Wildfires spread quickly in extremely hot and dry areas

Home owners in New Mexico need home insurance to protect their property against damage cause by the standard perils, including fire and smoke, vandalism, theft, and hail. However, the Land of Enchantment also experiences other hazards that you need to be aware of and insure your home against, including earthquakes and flooding.

How Much Does New Mexico Home Insurance Cost?

The average cost of homeowners insurance in New Mexico in 2010 was $751, according to the Insurance Information Institute. However, the cost you pay depends on several factors. When insurance companies determine the cost of a premium they consider the value of the home, the materials it’s made out of, its age, the crime rate in the area, its proximity to a fire hydrant or fire station, and more. The monthly payments you make on your premium also depend on how high your deductible is. Higher deductibles have lower monthly payments but are more of a gamble since you’d have to pay more out of pocket if your home is damaged. In addition, the policy holder’s credit rating and claims history can affect the insurance premium.

Discounts may be awarded for the installation of smoke alarms, sprinkler systems, dead-bolt locks, electronic burglar alarms, impact-resistant roofing, storm shutters, wind-resistant laminated glass, and other safety products. The state of New Mexico requires premium discounts for an installed and operable electronic burglar alarm of 10%, and a 5% discount for installed wrought iron bars on all doors and windows.

What Does It Cover?

Homeowner’s insurance covers the home and its contents from property damage, and also includes personal liability coverage for New Mexican residents. Most homeowner’s policies cover damages from fire and smoke, windstorm, hail, and theft, but do not cover vehicles or damage caused by flooding, earthquakes, or nuclear accidents, which require coverage in a separate policy or endorsement. Personal liability insurance is standard in a homeowner policy, and serves to protect the policy holder and the policy holder’s immediate family members from a claim or lawsuit in the event of responsibility for injuries or damage to other people or their property. Standard liability usually covers personal liability claims up to $100,000, medical payments up to $1,000, and property damage up to $500. Further liability coverage may be purchased to provide excess limits.

Do I Have to Get Home Insurance in New Mexico?

Home insurance isn’t required by New Mexico state law, but you should have it since it can protect you from having to pay for expensive repairs to your home or property if they’re damaged by fire, smoke, or other catastrophes. However, insurance is commonly required by mortgage lenders before they finance the purchase of a home.

Optional Coverage to Consider

  • Flood. According to FEMA, New Mexican residents are vulnerable to flooding and should consider flood coverage under a separate policy. Flood insurance premiums are based on building construction year, number of occupants, number of floors, location of contents, flood risk, elevation, and type of policy. The National Flood Insurance Program (NFIP), created by Congress in 1968, provides residential and commercial insurance coverage for flood damage, improves floodplain management, and develops maps of flood hazard zones. Federal flood insurance is available where local governments have adopted management regulations set out by the NFIP.
  • Fire and Lightning. Due to the dry conditions New Mexico is at a higher risk for summer wildfires. Fire and lightning insurance claims are of the highest severity with millions of dollars in damages reported each year, according to the U.S. Fire Administration. Dwelling and personal property coverage in a standard homeowner’s insurance policy cover fire and lightning damage, and the homeowner’s insurance premium may be largely affected by factors of fire prevention, such as the property’s distance from a fire department or a fire hydrant, or the installation of smoke alarms or sprinkler systems.
  • Windstorm. Damages from a windstorm, hail, hurricane, and/or a tornado are included in a standard homeowner’s insurance policy, which means you’ll be covered for damage resulting from falling objects. It is the homeowner’s responsibility to maintain or temporarily repair damages caused by a storm to prevent further damage. In the event of damages caused by a storm, the homeowner should make an inventory of damaged property and contact the insurance company immediately. Flooding damage is not covered in a standard homeowner’s policy, which requires flooding coverage. Homeowner’s insurance premiums may receive discounts for the installation of storm shutters and wind resistant glass.

Mobile Home Insurance in New Mexico

Mobile home insurance or manufactured home insurance generally includes personal property protection, family liability protection, guest medical protection for visitors injured at your home or on your property, structure protection, and additional living expenses for costs or temporary housing during home reconstruction. In the state of New Mexico, policy forms for mobile homes or manufactured housing may not entail deductibles lower than $250. Mobile policies are not as standardized as homeowner’s insurance, so be sure to read through the policy to understand what is included and what is excluded from your homeowner’s insurance policy.

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