In 2022, the average cost of a full coverage auto policy in New Mexico was $1,449, according to data from Quadrant Information Systems. A year later, in 2023, that average premium has increased to $1,943. The 34.1% rise is the 10th highest of any state in the country.
Many factors contributed to the rise in the state’s auto premiums, with some specific to New Mexico. One major factor is the increase in healthcare costs. Claims payouts are the biggest expense for insurance companies, with medical claims being a significant portion of those payouts. Between December 2021 and December 2022, the consumer price index for medical expenses increased by 4.5%, leading to a noticeable effect on insurance payouts.
Another significant contributor to claims payouts is property damage. The cost of auto repairs and maintenance increased by 12% over the last year, leading to higher per-accident payouts for insurers. Additionally, the price of used cars increased by 24.5%, resulting in insurers paying more on average for total loss claims.
Car theft is also a common reason for auto insurance claims, with New Mexico having one of the highest rates of auto theft in the country. In 2021, the state saw 475.5 car thefts per 100,000 residents, with Albuquerque having one of the highest automobile theft rates in the country. The risk of car theft in major cities like Albuquerque contributes to more risk and payouts for insurers.
Overall, the combination of rising healthcare costs, increased property damage expenses, and high rates of car theft in New Mexico has led to a significant increase in auto insurance premiums in the state. Drivers in New Mexico may need to consider these factors when shopping for auto insurance and be prepared for potentially higher premiums in the future.