May 29, 2024

New Mexico homeowners insurance overview

Here are some things all New Mexico homeowners should be aware of when shopping for coverage:

The average New Mexico home costs about $248,670

The average home price in New Mexico is about $248,670, according to The Ascent’s research on average home price by state. The national average is $293,349. These below-average prices may help contribute to New Mexico’s below-average home insurance rates.

But those with larger, more-expensive homes can expect to pay more. The same goes for homeowners living in areas prone to natural disasters.

Homeowners living near the Texas border usually pay more

The five most expensive New Mexico cities for home insurance (listed in the table below) are all located near the Texas border. Homeowners who live in this area may want to take some extra time to compare homeowners insurance quotes to ensure they’re getting the best possible deal.

What are the most common homeowners insurance claims in New Mexico?

Here are some of the most common homeowners insurance claims filed in New Mexico:

Wildfire damage

New Mexico has seen some of its largest wildfires in history in recent years. These storms can be extremely costly because they can destroy entire towns, leaving little to nothing behind. Those living in wildfire-prone areas typically pay more for homeowners insurance.

There are some things homeowners can do to reduce their risk of filing a wildfire claim, like trimming away brush from around the home. But sometimes, there isn’t anything a homeowner can do to stop this kind of damage. That’s why it’s key for homeowners to review their policy’s coverage limits. It should provide enough protection to pay for a full rebuild, if necessary.

Flood damage

Monsoon season can trigger flooding or even flash flooding in New Mexico, especially in low-lying areas. This can damage or destroy personal property and weaken the foundations of homes. That’s part of why floods are among the most expensive home insurance claims.

Many people don’t know this, but floods actually aren’t covered under a typical homeowners insurance policy. Homeowners interested in coverage must purchase a separate flood insurance policy if they don’t want to pay out of pocket for flood damages. Lenders may require homeowners with mortgages to purchase flood insurance if they live in a flood-prone area.

Earthquake damage

New Mexico also sees many earthquakes every year. While most of these are small, a large earthquake can bring down buildings, especially if they’re older and don’t meet modern building codes. They can also cause damage to water and gas lines, which can lead to additional problems.

Most homeowners interested in earthquake protection must purchase an earthquake endorsement for their policy. This may include a separate earthquake deductible that’s higher than the typical homeowners insurance deductible. Homeowners must meet this earthquake deductible before their insurance company will pay anything for the damages.

Homeowners insurance coverage options and discounts in New Mexico

New Mexico homeowners can save by taking advantage of the following home insurance discounts:

Bundling can save homeowners nearly $450 per year

Bundling home and auto insurance is the best way to save on homeowners insurance with nearly every company. In New Mexico, this will save homeowners about $442 per year on average.

Paying in full offers surprising savings

The simple act of paying a homeowners insurance premium all at once rather than in monthly installments can help homeowners save $130 per year. This may not be possible for everyone, but it’s the smarter play for those who can afford to do so. Homeowners who want to take advantage of this discount in the future should begin saving up for their next home insurance premium right away so they’re prepared to pay it in full.

Installing sprinklers can shave about $200 off the average home insurance premium

New Mexico homeowners looking to reduce their risk of fire-related damages should think about installing a sprinkler system. There is an upfront cost associated with this, but it brings some major long-term benefits. Homeowners won’t have to worry so much about fire damage and they’ll save about $195 per year on their homeowners insurance.

7 cheapest cities in New Mexico for homeowners insurance

The following seven cities have the cheapest average New Mexico home insurance rates:

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