Homeowners Insurance in New York
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UPDATED: Jul 19, 2021
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Are you trying to get a good deal on your homeowner’s insurance policy? Well, you’re not alone. Whether you’re a first time homeowner, whether you’re active in the housing market, or whether you’re just looking to see if you can get a better deal somewhere else, you’ve come to the right place. Our handy guide will tell you everything you need to know about finding the best deal on home insurance in New Mexico.
There are a few states which rebel against the standardized homeowners insurance policies that many other states provide. New Mexico is one such state. The most popular type of insurance policy, also referred to as a “form”, is called the Special Form.
|Types of Coverage||Coverage Amount|
|Replacement Cost (Dwelling)||$200,000|
|Replacement Cost (Contents)||$100,000|
The Special Form offered to most New Mexico homeowners is a little more flexible than what’s offered in other states. For starters, even though we filled in the form above with example amounts, you will get to choose exactly how much liability and medical payments coverage you want to purchase. Buying less will help lower your premiums, but may leave you financially vulnerable in the future. Adjusting your deductible has an opposite effect – the higher it is, the lower your premiums will be, and vice versa.
Most of New Mexico’s estimated rates are based on the fact that severe storms and other natural disasters are fairly rare. However, keep in mind that the state does have an unusually high risk for home damage caused by wildfires. Other than that, averages across the state are fairly uniform, with some exceptions.
If those averages seem a little high (or, at least, higher than you would like to pay), you can help yourself a great deal by shopping around and getting multiple quotes from several companies. That way, you can find the best price with the best coverage for your specific needs.
Laws and Requirements
Most people might not be aware of this, but purchasing homeowners insurance is only necessary if you have a mortgage out on your home. If you paid for it in cash, or you have completed all of your loan payments, then it’s entirely up to you whether or not you want to purchase that financial protection for your property. It may be tempting to think it isn’t necessary, what with the low frequency of natural disasters in New Mexico, but it might ease your mind to have some sort of insurance policy, just in case.
Taking a Home Inventory
We’re sure you know how much your structural home is actually worth; if you had to take out a mortgage, then you’re very aware of this price tag. But what about your personal property? Personal property coverage is a significant portion of your overall policy. Yes, your coverage is limited to half of the cost of your structure, but what if the contents of your home are valued at significantly less than that? You could save a bunch of money by purchasing less coverage and lowering your premium.
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Choosing What (and How Much) Coverage
Your basic Special Form coverage that many New Mexico home insurance companies offer is fairly comprehensive, but it doesn’t cover everything. On top of your basic policy, there are many other factors to consider. Such as:
- Fires – As we mentioned earlier, the danger of a wildfire doing damage to your home and property is quite high in New Mexico. As a matter of fact, the state is #5 in the nation for frequency of wildfires. Bu with a Special Form policy, both your dwelling and your personal property are covered in the event of damages.
- Floods – Repairing damage from floods has become so expensive in the last 20 years that private insurance companies have almost universally excluded it from their available coverage benefits. But the government has stepped in to meet this need. Despite the dry, desert climate of New Mexico, if you fear your home might be vulnerable to flooding, contact the NFIP (National Flood Insurance Program) for information on possible coverage.
- Nuclear Accidents – The atomic bomb testing days in the deserts of New Mexico are long gone…or so they would have you believe. In all seriousness, though, this is one of the few (and also most unlikely) coverage options that is not protected against on a Special Form policy.
- Damage from Winter Storms – For obvious reasons, winter storms and damage related to them are extremely rare in New Mexico. But that didn’t stop the winter storm of 2011 from causing over $55 million in damages. Thankfully, if something like that ever happens again in the near future, you can rest easy knowing that your home and property are both covered by your policy.
- Covering Your Property – While your outer structure is covered by an “all perils” clause in your form, your property is covered only by “named perils”. This means that there is a specific list of perils that, if they happen to damage any of your property, your insurer will pay out claims on. Anything that isn’t on that list is your financial responsibility. It might be a good idea to talk about the named perils on your policy with your insurance agent to see if you require any extra coverage that your policy doesn’t provide.
- Liability Coverage – Yes, if an unfortunate incident happens on your property, you can be deemed at fault and sued for damages. But your liability coverage will take care of any financial responsibility up to the specified coverage limits on your policy.
- Umbrella Coverage – If you feel like your homeowners insurance company can’t or won’t sell you enough coverage, then you should look into umbrella insurance. It’s an extra form of insurance that can protect your home and property up into the millions of dollars if it is valued as such.
Replacement Cost vs. Actual Cash Value
These two terms are used to explain how much money you can expect to receive if your insurance company accepts a claim you file. Typically, receiving a replacement cost sum applies to the outer structure of your home. This means that accepted claims filed over damage to your dwelling will pay out all of the costs associated with repairing or replacing the damages. Actual cash value usually refers to your personal property. That’s when your insurance company only pays out the value of the property minus depreciation. You will not receive 100% of that item’s total value.
How Your Credit Score May Influence Your Rate
New Mexico homeowners and prospective homeowners are protected by the Personal Insurance Credit Information Act (PICIA) when it comes to having their credit examined for underwriting and rating. Thanks to the PICIA, your homeowner’s insurance company can only examine a limited snapshot of your credit history. This is likely to give you a more favorable risk profile in their eyes, which could potentially save you money on premiums.
For more information, feel free to click any of the links you see in this article. They all lead to more detailed information about homeowner’s insurance, specifics on purchasing a policy, and how to find the best deal. You should also contact local resources in your state, such as:
New Mexico FAIR Plan
Or contact them directly through the following resources:
Office of Superintendent of Insurance
PO Box 1689
Santa Fe, NM 87504-1689