New Mexico Home Insurance Overview
Here are some things that all New Mexico homeowners should be aware of when shopping for coverage:
The average New Mexico home costs around $248,670
The average home price in New Mexico is around $248,670, according to The Ascent’s research on average home prices by state. The national average is $293,349. These below-average prices may 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 typically pay more
The five most expensive cities in New Mexico 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 a little extra time to compare home insurance quotes to make sure they’re getting the best deal possible.
What are the most common home insurance claims in New Mexico?
Here are some of the most common home insurance claims filed in New Mexico:
Forest fire damage
New Mexico has seen some of the largest wildfires in its history in recent years. These storms can be extremely costly as they can destroy entire towns, leaving little or nothing behind. Those who live in areas prone to wildfires generally pay more for home insurance.
There are some things homeowners can do to reduce their risk of filing a wildfire claim, such as cutting brush around the house. But sometimes there is nothing a homeowner can do to stop this kind of damage. That’s why it’s essential that owners review their policy’s coverage limits. It should provide enough protection to pay for a full rebuild, if needed.
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. This is partly why flooding is among the costliest home insurance claims.
Many people don’t know this, but flooding is actually not covered by a typical home insurance policy. Homeowners interested in coverage should purchase a separate flood insurance policy if they do not want to pay for flood damage out of pocket. Lenders may require homeowners with mortgages to carry flood insurance if they live in a flood-prone area.
New Mexico also experiences many earthquakes each year. Although most of them are small, a large earthquake can cause buildings to collapse, especially if they are older and do not meet modern building codes. They can also damage water and gas lines, which can lead to additional problems.
Most homeowners interested in earthquake protection should purchase an earthquake endorsement for their policy. This may include a separate earthquake deductible that is higher than the typical home insurance deductible. Homeowners must meet this deductible in the event of an earthquake before their insurance company pays anything for the damage.
Home 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 a year
Bundling home and auto insurance is the best way to save on home insurance with almost any company. In New Mexico, this will save homeowners about $442 per year on average.
Full payment offers surprising savings
Simply paying a home insurance premium all at once rather than in monthly installments can help homeowners save $130 a year. It may not be possible for everyone, but it’s the smartest game for those who can afford it. Homeowners who want to take advantage of this discount in the future should start saving now for their next home insurance premium so they’re ready to pay it in full.
Installing sprinklers can reduce the average home insurance premium by around $200
New Mexico homeowners looking to reduce their risk of fire-related damage should consider installing a sprinkler system. There is an upfront cost associated with this, but it brings major long-term benefits. Homeowners won’t have to worry as much about fire damage and they’ll save about $195 a year on their home insurance.
7 Cheapest Cities in New Mexico for Home Insurance
The following seven cities have the cheapest average New Mexico home insurance rates: