Finding a good home insurance policy at a reasonable price is a worthy goal. The best way to go about it is by comparison shopping. We analyzed average rates to help you discover the best homeowners insurance in New Mexico.
Cheap Home Insurance in New Mexico Cost Comparison
It’s wise to get multiple home insurance quotes if your goal is to find cheap homeowners insurance. Our analysis finds home insurance costs can vary significantly from one insurance company to the next. You won’t know which insurer offers the best price without comparison shopping.
| Home insurance company | Average annual home insurance cost in New Mexico |
|---|---|
| Farmers | $1,247 |
| Travelers | $1,746 |
| Allstate | $1,913 |
| State Farm | $1,989 |
You don’t want to base your decision on price alone. The best homeowners insurance company for you will also offer coverages and home insurance discounts that match your specific needs.
New Mexico Homeowners Insurance Cost Factors
Your ability to get cheap homeowners insurance in New Mexico will depend on the following factors:
- The deductible amount you choose
- Policy coverage limits
- Your credit
- The year the home was built
- The materials used to build the home, like stone and brick
- The fire rating in your area
- The historical claims of your home’s area
- Your personal claims history
- The cost to rebuild your home
What Does New Mexico Homeowners Insurance Cover?
With a standard home insurance policy your house is covered for any problem that’s not a listed exclusion in the policy. Such exclusions are usually: sinkholes, nuclear hazard, insect and vermin infestations, earthquakes, power failure, war, floods and wear and tear.
In a standard homeowners policy, your belongings are covered for specific “perils.” Examples of problems covered by home insurance are volcanic eruption, fire, smoke damage and vandalism.
To help you best determine how much home insurance you need, it’s smart to review how home insurance works to protect you.
Here’s a breakdown of the main coverage types found in a standard home insurance policy:
- Dwelling: This section covers the cost to repair and replace any damage to your home and attached structures (such as a deck or garage).
- Other structures: This pays for repairs and replacement costs for structures that are not attached to your home, like an in-ground pool or shed.
- Personal property: This type of coverage pays the costs to repair or replace your personal belongings after a problem like vandalism or theft. Your belongings include items like your jewelry, clothing, appliances, furniture, television sets and other items.
- Liability: Liability insurance is for the costs of property damage and injuries you accidentally do to others. Liability insurance can pay for a settlement or court judgment against you, and also your legal defense costs.
- Medical payments to others: This portion of a policy covers smaller medical claims made by people who do not live in your household, no matter who was at fault for the injury. For example, if a guest slips on your front steps, medical payments coverage could pay for their visit to urgent care. Coverage amounts are small, such as $1,000.
- Additional living expenses: This coverage kicks in when you can’t live in your home due to a problem covered by your policy (like a fire). Additional living expenses coverage pays for costs such as hotel room fees, restaurant meals, laundry services, and other necessary services, like a pet boarding service.
Compare Home Insurance Quotes
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Lemonade
Excellent
Average
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Erie
Very good
Low
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Chubb
OK
Very low
What’s Not Covered by New Mexico Homeowners Insurance?
Common exclusions found in a typical homeowners insurance policy are problems like war, sinkholes, power failure, earthquakes, floods, nuclear hazard, vermin and insect infestations and intentional loss.
Read your policy closely to understand what is excluded from coverage.
Flood Insurance in New Mexico
Standard home insurance policies do not cover flood damage. With flooding on the rise, you may want to buy a flood insurance policy.
Government funds after floods are a limited resource. The best option is to have your own flood insurance policy to rely on. The majority of Americans who have flood insurance buy it through the National Flood Insurance Program (NFIP). Private flood insurance is also available.
After a declared disaster or emergency, FEMA’s Individuals and Households Program (IHP) can provide monetary and direct assistance, if you qualify. This safety-net program helps people find housing after a problem directly caused by a disaster and that’s not covered by insurance or other sources.
Earthquake Insurance in New Mexico
Seismic activity in New Mexico has significantly increased, due in part to the oil industry. There are 20 active faults throughout the state. In November, 2021, there were 18 quakes above 3.0 on the Richter scale in the state and more than 70 quakes that registered between 1.0 and 2.0.
Homeowners insurance generally does not include earthquake coverage. You may want to consider purchasing an earthquake insurance policy if your property is in an area vulnerable to quakes.
Earthquake insurance typically covers:
- Dwelling
- Other structures
- Personal property
- Additional living expenses
Earthquake insurance generally has a separate deductible from the basic home insurance policy. The deductible generally ranges between 10% and 25% of the dwelling’s policy limit.
Tips for Buying Homeowners Insurance in New Mexico
If you’re buying home insurance you likely want to find a good price without giving up quality coverage. Below are some helpful tips for both the first-time buyer and long-time homeowners who are switching companies:
- Assess the house rebuilding costs. Ask your home insurance agent to help you calculate the cost to rebuild your home with comparable materials and the labor costs in your area. You will want to match your dwelling coverage to this estimate.
- Evaluate how much liability coverage you need. A good starting point for liability coverage is $300,000. A good rule of thumb for liability coverage is to have an amount that matches your net worth or what could be taken from you in a lawsuit
- Consider add-on coverage for your belongings. Many homeowners have valuable items such as jewelry, family heirlooms and artwork. If you own these types of items, you might want to consider scheduling personal property so they are insured for the full value.
- Think about the benefits of replacement cost coverage instead of actual cash value. Replacement cost coverage will pay to replace your damaged items with new, similar items. Actual cash value coverage will only pay the depreciated value of your items and you’ll have to make up the difference if you buy new items.
- Assess coverage gaps. Most homeowners insurance policies offer additional coverage types. For example, your insurer may offer coverage for sewer and water backup damage.
- Ask for discounts. Ask your insurance company if you are getting all the discounts you are eligible for. Many companies offer discounts for home security systems and bundling your home and auto insurance.
- Research financial ratings. Check the financial strength of your insurer. You can check out these ratings through companies such as A.M. Best or Standard & Poor’s. You may find that your financial institution will not finance a mortgage unless your home insurance company has at least an “A” or better financial strength rating.
- Compare quotes from multiple insurance companies. The same coverage from different companies can vary dramatically in price.
Methodology
Average home insurance rates were calculated using data from Quadrant Information Services. Rates are based on a policy with dwelling coverage of $300,000 and liability coverage of $100,000.
