Disaster sometimes strikes without warning, and that’s why it’s important to have a robust homeowners insurance policy. The best coverage plan for your home doesn’t automatically mean it has to break the bank. With a little bit of due diligence on your part, you can protect both your home and your wallet. We’ve conducted hours of research on New Mexico insurance providers and whittled down our list based on financial ratings, quality of service, and cost.

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

Enter Your ZIP Code:

 

The Best Homeowners Insurance in New Mexico

Freshome’s Recommendations: State FarmAmicaLiberty MutualFarmersTravelers Insurance, Nationwide.

For our sample quote, we used a three-bedroom, two-bath, 1,506-square-foot home in Albuquerque, with an estimated reconstruction value of $260,000. We listed the home as having a security system and smoke detectors and chose a $2,000 deductible.In order to provide you with the best homeowners insurance options, we researched and received quotes from our top three recommended companies. Keep in mind that every home and homeowner have unique variables that will factor into a quote, which means quotes vary widely. It’s important for you to shop around for your own quotes.

For all of our quotes, we picked an HO3 policy because it offers the most comprehensive coverage at an affordable price. HO1 and HO2 policies cost significantly less, but they also cover much less than an HO3 policy, which means you run the risk of paying out of pocket if disaster strikes. An HO5 policy is very similar to an HO3, but it covers additional named perils, which also means that the costs will be higher. An HO3 offers a happy medium, as you will pay less than a higher coverage policy, while at the same time having enough coverage.

We also factored in financial strength when comparing companies. Financial strength is important to ensure that an insurance company can pay out many claims at once in the event of a natural disaster. In order for Freshome to recommend a company, it had to meet the following criteria: a high rating from Moody’s, a rating of B+ or higher with financial ratings service A.M. Best., three stars or more from J.D. Power Overall Satisfaction rating.

Our Quotes
Amica$862 Per Year
Liberty Mutual$938 Per Year
State Farm$1,145 Per Year

Amica ranked the highest across the board in both overall satisfaction and financial strength; it was also the least expensive of the three quotes we received. However, every policy is unique and it may not end up being the least expensive when you factor in your own variables. Before you purchase your own policy, you should compare several quotes based on your specific situation in order to determine the best price.

What You Should Know Before Getting a Quote

Homeowners insurance is not required by law, although many mortgage lenders do require you to have it in order to secure a loan. However, coverage is critical to avoiding a tremendous financial burden, or losing your home entirely in the event of a disaster. The best way to find a policy for your home with comprehensive coverage at an affordable rate is by shopping around for several quotes yourself. Here are a few things to keep in mind in order to save some money and still find the best homeowners insurance in New Mexico.

Don’t Do It Alone

While most major insurance companies offer online tools that can help you get a quote in a matter of minutes, this method isn’t the best way to find coverage that fits all of your needs and your budget. Independent insurance agents are a great resource to guide you through the process. An independent agent can help you gather multiple quotes from different companies and understands coverages, so they can make sure you get a really good price without giving up coverage, explained Brad Cummins, co-owner of Insurance Market Agents, an independent insurance agency.

“A good agent will make sure that you are comparing coverages, not just the price alone. Most consumers only compare price when shopping for home insurance. Buying based solely on price, and not proper coverage, can be a costly mistake in the event of a loss,” said Cummins.

Which Type Of Coverage Is Best

There are a few different types of homeowners insurance policies, each labeled “HO” for short. While the types of perils covered will vary, every standard homeowners insurance policy covers the structure of your home, including the plumbing, heating, and air conditioning, as well as, any other structures on your property. They also cover loss of your personal property due to theft. A standard homeowners insurance policy covers liability in case you are sued for injuries or damages to someone visiting your property, medical expenses for any injuries incurred to others in your home, and increased cost of living (AKA temporary housing) while your home is being repaired.

Your specific coverage only applies to the perils that are defined in your policy. The lowest level policies are HO1 and HO2, which offer the most basic coverage from a list of specifically named perils. An HO2 covers slightly more perils than an HO1. It can be tempting to choose one of these policies when you are looking to save money, as the premiums are significantly less. However, with less coverage you can end up spending a lot more in the event of a claim.

Freshome recommends an HO3 policy, which is easily the most popular homeowners policy, because it covers both open perils and named perils. With an open perils policy the structure of your home is covered for any damage other than the perils that are specifically listed, which means that most perils are covered. The named perils portion of the policy covers the contents of your home under a set of listed perils. While you will pay more for an HO3, it’s still not the most expensive coverage on the market, and it will end up saving you money in the long run if you need to make a claim.

Calculating How Much Coverage You Really Need

There are many factors to consider when determining your level of coverage, and the more prepared you are with the right information about your home, the more accurately an agent will be able to calculate the right amount of coverage for you. Here are a few things you should know before you meet with an agent:

  • Reconstruction Cost: The reconstruction cost of your home is not the same as the market value. It’s the amount it would cost to rebuild your house from the ground up. “You want to know as much about the construction as possible, like the age of the roof, plumbing, furnace and the electrical system,” said Cummins. When determining reconstruction cost, most insurance carriers pull data, like the square footage, number of bathrooms, and size of the garage from the county auditor. The auditor does not pull in data about any interior finishes, such as flooring, however, so you will want to give your agent these details, especially if you have a finished basement, Cummins explained.
  • Special Items: If you own any items of significant value, like jewelry or art, they may not be covered for their full value, as personal possessions are typically capped at a specific dollar amount. You should make an inventory list and have these items appraised so that you can ensure that you are covered for the correct amount.
  • Additional Coverages: You’ll need to decide if you would like to include additional endorsements for things that are not covered by a standard policy, like nannies and caretakers that work in your home, a home-based business, any third party that rents space on your property, as well as flooding and earthquake coverage. None of these are automatically covered and require additional coverage which will cost more.

Simple Steps To Save Money

You don’t want to scrimp on coverage because it will end up costing you more in the event of a claim. Instead, look for ways to lower the cost of the premium price.

“I think the most underestimated way to save money is by maintaining a good insurance credit score. The better your credit score, the lower your premiums will be,” – Brad Cummins

Besides maintaining good credit, Cummins also suggested bundling your home and auto insurance to get a discount. Adding auto insurance under the same carrier, can give you a 10–20 percent discount, depending on the company. Some companies also offer a discount of up to 5 percent if your mortgage is already paid off. You might also be able to get a discount for shopping early and receiving a quote at least 8–10 days before you need your policy to begin, Cummins said.

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

Enter Your ZIP Code:

 

Why Are New Mexico’s Rates So Low?

There are several factors that contribute to insurance premiums, including a state’s economy, climate, and geographical terrain. The average homeowners insurance premium in the United States in 2013 was $1,096, according to a February 2016 study by the National Association of Insurance Commissioners. New Mexico’s average in the same year was $898. The quotes that we received average around $981.

Thanks to the growing housing market and tourism industry, New Mexico’s economy is finally beginning to show signs of recovery after facing several years of high unemployment rates and low job growth. If things continue to steadily improve as they have, rates may begin to increase as well.

The climate of a state can also have a big impact on the cost of homeowners insurance. New Mexico is rated among the least disaster prone states in the country. That’s not to say disasters don’t ever occur. New Mexico has faced floods, wildfires, and earthquakes in the past, but compared to other states, the threat of natural disasters is fairly low, which also works to keep the insurance rates on the lower end.

FAQs

What are some common coverage gaps?

One of the biggest gaps in coverage for many homeowners insurance policies is in the valuation of the house. Many homes are underinsured because the reconstruction cost was not calculated correctly. Make sure you give as much information as possible about the structure of your home when getting a quote. It’s also important to keep your coverage up to date and re-evaluate costs after you’ve made any significant upgrades or renovations.

Are additional coverages necessary?

While New Mexico may not be prone to disasters, the fact is that natural disasters do still occur, and when they have hit, they’ve been devastating. All it takes is one unlikely event to wreak havoc and destroy your home, so it’s important to be prepared. Flood and earthquake insurance are not covered under most standard policies, so in order to fully protect your home and avoid financial loss during a disaster, it is recommended that you purchase these additional coverages. “In general, any water that comes in from the outside is not covered,” said Bill Begal, Founder and President of Begal Enterprises, a disaster restoration company. Water from the inside of a structure, from a toilet, or broken pipe, but not a drain, will be covered. Begal also suggested adding coverage for dust storms in New Mexico, unless it is already included in your policy.

What deductible should I choose?

Choosing a higher deductible will save you money on your premium, but it means that you will be required to pay more out of pocket before your insurance company will pay out a claim. It’s important to remember that a homeowners insurance policy is meant to protect you in the event of major damage, not for something smaller than your deductible amount. Just make sure that the amount you choose fits within your budget, should it become necessary to make a claim.

Take Action

Finding the best homeowners insurance policy at an affordable rate requires some time and research. Don’t jump at the first policy you find; instead compare rates and coverage from multiple companies. “Be an educated and informed consumer.  Speak to neighbors, interview a few insurance agents, get their experiences and perspectives.  Evaluate what you need and don’t need for coverages,” said Begal. It can be an overwhelming process so don’t be afraid to tap into resources, like an independent agent, who can help you sort through the options and consider factors you might otherwise overlook.

Freshome’s Recommendations: State FarmAmicaLiberty MutualFarmersTravelers Insurance, Nationwide.

Compare Homeowners Insurance Rates

To quickly find and compare rates in your area, enter your ZIP code below.

Enter Your ZIP Code: