Claire Smith Last Updated On: February 13, 2024

What to Look for When Shopping for New Mexico Home Insurance

New Mexico is an incredible place to call home. After all, it’s not nicknamed “The Land of Enchantment” for nothing!

But as a desert state, New Mexico has a unique set of needs that homeowners need to consider when insuring their largest investment. Whether you’re shopping for a new policy or simply wanting to make sure your current policy is up to snuff, keep reading for everything you should know about home insurance from Santa Fe to Silver City, and everything in between.

Free Home Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

Table of Contents

Weather in New Mexico & How It Impacts Home Insurance

New Mexico is a desert state, which means it escapes the potential damage other states experience from heavy snow, sleet and hail. But the fifth-largest state isn’t quite out of the woods: it’s prone to flash floods, occasional hurricanes and tornadoes, strong winds and wildfires, and more. 

It might seem counterintuitive, but the desert state is also vulnerable to flooding issues. The dry ground has trouble absorbing sudden rainfall, which can runoff onto properties and cause damage. During spring snowmelt, rivers rise and can also overflow and flood properties. Flooding is usually excluded from home insurance policies, so in New Mexico, it might make sense to get separate flooding insurance. 

Next, we’ll cover what standard home insurance policies do cover.

New Mexico Homeowners Insurance Options

Home insurance typically comes with a few buckets of main coverage that you can add to if needed. These buckets include:

  • Dwelling & Other Structures: This covers the structure of your home (roof, walls, foundation) from damage and any other structures on your property, like a shed, garage, etc. 
  • Liability: This covers your liability if something goes wrong, such as if someone is injured on your property, then this covers their medical costs as a result. If you cut down a tree and it damages your neighbors home, this helps cover repair costs. If you’re sued because of this, this coverage also provides you with a legal defense. 
  • Personal Property: Your personal belongings are also protected from damage, including clothing, jewelry, electronics, furniture, and more, to a certain extent. For valuable items that exceed the coverage limit, you should consider purchasing additional coverage. 
    • Note, there are two types of coverage: actual cash value and replacement cost. A replacement cost policy will cover you for the cost to fully replace items, while actual cash value simply compensates you for their current depreciated value. Replacement cost is a more generous policy, but can be more expensive to maintain. 
    • Read more about personal property insurance here
  • Loss of Use: If your home is damaged to the point where it’s unlivable, this coverage helps pay for lodging, food, and transport while your home is being repaired/replaced. 

This is what a standard home insurance policy covers, up to certain limits. For example, your dwelling is usually covered up to the rebuild cost of your home, and your personal property is covered for about 20-50% of that.

But homeowners can also further customize their policy by adding riders, which are optional add-on coverage. Each insurance provider offers different variations of home insurance riders, but these can include:

  • Scheduled Personal Property: If you have antiques, collectibles, fur, high-value jewelry, or something similar, it makes sense to insure the full value of those items with an added scheduled personal property policy. This policy also offers additional protection, such as if you lose the item. 
  • Water Backup: This covers the cost of damage from a backed up sump pump or drain, which is excluded in most home insurance policies. 
  • Identity Theft: This is increasing in popularity, as it helps cover the costs to regain your identity after an identity theft, including legal fees, mail fees, and other costs. 
  • Business Property: If you run a business out of your home, your standard home insurance policy doesn’t cover you. You’ll need a rider to protect your business-related items in your home. 
  • Flood: As mentioned earlier, flooding is a peril that’s almost always excluded from home insurance coverage. If you live in an area prone to flooding, you should consider purchasing a flooding rider to ensure your home and belongings are protected from the damages of flooding (which can be extensive). 

These are just some of the options available to you, but there are even more depending on the insurance provider you go with. Customizing your home insurance policy can give you the peace of mind that your biggest investment is protected as much as possible.

But everything comes with a price tag, so next we’ll explore costs for home insurance coverage in New Mexico.

Free Home Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

The Average Cost of Homeowners Insurance in New Mexico

Your home is your largest investment, which means the cost to insure it won’t be negligible. But the good news is that home insurance in New Mexico is competitive; the average cost is $1,017 per year, which is lower than the national average of $1,211 annually.

Overall, New Mexico has a fairly affordable cost of living (in the top twenty states for lowest costs of living), which helps explain the lower insurance costs. While the state is susceptible to certain severe weather events like flash flooding and wildfires, they dodge many others and have infrequent tornadoes and tropical storms.

Of course, what you’ll actually pay depends on a number of factors, including:

  • Your home’s location 
  • The age of your home and roof
  • The replacement cost of your home (materials and labor)
  • Your claims history
  • Any security features
  • Any high-risk items like a pool or old wood stove

You may end up paying more or less than the state average based on your unique factors. But fear not: we have a few tips and tricks up our sleeve to help you save on home insurance costs. Keep reading for that and more.

How to Save on Home Insurance in New Mexico

While you don’t want to skimp on coverage when it comes to protecting your biggest asset (your home), you can still find ways to save on premiums that don’t involve leaving your home exposed to risk.

Here are some of the best ways to save on home insurance in New Mexico: 

  • Discounts: Many insurance providers offer discounts on insurance, which can save you anywhere from 5-30% on your premiums. Be sure to ask for any that you think you might be entitled to, including:
    • Loyal customer 
    • New customer
    • New home
    • New roof
    • Safety features (sprinkler system, alarm system, etc.)
    • Multi-policy bundle
    • Claims-free history
    • Employee/association 
    • And more
  • Coverage: Balancing between just enough and too much coverage is a fine line, but you don’t want to be overpaying for coverage you don’t need. 
    • For example, if you inventory your belongings and you’re paying for $100,000 in personal property coverage but only need $60,000, you’re missing out on savings. 
    • As well, if your initial policy included a high-risk item like a swimming pool or trampoline but you’ve since removed it, be sure that’s factored into your rates. 
  • Home Maintenance: Performing general upkeep on your home not only helps protect your investment, but it also prevents claims from being denied due to neglect. 
  • Deductible: If it’s an option, increasing your deductible can lower your premiums. You will have to pay a higher deductible should you have a claim, but if you’ve been claims-free for years, this is an easy way to save instantly. 
  • Claims: When you submit a home insurance claim, your premiums will likely increase. Make sure to think about the full implications of submitting a claim before you do; if it’s a small, easy fix, consider handling it yourself to avoid an increase in rates. 

These are just some of the ways to save on your home insurance rates. But one of the most effective and most-underutilized ways is simply to shop around for home insurance quotes before signing on the dotted line.

Simply comparing quotes can save you upwards of 20-30% on your home insurance. ConsumerCoverage makes it easy for you: just click here for access to free quotes, and you’ll be well on your way to saving money.

Free Home Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required

New Mexico Condo Insurance

Condo owners, we haven’t forgotten about you! Your condo deserves protection just as much as a house does. Condo insurance protects your personal belongings, like clothing, furniture, appliances, and more, as well as the condo’s interior structure. It also protects your liability, such as if someone is injured inside your condo or if your renovations cause damage to another condo. 

New Mexico condo insurance is more than affordable: condo owners in NM can expect to pay $469 per year on average for $40,000 in personal property and $100,000 in liability.

Is Home Insurance in New Mexico Required?

While there is no law requiring you to have home insurance in New Mexico (like how car insurance is legally required to drive), you may be required to have home insurance by your mortgage lender

But even if not, it’s always a good idea to have home insurance if you own a home. After all, it’s one of the biggest purchases you’ll make in your lifetime and it can easily be damaged or even destroyed by weather, fire, theft, and more. Home insurance protects your home and belongings while helping you sleep better at night knowing you won’t lose everything should the worst happen.

Are you new to the U.S. and looking to settle in New Mexico? Welcome! Be sure to check out our handbook for new immigrants for everything you should know about getting insurance in the U.S.

Find the Best Homeowners Insurance in New Mexico

Ready to get home insurance? The best home insurance for you is within reach. Start by getting access to free quotes fast just by clicking here. Be sure to compare quotes to make sure you’re getting the best coverage and rate for your needs. Saving on home insurance couldn’t be easier!

Free Home Insurance Comparison - Save up to 30%

No junk mail. No spam calls. Free quotes.

No Signup required


Stay Up-to-Date
Subscribe to our newsletter and receive alerts, offers, education, and updates in your inbox.