The Best Homeowners Insurance in New Mexico for 2023

The average cost of homeowners insurance in New Mexico is $1,790 per year, or about $149 per month, according to a NerdWallet analysis. That’s less than the national average of $1,820 per year.

We’ve analyzed rates and companies across the state to find the best homeowners insurance in New Mexico.

Note: Some insurance companies included in this article may have made changes in their underwriting practices and no longer issue new policies in your state. Even if an insurer serves your state, it may not write policies for all homes in all areas.

If you’re looking to buy homeowners insurance from a well-rated national brand, consider one of these insurers from NerdWallet’s list of the Best Homeowners Insurance Companies.

America’s largest home insurer celebrated its 100th anniversary in 2022. One useful endorsement you may be able to add to a State Farm policy is an inflation guard rider, which automatically increases your policy limits to make sure your coverage doesn’t fall short.

State Farm offers a free Ting device as a perk for home insurance policyholders. Ting is a smart plug that monitors your home’s electrical network to help prevent fires.

Homeowners policies from Farmers may include two valuable types of insurance: extended dwelling and replacement cost coverage. Extended dwelling coverage gives you extra insurance for the structure of your house, while replacement cost coverage offers higher reimbursement for stolen or destroyed belongings.

Some Farmers policies also come with perks that can save you money. For example, with claim forgiveness, Farmers won’t raise your rate for a claim as long as you haven’t filed one within the past five years.

Chubb generally serves affluent policyholders with high-value homes, offering lofty coverage limits and plenty of perks. For example, the company covers water damage from backed-up sewers and drains, and pays to bring your home up to the latest building codes during reconstruction after a claim. (Many insurers charge more for these types of coverage.)

New Mexico homeowners can also sign up for free Wildfire Defense Services. These services include personalized recommendations for protecting your home and deployment of firefighters to your house if a wildfire is approaching.

Rhode Island-based Amica stands out for its customer service and broad range of coverage options. The company has drawn significantly fewer consumer complaints to state regulators than expected for an insurer of its size, according to the National Association of Insurance Commissioners (NAIC).

You can customize your policy with extra coverage above your dwelling limit in case your house costs more to rebuild than expected. You may also want to add coverage for damage from water backups or recovery from identity theft.

We like Nationwide for its wide variety of coverage options. For example, its standard homeowners insurance policy generally includes ordinance or law coverage, which can help pay to bring your home up to current building codes after a covered claim. You can add other coverage for things like identity theft and damage from backed-up sewers and drains.

Depending on how much personal assistance you need, you can get a quote for homeowners insurance on the Nationwide website or work with a local agent instead. You can also use the website to pay bills, file claims or check claim status.

USAA sells homeowners insurance to veterans, active military members and their families. If that description fits you, you may want to consider a USAA policy. That’s because the company’s homeowners insurance has certain features that other insurers may charge extra for.

For example, USAA automatically covers your personal belongings on a “replacement cost” basis. Many companies pay out only what your items are worth at the time of the claim, which means you may not get much for older items. USAA pays enough for you to buy brand-new replacements for your stuff.

The average annual cost of home insurance in New Mexico is $1,790. That’s 2% less than the national average of $1,820.

In most U.S. states, including New Mexico, many insurers use your credit-based insurance score to help set rates. Your insurance score is similar but not identical to your traditional credit score.

In New Mexico, those with poor credit pay an average of $3,065 per year for homeowners insurance, according to NerdWallet’s rate analysis. That’s 71% more than those with good credit.

How much you pay for homeowners insurance in New Mexico depends on where you live. For instance, the average cost of home insurance in Albuquerque is $1,300 per year, while homeowners in Las Cruces pay $1,220 per year, on average.

Here are the insurers we found with average annual rates below the New Mexico average of $1,790.

New Mexico homeowners will need to consider several high-risk hazards when looking for home insurance, including windstorms, wildfire, flooding and earthquakes.

Windstorms are common in New Mexico and can result in damage to homes and uprooted trees. Damage caused by extreme winds is typically covered in a standard home insurance policy. However, read your policy closely, as you may have a separate wind and hail deductible. These deductibles are often a percentage of your dwelling coverage, such as 1% or 2%. If your house has $250,000 worth of dwelling coverage and a 1% wind deductible, you’d have to pay for the first $2,500 of wind damage yourself.

New Mexico is prone to wildfires, especially during dry and hot periods. Estimates put 86% of all property in New Mexico at risk of being affected by wildfire in the next 30 years. As a result, homeowners in high-risk parts of New Mexico are finding it difficult to insure their homes.

Standard homeowners insurance typically covers damage caused by fire, but residents of high-risk areas should read their policies closely to make sure they understand any exclusions. Pay particular attention to the dwelling coverage limit, which is how much the insurance company will pay to rebuild your house. Check with your insurer to ensure you have enough coverage to rebuild if necessary. Learn more about home insurance and wildfires.

While flooding may not happen frequently in New Mexico, heavy rain and flash floods can still pose risks. Standard homeowners insurance policies typically do not cover flood damage. As a result, homeowners in flood-prone areas may need to purchase separate flood insurance.

To learn more about your flood risk, check out the Federal Emergency Management Agency’s flood maps or visit RiskFactor.com, a website from the nonprofit First Street Foundation. Even if your property is deemed low risk, it may be worthwhile to purchase flood insurance for extra peace of mind.

You can purchase flood coverage at any time, but there’s typically a 30-day waiting period before the insurance takes effect. Here’s more information about flood insurance and waiting periods.

New Mexico is seismically active, though earthquakes are relatively infrequent in the state. Still, the earthquakes that do happen are becoming stronger, bringing with them the potential to damage homes. Standard homeowners insurance policies do not typically cover structural damage due to an earthquake. For that, you’d need additional earthquake insurance.

If you buy earthquake insurance, pay attention to the deductibles, so you know the potential out-of-pocket costs. Earthquake insurance often has a separate deductible, which can be 10% to 20% of your dwelling coverage. For example, if you have a 20% earthquake deductible and $200,000 of dwelling coverage, you would need to pay $40,000 for earthquake damage before your insurance covers anything.

The New Mexico Office of Superintendent of Insurance oversees the state’s insurance industry and provides consumer information and protections. In addition to providing FAQs about the insurance industry, the office is a resource if you need to file a complaint against your insurer with an online complaint form. You can also contact the Consumer Assistance Bureau at 505-827-4549.

Amanda Shapland contributed to this story.