance premiums and policies. If a person can prove financial responsibility, which is done by providing an amount of $60,000 in cash to pay for costs acquired through an accident, he can cover the costs himself instead of getting through with it via an insurance company. Proof of financial responsibility will have to be obtained in order to do this. In other words, unless a driver avails of car insurance he will be liable to pay for thousands of dollars to cover damages in the case of an automobile accident.

There is a reason why car insurance is virtually mandatory in the United States, and the relevance of such policies are most felt in unexpected circumstances and times of need. Although securing auto insurance can be more of a hassle, the rewards are always there at the time you need them the most. A little hassle can actually save so much money from coming out of your own pocket.