A. A motor vehicle insurance policy shall:

1. (1) designate by explicit description or by appropriate reference all motor vehicles to which coverage is to be granted; and

2. (2) insure the person named in the policy and a person using any such motor vehicle with the express or implied permission of the named insured against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of the motor vehicle within a jurisdiction, subject to the requirement to provide evidence of financial responsibility pursuant to the Mandatory Financial Responsibility Act [66-5-201 to 66-5-239 NMSA 1978].

   B. A motor vehicle insurance policy shall insure a person named as insured against loss from the liability imposed upon the person by law for damages arising out of the use, with the express or implied permission of the owner or person in lawful possession, of a motor vehicle that the insured person does not own. The policy shall insure the person within the same territorial limits and in compliance with the requirement of evidence of financial responsibility as set forth in the Mandatory Financial Responsibility Act with respect to a motor vehicle insurance policy. A motor vehicle liability policy in which the described vehicle is a private passenger car is not required to provide liability insurance coverage for a non-owned truck tractor designed to pull a trailer or semitrailer.

   C. Permitted exceptions to coverage otherwise required by Subsections A and B of this section may include the following if excluded by the motor vehicle insurance policy:

3. (1) an automobile business exclusion;
4. (2) a furnished for regular use exclusion;
5. (3) a vehicle rented for business use exclusion if the exclusion is contained in the motor vehicle insurance policy and is enforceable;
6. (4) an exclusion for any liability of the United States government or its agencies when the provisions of the Federal Tort Claims Act apply;
7. (5) an exclusion for liability of the insured under any workers' compensation law;
8. (6) an exclusion for damages to property owned by, rented to, in the charge of or transported by an insured; provided, however, that this exclusion shall not apply to damages to a residence or private garage rented by an insured; and

9. (7) an exclusion to apply when a vehicle is rented to others or used to carry persons for a charge, including when a vehicle is being used while logged on to a transportation network company's digital network or while a driver provides a prearranged ride; provided, however, that this exclusion shall not apply to use on a shared expense basis.

   D. The motor vehicle insurance policy shall state the name and address of the insured, the coverage afforded by the policy, the premium charged, the policy period and the limits of liability. The policy shall also contain an agreement or endorsement that states that the insurance is:

10. (1) provided in accordance with the coverage defined in the Mandatory Financial Responsibility Act regarding bodily injury and death or property damage or both; and

11. (2) subject to all the provisions of that act.

    E. Every motor vehicle insurance policy shall be subject to the following provisions, which may be contained in the policy:

12. (1) the policy may not be canceled or annulled as to the liability of the insurance carrier with respect to the insurance required by the Mandatory Financial Responsibility Act by an agreement between the insurance carrier and the insured after the occurrence of the injury or damage;
13. (2) the satisfaction by the insured of a judgment for injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to pay on account of injury or damage;
14. (3) the insurance carrier has the right to settle a claim covered by the policy. If the settlement is made in good faith, the amount of the settlement is deductible from the limits of liability specified in the Mandatory Financial Responsibility Act; and

15. (4) the policy, the declarations page, the written application and a rider or an endorsement that does not conflict with the provisions of the Mandatory Financial Responsibility Act constitute the entire contract between the parties.

    F. A binder issued pending the issuance of a motor vehicle insurance policy is deemed to fulfill the requirements for the policy.

History: Laws 2003, ch. 171, § 1; 2016, ch. 80, § 23.

ANNOTATIONS

Cross references. — For the Federal Tort Claims Act, see 28 U.S.C. § 2671 et seq.

The 2016 amendment, effective May 18, 2016, permitted a motor vehicle insurance exception to coverage when a vehicle is being used for a transportation network company; in Subsection C, Paragraph (7), after "to carry persons for a charge", added "including when a vehicle is being used while logged on to a transportation network company’s digital network or while a driver provides a prearranged ride".

No direct claim. — The Mandatory Financial Responsibility Act does not state that a person who suffers damages has a direct claim against an insurance company. Little v. Gill, 2003-NMCA-103, 134 N.M. 321, 76 P.3d 639.

The district court's modification of an arbitration award to comply with the terms of plaintiff's insurance policy was supported by substantial evidence. — Where plaintiff was involved in an auto collision while operating a 2011 Ford truck, and where, at the time of the collision, plaintiff had an automobile insurance policy, which insured three vehicles, including the Ford truck, and included $100,000 in UM/UIM coverage per person per vehicle, and an off-road vehicle insurance policy, which insured plaintiff's Polaris RZR (razor), with defendant insurance company, and where, following the collision, plaintiff filed a complaint against the responsible party, an underinsured motorist, and defendant, and where, in an arbitration proceeding, the arbitration panel awarded plaintiff damages in the amount of $425,000, and where defendant moved to either vacate any award in excess of $275,000 or modify the award to limit it to $275,000 to comport with the terms of plaintiff's automobile insurance policy less a $25,000 settlement from the responsible party, the district court did not err in modifying the arbitration award to $275,000, because plaintiff's policy reflects that she insured three automobiles, each covered for up to $100,000 in damages, and therefore plaintiff may recover up to $300,000 for damages sustained from bodily injury for a single accident, reduced by $25,000 paid by the responsible party. In New Mexico, an insurer may offset its claim payment by the amount of liability proceeds actually received by the insured from the tortfeasor. Castillo v. Allstate Prop. & Cas. Ins. Co., 2023-NMCA-009.

Law reviews. — For comment, "A Third-Party Claimant Becomes an Insured: Hovet v. Allstate and the Expanding Right to Sue Under New Mexico Insurance Code," see 35 N.M. L. Rev. 651 (2005).