No. In New Mexico, we have a statute that prevents insurers from increasing auto rates for no-fault accidents.
As a New Mexico personal injury lawyer, I often encounter clients who are concerned about their insurance rates following an accident, especially if they need to utilize their underinsured motorist coverage. It's a valid concern, considering the financial implications that can arise from an accident, but understanding how underinsured motorists' coverage works and its impact on insurance rates is essential for every accident victim.
What Is Uninsured Motorist Coverage?
Let’s start by clarifying what underinsured motorist coverage is. This type of coverage is designed to protect you if you're involved in an accident with a driver who doesn't have enough insurance coverage to fully compensate you for your damages. In such cases, your underinsured motorist coverage steps in to cover the gap between the other driver's insurance coverage and your damages.
Now, a lot of clients will respond, “great, and then my rates will go up!” I get it. Most of us have experienced insurers raising our rates for any number of reasons, so it’s wise to be asking those kinds of questions. BUT… the good news is – at least in New Mexico—your rates will not go up if you have to use your underinsured/uninsured motorists coverage in an accident where you were not at fault.
In the state of New Mexico, one of the fundamental statutes that governs insurance rates for no-fault accidents is NMSA 59A-17-7.1. Let's delve deeper into this statute and explore its implications for accident victims in the state.
NMSA 59A-17-7.1, commonly referred to as a "No Fault Accident" statute, serves as a safeguard for consumers against unjustified rate increases by insurance companies in the event of accidents that are not the fault of the insured. This statute explicitly prohibits insurers from raising insurance rates for an insured solely based on their involvement in a no-fault accident. Here is that statute:
59A-17-7.1. Motor vehicle liability; not at-fault accidents.
A. The rates of a motor vehicle liability insurer shall not provide for an increase in the premium if based upon an accident in which the insured is not at fault in any manner as determined by either the accident report or the insurer. If the insurer determines that its insured is at fault contrary to the specific finding of an accident report that the insured is not at fault, the insurer shall reach its conclusion only after an investigation.
B. A motor vehicle liability insurer shall not cancel, or use as a basis for nonrenewal, an insurance policy if such cancellation or nonrenewal is based upon an accident in which the insured is not at fault in any manner as determined by either the accident report or the insurer. If the insurer determines that its insured is at fault contrary to the specific finding of an accident report that the insured is not at fault, the insurer shall reach its conclusion only after an investigation. NMSA 59A-17-7.1
Learn more on the full statute here: 59A-17-7.1. Motor vehicle liability; not-at-fault accidents
How does this statute apply to the utilization of underinsured motorists coverage following an accident that was not the insured's fault?
Protection for Consumers: The primary purpose of NMSA 59A-17-7.1 is to shield consumers from unwarranted rate hikes resulting from accidents beyond their control. By preventing insurance companies from penalizing insured individuals for no-fault accidents, the law aims to uphold fairness and transparency in the insurance industry.
Scenario Example:
Consider a scenario where Sarah, a resident of New Mexico, is involved in a car accident caused by a negligent driver who ran a red light. Despite Sarah's diligent driving and adherence to traffic laws, she sustains significant injuries due to the other driver's reckless behavior. Fortunately, Sarah has underinsured motorists coverage as part of her insurance policy to mitigate the financial burden of the accident.
In Sarah's case, NMSA 59A-17-7.1 ensures that her insurance company cannot increase her rates solely because she was involved in a no-fault accident. Despite utilizing her underinsured motorist's coverage to cover the gap in insurance coverage, Sarah is protected by the statute from facing unjustified rate hikes as a result of the accident.
Contact Our Experienced New Mexico Personal Injury Attorney For Help Today
NMSA 59A-17-7.1 serves as a vital protective measure for consumers in New Mexico, preventing insurance companies from raising rates for no-fault accidents. Understanding the implications of this statute and seeking legal guidance when necessary are essential steps for accident victims to ensure fair treatment and protection of their rights.
If you have any further questions or concerns about underinsured motorists coverage, insurance rates, or your legal rights following an accident, please don't hesitate to reach out.
Our dedicated and experienced personal injury team here at The Injury and Disability Law Center is here to help you. Schedule your free initial consultation today by calling our office at 575-300-4000, starting a chat, or filling out our online form.
If you want even more information, feel free to download my free book, Car Accident Cases Made Simple(r), where I discuss this topic and more.