How optional is uninsured/underinsured motorist coverage?

To drive in New Mexico, the law says you need a license and an insurance policy. But when it comes to that insurance policy, you have options. You can get the full coverage with all the options. Except that costs more money. Or you can go cheap and get the bare minimum. That costs less money each month, but it may cost you more in the long run.

According to the Insurance Information Institute, more than one-fifth of all drivers in New Mexico are driving illegally without insurance. The state ranks third worst for uninsured drivers, and those aren’t the best drivers. They’re more likely to be the ones causing the accidents. Roughly 30% of all New Mexico car crashes, truck accidents and motorcycle accidents are caused by drivers who don’t have insurance. The takeaway? That optional uninsured/underinsured coverage might not be so optional.

How payments work after an auto accident

There’s a reason for the state’s mandatory insurance. And it has to do with the fact that New Mexico is a “fault” state. As a fault state, New Mexico says that drivers are responsible for the amount of damage they cause. If the other driver’s 100% at fault, he owes you 100% of the damages. If he’s 51% at fault, he owes you 51% of the total damages. But you don’t go straight to the other driver; you go to his insurance.

Now, if you get hurt in an auto accident, and the other driver doesn’t have insurance, how do things work?

  • The other driver is still liable for the damages he caused. You can file a lawsuit to seek justice.
  • There’s a good chance that driver might not have the tens of thousands of dollars to cover your damages. These may include medical bills, lost wages, physical therapy and car repairs.
  • Even if the other driver has insurance, the minimum coverage of $25,000 may not be enough. For example, if you need surgery, a hospital stay and rehab.
  • There is zero chance that minimum coverage will fully cover a crash that leaves you crippled or that greatly reduces your quality of life.

This is where the uninsured/underinsured coverage option comes into play. In case the other driver is uninsured—or doesn’t have enough insurance to cover your damages—you can file a claim against your insurance. These claims can be complicated to file, but they can help you better recover from your accident.

If a thing is worth doing, it’s worth doing it right

You have to make your own choices about your finances. No one else can do it for you. But when you’re thinking about all the different ways you can save a few bucks here and there, you might want to think twice before dropping your uninsured/underinsured coverage. Your insurance isn’t just another part of your driver’s license. It’s a policy meant to protect you from the dangers of the road.

WalletHub recently ranked New Mexico’s drivers near the bottom for safety. More than one-fifth are uninsured. The dangers are real. It’s up to you to decide if you want protection that can stand up to the test.