Driving carries with it a certain level of risk, and one of the most significant risks comes from uninsured and underinsured motorists.
In response to this concern, many states, including New Mexico, have passed legislation to protect law-abiding motorists. In New Mexico, this comes in the form of the Uninsured Motorist Act, NMSA 1978, Section 66-5-301. This article aims to shed light on this important piece of legislation.
The New Mexico Uninsured Motorist Act requires that all auto insurance policies issued within the State include uninsured (UM) and underinsured motorist (UIM) coverage. This coverage protects insured drivers from financial strain in the event of an accident where the at-fault driver is either uninsured or lacks sufficient insurance to cover the damages.
Why Was the Act Created?
The Uninsured Motorist Act was intended to expand insurance coverage and to protect individual members of the public against the hazard of culpable uninsured motorists. The Act embodies a public policy of New Mexico to make uninsured motorist coverage a part of every automobile liability insurance policy issued in New Mexico and to compensate persons injured through no fault of their own.
Understanding UM/UIM Coverage
Uninsured/Underinsured Motorist (UM/UIM) coverage comes into play if you’re in an accident where the other driver is at fault and does not have insurance. Underinsured Motorist (UIM) coverage is used when the other driver has insurance, but their liability limits are not enough to cover your damages. The UM/UIM coverage will cover things like medical expenses, lost wages, and pain and suffering. The coverage is usually available to the insured driver, their resident relatives, and any occupants in the insured vehicle at the time of the accident.
Insurance Companies Must “Meaningfully Offer” UM/UIM Coverage in an Amount Equal to Liability Policy Limits, Provide the Premium Charges for Each Available Level of UM/UIM offered to the Policyholder, and Obtain a “Knowing and Intelligent” Waiver of Any Available Level of UM/UIM in Writing From a Policyholder Who Desire to Reject the Coverage
It is worth noting that while the Uninsured Motorist Act requires insurance companies to include UM/UIM coverage in their auto policies, the insured party has the right to reject the coverage. However, this rejection must be in writing and comply with very strict requirements, detailed below.
Pursuant to regulations passed by the New Mexico Office of the Superintendent of Insurance, 13.12.3 NMAC, a rejection of UM/UIM coverage equal to liability limits in automobile insurance policy has to be made in writing and be part of the policy delivered to the insured; insurers have to provide the insured with premium charges, and if the insured fails to obtain a valid rejection, the policy will be reformed to provide UM/UIM coverage equal to the liability limits. If the insurer (1) cannot provide a written rejection showing the insured was offered UM/UIM equal to liability limits, (2) fails to provide the premium charges for each level of UM/UIM coverage offered to the insured, or (3) fails to incorporate the rejection into the insurance policy in a way that affords the policyholder a fair opportunity to review his or her decision to reject and potentially change his or her mind, it is presumed that the insured has stacked UM/UIM coverage equal to the liability limits per household vehicle, even if the policyholder never paid premiums for such coverage.
Importance of the Act
The New Mexico Uninsured Motorist Act is a pivotal part of ensuring that drivers can be compensated for their losses in the unfortunate event of an accident with an uninsured or underinsured driver. It provides a safety net for responsible drivers, allowing them to recover costs that otherwise might not be covered. Further, the Uninsured Motorist Act provides coverage to insureds with respect to injuries that arise out of the use of an uninsured or underinsured automobile even if the injured party was not operating or occupying a motor vehicle at the time of the incident.
In conclusion, the New Mexico Uninsured Motorist Act represents a significant stride in the protection of road users, pedestrians, victims of shootings, dog bites, and other injurious incidents from the potential financial fallout caused by uninsured or underinsured drivers. It provides a legal framework that ensures every driver has a fair opportunity to protect themselves against those who disregard the compulsory auto insurance laws or carry insufficient auto liability insurance.
