In finance, there’s a saying: “Cash is king.” But when it comes to car accidents, the crown goes to insurance. That’s right, folks—"Insurance is king!" You might think it’s all about who’s at fault or the severity of the damage, but when the dust settles, the most important factor in your case often boils down to the presence (or absence) of insurance. But here's the twist: it’s not just about having insurance—it’s about having enough insurance.
Why is Insurance So Important in New Mexico Car Accident Cases?
Imagine this: you’ve been in a car accident in New Mexico, and the other driver is 100% at fault. But here's the catch—what if that driver doesn’t have insurance? Yes, the law requires all drivers to carry liability coverage, but from what I see in my practice that rarely matters anymore. You have a higher chance than you think of getting into an accident with an uninsured driver, especially in New Mexico which has one of the highest rates of uninsured drivers. More on that later… With more families feeling financial pressure than ever, expenses like auto insurance often gets eliminated. This means your risk of getting hit by an uninsured driver is increasing.
You may be thinking, ok, then I’ll just sue them and make them pay! Unfortunately, that is not a good option. Let me explain.
Let’s go back to our example that you’re in a car accident, and the other driver is 100% at fault. You hire a lawyer, go to court, and win a judgment for $100,000. That judgment means that person legally owes you $100,000. Sounds great, right? On paper, yes. In reality no. Here’s the problem: collecting that $100,000 is almost impossible.
Under New Mexico law, certain assets are protected, meaning you generally can’t take someone’s home or car to satisfy a judgment. So, unless the at-fault driver has piles of cash just sitting around, chances are high that judgment will end up being little more than a symbolic victory. You can read more about New Mexico's homestead exemption laws that protect personal property like someone’s home here.
But What About Collection Laws?
You might be thinking, “Well, can’t we just garnish their wages or put a lien on property?” Again, in theory, yes. In reality, it’s not that simple.
Many people don’t have significant wages to garnish, or they’re protected under state laws. New Mexico’s garnishment laws provide limits on how much you can actually collect from someone’s wages. You can read more here.
And liens on homes? They may take years to actually bear fruit—if ever.
So, without auto insurance, you’re left chasing after dollars that just aren’t there.
Insurance Makes It All Possible
That’s why insurance is so crucial. When there is insurance, there’s money to pursue, and since the law says your only remedy in a car accident case is money damages, that makes insurance king.
But remember the plot twist?
Not All Insurance Is Equal: Policy Limits Matter
It’s not just about whether the at-fault driver has insurance—it’s also about how much insurance they have. Every insurance policy comes with limits—the maximum amount the insurance company will pay for a claim. This is based on the amount of policy limits purchased by that individual. For example, New Mexico’s minimum liability insurance requirement is $25,000 per person for bodily injury and $50,000 per accident.
But what happens when your medical bills alone are $100,000 and the person only has $25,000 in insurance? That’s when policy limits become a critical issue. Once the insurance company has paid up to the policy limit, they’re off the hook, even if your total damages are much higher.
In these cases, if the other driver has minimal coverage, you could be left paying for a large chunk of your damages out of pocket. (And if you think you make up that shortfall by suing the other driver, remember what I said about collecting judgments).
That’s why it’s essential to consider not just whether someone has insurance, but whether they have enough insurance. Unfortunately, many drivers carry only the bare minimum required by law, which may not be sufficient to cover serious injuries.
This is why I don’t say “Liability is King” or “Damage is King”. You can have clear liability and lots of damages, but if there is no insurance, that potentially could prevent any recovery for you.
It’s Not Just Liability Insurance
It’s not just about the at-fault driver’s liability insurance either. Your own insurance can play a big role too.
Uninsured or underinsured motorist coverage (explained here) steps in when the other driver doesn’t have enough insurance to cover your damages. And in New Mexico, where a significant percentage of drivers don’t carry insurance—or don’t carry enough—this can be a lifesaver. A study by the Insurance Research Council reports that New Mexico consistently ranks high (worst) in terms of the percentage of uninsured drivers on the road.
Uninsured motorist rates vary widely across the country, from 5.9% in Wyoming to 25.2% in the District of Columbia. Below are the states with the highest percentages of uninsured drivers on the road:
- District of Columbia: 25.2%
- New Mexico: 24.9%
- Mississippi: 22.2%
- Tennessee: 20.9%
What does this mean for you? Having good auto insurance coverage on your end is equally important.
And if you have 60 seconds, you can check out my short video explaining why I think underinsured/uninsured motorists’ coverage is must-have insurance.
The Bottom Line: You Can’t Count on Collections
If you're in a car accident, the idea that you could sue someone and take their assets to get paid is mostly a myth. What you really need to ask is, “Does this person have insurance?” and “How much insurance do they have?” Because in the car accident world, insurance is king, and without it—or without enough of it—that shiny court judgment isn’t worth much more than the paper it's printed on.
So, while we’d all love to live in a world where justice always comes with a payout, the truth is, insurance is the key to making sure you actually get compensated after an accident. Otherwise, you might be left holding a judgment, but not much else.
If you need help with your car accident claim, our 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 check out my free book, Car Accident Cases Made Simple(r), where I discuss this topic and more.
