New Mexico Code § 66-5-301

A. No motor vehicle or automobile liability policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person and for injury to or destruction of property of others arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in New Mexico with respect to any motor vehicle registered or principally garaged in New Mexico unless coverage is provided therein or supplemental thereto in minimum limits for bodily injury or death and for injury to or destruction of property as set forth in Section 66-5-215 NMSA 1978 and such higher limits as may be desired by the insured, but up to the limits of liability specified in bodily injury and property damage liability provisions of the insured's policy, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, and for injury to or destruction of property resulting therefrom, according to the rules and regulations promulgated by, and under provisions filed with and approved by, the superintendent of insurance.
B. The uninsured motorist coverage described in Subsection A of this section shall include underinsured motorist coverage for persons protected by an insured's policy. For the purposes of this subsection, "underinsured motorist" means an operator of a motor vehicle with respect to the ownership, maintenance or use of which the sum of the limits of liability under all bodily injury liability insurance applicable at the time of the accident is less than the limits of liability under the insured's uninsured motorist coverage. No motor vehicle or automobile liability policy sold in New Mexico shall be required to include underinsured motorist coverage until January 1, 1980.
C. The uninsured motorist coverage shall provide an exclusion of not more than the first two hundred fifty dollars ($250) of loss resulting from injury to or destruction of property of the insured in any one accident. The named insured shall have the right to reject uninsured motorist coverage as described in Subsections A and B of this section; provided that unless the named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal policy where the named insured has rejected the coverage in connection with a policy previously issued to him by the same insurer.
History: 1953 Comp., § 64-5-301, enacted by Laws 1978, ch. 35, § 325; 1979, ch. 96, § 1; 1981, ch. 356, § 30; 1983, ch. 318, § 39.
Cross references. — For the superintendent of insurance, see 59A-2-1 NMSA 1978 et seq.
Severability clauses. — Laws 1983, ch. 318, § 45, provided for the severability of the act if any part or application thereof is held invalid.
I. GENERAL CONSIDERATION.
A. GENERALLY.
Application of contract law. — When there are no overriding public policy considerations to the contrary, the obligations of an insurer on an underinsured motorist policy are determined by applying principles of contract law. March v. Mountain States Mut. Cas. Co. , 1984-NMSC-092, 101 N.M. 689, 687 P.2d 1040.
Duty of insurer to disclose policy provisions to all insureds. — Where the insurer had actual knowledge of the plaintiff's status as a class-two insured who suffered an injury that was compensable under the insurer's insurance policy while the plaintiff was a passenger in the insured motor vehicle, the insurer had an affirmative duty to disclose to the plaintiff the availability of insurance coverage and the terms and conditions governing that coverage and where the insurer failed to inform the plaintiff of the plaintiff's rights and responsibilities under the insurance policy, including the existence of a consent-to-settle exclusionary provision in the insurance policy, the insurer breached its duty of disclosure and is equitably estopped from enforcing the consent-to-settle exclusionary provision to deny or limit the plaintiffs' entitlement to underinsured motorist benefits. Salas v. Mountain States Mut. Cas. Co. , 2009-NMSC-005, 145 N.M. 542, 202 P.3d 801.
Rule requiring insurers to adequately disclose limitations of minimum uninsured motorist coverage applied retroactively. — Where plaintiffs brought putative class actions against their respective insurers, asserting several claims, including violations of the New Mexico Unfair Insurance Practices Act and negligent misrepresentation, alleging that defendants sold them illusory underinsured motorist coverage, and where defendants claimed that a new rule established by the New Mexico Supreme Court, which required insurers to adequately disclose limitations of minimum uninsured motorist coverage, applied prospectively, and, as a result, granted them immunity from prior misrepresentation claims as to minimum limit underinsured motorist coverage, defendants' claims were without merit, because New Mexico applies a presumption that a new rule adopted by a judicial decision in a civil case will operate retroactively, and defendants failed to overcome this presumption. Belanger v. Allstate Fire & Cas. Ins. Co. , 588 F.Supp.3d 1249 (D. N.M. 2022); Schwartz v. State Farm Mut. Auto. Ins. Co. , 584 F.Supp.3d 1007 (D. N.M. 2022).
Tort Claims Act limitations do not apply. — An insured carrying under-insured motorist coverage is legally entitled to damages exceeding the limits established by Section 41-4-19 NMSA 1978 of the Tort Claims Act, when the insured is injured by a government employee driving a government-owned vehicle and makes a claim against her insurer for damages that exceed those limits. Boradiansky v. State Farm Mut. Auto. Ins. Co. , 2007-NMSC-015, 141 N.M. 387, 156 P.3d 25.
Legislative purpose. — Legislative purpose in creating compulsory uninsured motorist coverage was to place the injured policy-holder in the same position, with regard to the recovery of damages, that he would have been in if the tortfeasor had possessed liability insurance. Sandoval v. Valdez , 1978-NMCA-016, 91 N.M. 705, 580 P.2d 131, cert. denied, 91 N.M. 610, 577 P.2d 1256; Wood v. Millers Nat'l Ins. Co. , 1981-NMSC-086, 96 N.M. 525, 632 P.2d 1163.
UM/UIM requirements do not apply to association of counties. — The requirements of Subsection A of Section 66-5-301 NMSA 1978, pertaining to uninsured and underinsured motorist coverage does not apply to a group of counties that pool their financial resources under Sections 3-62-1 and 3-62-2 NMSA 1978 to satisfy claims against the individual members of the group. Romero v. Board of Cnty. Comm'rs of Taos Cnty. , 2011-NMCA-066, 150 N.M. 59, 257 P.3d 404, cert. denied, 2011-NMCERT-005, 150 N.M. 666, 265 P.3d 717.
Where plaintiff, who was an employee of defendant, was injured in a motor vehicle accident while driving a county vehicle during the course of defendant's employment with the county; plaintiff received a settlement for the policy limits of the insurance policy of the driver of the other vehicle and made a claim for UM/UIM coverage against the county's insurance coverage; the county provided liability coverage through a coverage agreement with the New Mexico Association of Counties which maintained a pool of contributions by member counties to fund property and liability losses; and the coverage agreement did not include UM/UIM coverage, the requirements of Subsection A of Section 66-5-301 NMSA 1978 did not apply to the Association of Counties and it was not required to offer UM/UIM coverage. Romero v. Board of Cnty. Comm'rs of Taos Cnty. , 2011-NMCA-066, 150 N.M. 59, 257 P.3d 404, cert. denied, 2011-NMCERT-005, 150 N.M. 666, 265 P.3d 717.
Legislative purpose. — The purpose of this statute is to assure that in the event of an accident with an underinsured vehicle an insured motorist entitled to compensation will receive at least the sum certain in underinsurance coverage purchased for his or her benefit. To the extent the amount of other available insurance proceeds from responsible underinsured tortfeasors does not equal or exceed the amount of coverage purchased, the underinsured motorist carrier must satisfy the difference. Fasulo v. State Farm Mut. Auto. Ins. Co. , 1989-NMSC-060, 108 N.M. 807, 780 P.2d 633.
The uninsured motorist statute was intended to expand insurance coverage and to protect individual members of the public against the hazard of culpable uninsured motorists. Romero v. Dairyland Ins. Co. , 1990-NMSC-111, 111 N.M. 154, 803 P.2d 243.
By requiring insurers to offer uninsured motorist coverage, the legislature wanted to encourage insureds to purchase such coverage. Montano v. Allstate Indem. Co. , 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255.
Design of uninsured motorists' insurance. — The policy behind uninsured motorist coverage is to compensate those persons injured through no fault of their own. State Farm Auto. Ins. Co. v. Kiehne , 1982-NMSC-023, 97 N.M. 470, 641 P.2d 501.
Policy considerations. — New Mexico's public policies are to encourage arbitration and to provide protection from uninsured drivers. State Farm Mut. Auto. Ins. Co. v. Barker , 2004-NMCA-105, 136 N.M. 211, 96 P.3d 336.
Financial responsibility law distinguished. — Policy required under financial responsibility law is for protection of public generally, while uninsured motorist insurance is for individuals who have the foresight to protect themselves against a financially irresponsible motorist. Farmers Alliance Mut. Ins. Co. v. Bakke , 619 F.2d 885 (10th Cir. 1980).
Liberal construction. — The uninsured motorist statute is liberally interpreted in order to implement its remedial purpose, and language in the statute that provides for an exception to uninsured coverage should be construed strictly to protect the insured. Romero v. Dairyland Ins. Co. , 1990-NMSC-111, 111 N.M. 154, 803 P.2d 243.
Coverage not required in excess policies. — This section does not apply beyond a motorist's primary automobile insurance policy; therefore, in an excess policy, there is no statutory requirement mandating the inclusion of uninsured motorist or underinsured motorist coverage. Archunde v. International Surplus Lines Ins. Co. , 1995-NMCA-110, 120 N.M. 724, 905 P.2d 1128, cert. denied, 120 N.M. 533, 903 P.2d 844.
Geographical coverage. — This section does not require limitless geographical motor vehicle insurance coverage against losses caused by negligent, uninsured motorists. Dominguez v. Dairyland Ins. Co. , 1997-NMCA-065, 123 N.M. 448, 942 P.2d 191, cert. denied, 123 N.M. 446, 942 P.2d 189.
Superintendent possesses authority to approve substitute uninsured motorist endorsement that does not precisely conform to the endorsement prescribed in the uninsured motorist regulations. McMillian v. Allstate Indem. Co. , 2004-NMSC-002, 135 N.M. 17, 84 P.3d 65.
Lawful delegation of authority to superintendent. — The authority granted by Section 64-24-105, 1953 Comp. (similar to this section), to the superintendent of insurance to prescribe regulations relating to uninsured motorist insurance is a lawful delegation of authority to an administrative agency. Willey v. Farmers Ins. Group , 1974-NMSC-054, 86 N.M. 325, 523 P.2d 1351, overruled on other grounds by Foundation Reserve Ins. Co. v. Marin , 1990-NMSC-022, 109 N.M. 533, 787 P.2d 452.
Superintendent has power to prescribe endorsement. — Under this section, the superintendent of insurance has the power to prescribe a standard or uniform endorsement that governs uninsured motorist coverage. Sandoval v. Valdez , 1978-NMCA-016, 91 N.M. 705, 580 P.2d 131, cert. denied, 91 N.M. 610, 577 P.2d 1256 (specially concurring opinion).
Underinsured motorist property damage coverage. — New Mexico law requires that insurers offer underinsured motorist coverage for property damage. Gulbransen v. Progressive Halcyon Ins. Co. , 2010-NMCA-082, 148 N.M. 585, 241 P.3d 183, cert. denied, 2010-NMCERT-008, 148 N.M. 942, 242 P.3d 1288.
The uninsured motorists' statute does not require uninsured/underinsured motorist liability coverage in umbrella policies. Pielhau v. RLI Ins. Co. , 2008-NMCA-099, 144 N.M. 554, 189 P.3d 687, cert. quashed, 2009-NMCERT-002, 145 N.M. 705, 204 P.3d 30, overruled by Progressive Nw. Ins. Co. v. Weed Warrior Servs. , 2010-NMSC-050, 149 N.M. 157, 245 P.3d 1209.
Liability in a no-fault state. — A passenger injured in an automobile accident in Hawaii was not entitled to uninsured motorist benefits since Hawaii's no-fault statutes prohibited collection of noneconomic damages; it was not a lack of insurance that restricted liability, rather it was the law of Hawaii that had that effect. State Farm Auto. Ins. Co. v. Ovitz , 1994-NMSC-047, 117 N.M. 547, 873 P.2d 979.
Absent exclusionary clause, insurer liable for punitive damages. — Where the language of insured's policy was virtually identical to the language of this section, the insurer was on notice that the prevailing trend, absent an express exclusion in the policy, is to impose liability under uninsured motorists' insurance for punitive damages, and was therefore responsible for punitive damages up to the policy limit since it failed to incorporate an exclusionary clause into the policy. Stewart v. State Farm Mut. Auto. Ins. Co. , 1986-NMSC-073, 104 N.M. 744, 726 P.2d 1374.
B. INVALID PROVISIONS.
Definition of spouse. — An insurance policy containing an express exclusion limiting a spouse's coverage based on a definition of "spouse" limited to "your husband or wife while living with you" was void. Loya v. State Farm Mut. Ins. Co. , 1994-NMSC-122, 119 N.M. 1, 888 P.2d 447.
Coverage of consortium claims. — The provision of a policy limiting coverage for loss of consortium claims to damages caused by "bodily injury to an insured" does not comply with New Mexico's uninsured motorist statute and is unenforceable. State Farm Mut. Auto Ins. Co. v. Luebbers , 2005-NMCA-112, 138 N.M. 289, 119 P.3d 169, cert. quashed 140 N.M. 675, 146 P.3d 810.
Family exclusions. — Family exclusions in liability and uninsured or underinsured motorist coverage offered through umbrella policies implicate a fundamental principle of justice and are contrary to New Mexico public policy. GEICO v. Welch , 2004-NMSC-014, 135 N.M. 452, 90 P.3d 471.
Exclusion for accidents not involving contact with uninsured vehicle. — The exclusion of uninsured motorist coverage for accidents not involving physical contact with the uninsured vehicle violates New Mexico public policy and is unenforceable. Demir v. Farmers Texas Cnty. Mut. Ins. Co. , 2006-NMCA-091, 140 N.M. 162, 140 P.3d 1111.
Exclusion of government-owned vehicles. — An insurance policy provision that excludes all government-owned vehicles from the definition of an "uninsured motor vehicle" is unenforceable because it violates the public policy of the Uninsured Motorist Act. Boradiansky v. State Farm Mut. Auto. Ins. Co. , 2007-NMSC-015, 141 N.M. 387, 156 P.3d 25.
Construction of arbitration clause. — A limited de novo appeal provision in an insurance contract violates public policy and is therefore void. Unequal access to an appeal is unenforceable. Padilla v. State Farm Mut. Auto. Ins. Co. , 2003-NMSC-011, 133 N.M. 661, 68 P.3d 901.
Arbitration provision providing for limited de novo appeal substantively unconscionable. — The limited de novo appeal provision in an insurance contract, providing for mandatory arbitration which would be binding on both parties for any award of damages not exceeding the limits of the Mandatory Financial Responsibility Act but providing for de novo appeal by either party of awards over that amount, violates public policy and is void as substantively unconscionable. Padilla v. State Farm Mut. Auto. Ins. Co. , 2003-NMSC-011, 133 N.M. 661, 68 P.3d 901.
Provision in policy limiting insured's time for bringing action. — As this section contains no time limit in which the insured can exercise his rights, an exclusionary provision in the liability policy which limits the insured's time for bringing an action to one year violates the three-year statute of limitations of Section 37-1-8 NMSA 1978 for bringing a personal injury suit, deprives the insureds of their uninsured motorist coverage, and is void as against public policy. Sandoval v. Valdez , 1978-NMCA-016, 91 N.M. 705, 580 P.2d 131, cert. denied, 91 N.M. 610, 577 P.2d 1256.
Coverage cannot be limited to particular location or vehicle. — An exclusion of uninsured motorist coverage, in an automobile insurance policy, when the insured is occupying an uninsured motor vehicle owned by him at the moment of injury is invalid, because it is not the intent of Section 64-24-105, 1953 Comp. (similar to this section), to limit coverage for an insured to a particular location or a particular vehicle. Chavez v. State Farm Mut. Auto. Ins. Co. , 1975-NMSC-011, 87 N.M. 327, 533 P.2d 100.
Underinsured coverage may only be limited by the conditions imposed by statute and not by additional conditions under the contract such as the household exclusion. Martinez v. Allstate Ins. Co. , 1997-NMCA-100, 124 N.M. 36, 946 P.2d 240.
Exclusion of insured's vehicle invalid. — Policy provision excluding from uninsured motorist coverage uninsured vehicles owned by or furnished or available for the regular use of the insured or any family member was incompatible with the stated purposes of the uninsured motorist insurance statute, and therefore invalid. Foundation Reserve Ins. Co. v. Marin , 1990-NMSC-022, 109 N.M. 533, 787 P.2d 452.
"Other insurance" provision limiting liability. — "Other insurance" provision in uninsured motorist clause limiting insurer's liability, in case of bodily injury to insured while occupying a highway vehicle not owned by the insured, to the excess amount over any other similar insurance available to such insured and applicable to such vehicle as primary insurance, and limiting total recovery to the amount by which the limit of liability for the insured exceeded the applicable limit of liability of such other insurance, was invalid, since Section 64-24-105, 1953 Comp. (similar to this section), provided for a minimum, but not a maximum, amount of protection. Sloan v. Dairyland Ins. Co. , 1974-NMSC-019, 86 N.M. 65, 519 P.2d 301.
Dollar for dollar reduction in coverage. — An application of a policy provision as a dollar for dollar reduction in the coverage under the uninsured motorist clause which results in a direct reduction in its coverage below the minimum provided by statute is invalid. Am. Mut. Ins. Co. v. Romero , 428 F.2d 870 (10th Cir. 1970).
Worker's compensation offset unenforceable. — An insurance company which provides both workers' compensation insurance and uninsured motorist coverage for a particular automobile accident is not entitled, under a written provision of the uninsured motorist policy, to offset the amount recovered by the injured party under the workers' compensation policy against any amount which may be payable under the uninsured motorist policy. The offset clause of the automobile liability policy contravenes both public policy and the express language of this section, uninsured motorist statute, and is therefore unenforceable. Continental Ins. Co. v. Fahey , 1987-NMSC-122, 106 N.M. 603, 747 P.2d 249.
C. ACTIONS AGAINST INSURER.
Enforceability of limitations clauses based on the date of the accident. — A time-to-sue limitations clause in a UM/UIM contract based solely on the date of the accident without consideration of the actual accrual of the right to make a UM/UIM claim is unreasonable and unenforceable as a matter of law. In the absence of a valid contractual provision to the contrary, a suit against a UM/UIM carrier is not barred if brought within six years after the carrier has refused to honor its UM/UIM obligations, as provided in the breach-of-contract limitations period set forth in 37-1-3(A) NMSA 1978. Whelan v. State Farm Mut. Auto. Ins. Co. , 2014-NMSC-021.
Where the decedent was in a parked truck when it was hit by a moving vehicle in July 2002; the collision resulted in severe injuries and ultimately in the decedent's death in March 2004; plaintiff made demand on defendant in June 2011 for underinsured motorist coverage to equalize the UM/UIM coverage under the decedent's insurance policy; and the policy provided that any suit against the insurer would be barred unless commenced within six years after the date of the accident, the limitation provision was unreasonable and unenforceable as a matter of law. Whelan v. State Farm Mut. Auto. Ins. Co. , 2014-NMSC-021.
Accrual of cause of action. — Where neither the uninsured motorist statute nor the insurance policy provides otherwise, the six-year limitations period for contract actions begin to accrue on a claim under an uninsured motorist policy on the date of the earliest event in the nature of a breach of the insurance contract. Brooks v. State Farm Ins. Co. , 2007-NMCA-033, 141 N.M. 322, 154 P.3d 697.
"Legally entitled to recover" construed. — The phrase "legally entitled to recover" in Subsection A merely requires that the determination of liability be made by legal means, and does not constitute a barrier to court action where agreement and arbitration have failed to determine the amount the insured may recover. Wood v. Millers Nat'l Ins. Co. , 1981-NMSC-086, 96 N.M. 525, 632 P.2d 1163.
Estate of deceased worker not entitled to recover under employer's uninsured motorist insurance. — Where estate of decedent sought to recover damages under decedent's employer's uninsured/underinsured motorist coverage after decedent was killed in the course of his employment by a co-worker operating an employer-owned motor vehicle, decedent's estate was not entitled to recover damages under the employer's uninsured motorist insurance, because the uninsured motorist statute, 66-5-301(A) NMSA 1978, only benefits persons "legally entitled to recover damages from owners or operators of uninsured motor vehicles", and under the Workers' Compensation Act (WCA), 52-1-1 to -70 NMSA 1978, an employee who was injured in a workplace accident caused by an employer or its representative may only seek a remedy authorized under the WCA, and under the WCA such a employee is not legally entitled to recover damages under the uninsured motorist statute. Vasquez v. American Cas. Co. of Reading , 2017-NMSC-003.
Direct suit against insurance carrier authorized. — This section does not prohibit an insured from bringing a direct action against the insurer nor does it require an action against the uninsured motorist to establish liability and damages. The damages an insured is legally entitled to recover can be determined as easily in a direct suit against the insurance carrier as in a suit against the uninsured motorist. Furthermore, the Rules of Civil Procedure allow the insurance company to demand a joinder of the tort-feasor. Guess v. Gulf Ins. Co. , 1981-NMSC-044, 96 N.M. 27, 627 P.2d 869.
Direct suit against insurer. — A direct action by an insured against an insurer for uninsured motorist benefits is permissible. Wood v. Millers Nat'l Ins. Co. , 1981-NMSC-086, 96 N.M. 525, 632 P.2d 1163.
Accrual of cause of action. — The limitations period on the claim of an insured against his uninsured motorist carrier for injuries sustained while occupying an automobile not owned by him would not begin to run until his claim against the automobile's insurer was finally adjudicated. Ellis v. Cigna Prop. & Cas. Cos. , 1999-NMSC-034, 128 N.M. 54, 989 P.2d 429.
Notice of consent-to-settle exclusion. — Insurer has a duty to put a class 2 insured, once identified, on notice of a consent-to-settle exclusion in its policy and is estopped from enforcing its exclusionary provisions if it fails to put the insured on notice. Salas v. Mtn. States Mutual Casualty Co. , 2007-NMCA-161, 143 N.M. 113, 173 P.3d 35, cert. granted, 2007-NMCERT-012, modified by 2009-NMSC-005, 145 N.M. 542, 202 P.3d 801.
The Uninsured Motorist Act does not cover loss-of-use damages arising from personal property theft. — Where insureds brought an action against their insurer, seeking a declaratory judgment and asserting claims for breach of contract, breach of implied covenant of good faith and fair dealing, and violations of New Mexico's Unfair Practices Act and Unfair Insurance Practices Act, following the denial of coverage under their automobile and homeowners policies, and where the insurance company moved to dismiss, claiming, inter alia, that the insurance policies do not cover the theft in this case because the theft that the insureds allege did not involve an uninsured vehicle driven by a third party which is required by both the policy and New Mexico law to recover uninsured motorist benefits, the insureds' claim for uninsured motorist benefits was dismissed, because § 66-5-301 NMSA 1978, as a whole, contradicts the notion that uninsured motorist policies must provide coverage where there has been no "accident," and where the operator of an uninsured motor vehicle did not cause the claimed loss. Young v. Hartford Cas. Ins. Co. , 503 F. Supp. 3d 1125 (D. N.M. 2020).
Punitive damages are not available against an unknown tortfeasor. — Where plaintiff's vehicle, which was stolen from an auto repair shop, was found unoccupied and crashed, and where plaintiff brought an action against insurer to recover uninsured motorist benefits for damages to the stolen vehicle and for punitive damages, the court denied the request for punitive damages because the purpose of punitive damages is to punish the tortfeasor and to deter others from the commission of like offenses, but when an unknown tortfeasor cannot be punished for his culpable behavior, punitive damages do not have the desired effect of punishment and deterrence. Because punitive damages would fail to serve their function when issued against an unknown tortfeasor, plaintiff was not legally entitled to recover punitive damages under his uninsured motorist coverage. Ammons v. Sentry Ins. Co ., 431 F. Supp. 3d 1280 (D. N.M. 2019).
II. REJECTION OF COVERAGE.
Insurers must provide basic information about stacking to prospective insureds. — Insurers, in their offers of coverage, must include basic information about stacked, or aggregated, benefits that insureds may be entitled to recover if they pay multiple premiums for UM/UIM coverage on multiple vehicles, so that insurers' offers are meaningful and any associated rejections or waivers by insureds are effective. Ullman v. Safeway Ins. Co ., 2023-NMSC-030, rev'g 2017-NMCA-071, 404 P.3d 434 and rev'g in part 2018-NMCA-051, 424 P.3d 665.
New rule that insurers must provide basic information about stacking to prospective consumers is to be given selective prospective effect. — The requirement to disclose information about stacking in offers of UM/UIM insurance favors prospective application as it is a new and not easily foreshadowed aspect of New Mexico jurisprudence, and it would be inequitable to apply the stacking disclosure requirement to insurers before they have had an opportunity to ensure compliance. Ullman v. Safeway Ins. Co ., 2023-NMSC-030, rev'g 2017-NMCA-071, 404 P.3d 434 and rev'g in part 2018-NMCA-051, 424 P.3d 665.
In consolidated cases, where in each case a consumer purchased an automobile insurance policy providing liability coverage for multiple vehicles but rejected any uninsured/underinsured motorist coverage (UM/UIM), and where each insured was then involved in an accident with an underinsured or uninsured motorist and sought UM/UIM benefits from their insurers, and where, in each case, the insurer denied the claim on the basis that the insured had rejected UM/UIM coverage by signing and returning a selection/rejection form indicating rejection, and where the insureds then sued for breach of contract, insurance bad faith, and other causes of action, arguing that for a rejection of UM/UIM coverage on multiple vehicles to be effective, an insurer must have provided information about stacked coverages in its offer, including information about the premium costs per vehicle, and that the insurers failures to include such information meant, as a matter of law, that their offers of UM/UIM coverage were not meaningful and the rejections the insureds submitted were ineffective, the New Mexico Supreme Court created a new rule that insurers, in their offers of coverage must include information about stacked (or aggregated) benefits that insureds may be entitled to recover if they pay multiple premiums for UM/UIM coverage on multiple vehicles, because to secure a knowing and intelligent waiver of UM/UIM coverage, an insurer must explain that, in the event of a covered loss, the insured's policy may entitle them to stack coverages on multiple vehicles. Ullman v. Safeway Ins. Co ., 2023-NMSC-030, rev'g 2017-NMCA-071, 404 P.3d 434 and rev'g in part 2018-NMCA-051, 424 P.3d 665.
Adding an additional vehicle to an existing insurance policy does not create a new contract. — Where plaintiffs argued that their insurance company did not secure an effective rejection of UM/UIM coverage from them because the insurer failed to obtain a new rejection of coverage after plaintiffs added a vehicle to their existing policy, the district court did not err in granting the insurance company's motion for summary judgment on this issue, because the addition of a new vehicle to an existing policy does not trigger the creation of a new contract requiring the insurer to provide the insured with the premium charges corresponding to each available option for UM/UIM coverage, but instead only requires the insurance company to comply with the requirements of NMSA 1978, § 66-5-301(C). Ullman v. Safeway Ins. Co ., 2023-NMSC-030, rev'g 2017-NMCA-071, 404 P.3d 434 and rev'g in part 2018-NMCA-051, 424 P.3d 665.
Purchase of UM/UIM coverage in an amount less than the liability coverage in an automobile policy is a partial rejection of UM/UIM coverage. — When an insured purchased UM/UIM coverage in an amount less than the liability coverage in the automobile insurance policy, the insured has rejected some of the available UM/UIM coverage and if the insured does not execute a valid rejection of UM/UIM coverage, UM/UIM coverage at the liability limits of the insured's policy will be read into the policy. Romero v. Progressive Nw. Ins. Co. , 2010-NMCA-024, 148 N.M. 97, 230 P.3d 844, cert. granted, 2010-NMCERT-003, aff'd , Jordan v. Allstate Ins. Co., 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214.
Insurer must allow insured to make a knowing and intelligent decision to receive or reject the full amount of UM/UIM coverage to which the insured is statutorily entitled. — In a class-action lawsuit where plaintiff insured claimed that defendant insurance agency's (agency) uniform documentation failed to comply with New Mexico law in obtaining waivers of uninsured/underinsured motorist (UM/UIM) coverage, including stacked coverage, and where the documentation in the record indicated that the agency informed plaintiff that she was entitled to purchase UM/UIM coverage in an amount equal to the policy's liability limits, provided the corresponding premium charge for that maximum amount of UM/UIM coverage, provided the premium cost for the minimum amount of UM/UIM coverage, provided the relative costs for any other levels of UM/UIM coverage offered, and informed plaintiff that she had the right to reject UM/UIM coverage, and where the completed documents show that plaintiff rejected, in writing, the UM/UIM coverage and that this rejection was made part of the insurance policy, the district court erred in denying the agency's motion for summary judgment, because the uniform documents provided by the agency were legal and valid as a matter of law and in compliance with New Mexico law, and there was clear evidence in the record that plaintiff made an informed decision to reject UM/UIM coverage. Ullman v. Safeway Ins. Co. , 2017-NMCA-071, cert. granted.
Insurer is required to meaningfully offer UM/UIM coverage. — In consolidated cases, where plaintiffs, whose primary language was Spanish, purchased automobile insurance policies from their respective insurance companies, were provided and signed English-language forms for the rejection of uninsured/underinsured (UM/UIM) coverage, were involved in separate car accidents with underinsured drivers and filed claims of UM/UIM benefits, which were denied by their respective insurance companies, and where each plaintiff sought a declaratory judgment that their policies be reformed to include UM/UIM coverage, asserting several claims, including breach of contract, insurance bad faith and unfair and unconscionable trade practices under the Unfair Practices Act, 57-12-1 to 57-12-26 NMSA 1978, the district court, in the first case, erred by concluding that there was a valid rejection of UM/UIM coverage, because the insurance company provided the plaintiff with information it knew she could not understand and the plaintiff signed the form where the representative told her to do so; the insurer is required to meaningfully offer UM/UIM coverage and the insured must knowingly and intelligently act to reject it before it can be excluded from a policy. The district court did not err in concluding that there was a valid rejection of UM/UIM coverage in the second case, because the insurance company explained the coverages in Spanish and the plaintiff's argument was that the failure to provide the UM/UIM waiver form in Spanish violates New Mexico's requirements for obtaining a valid waiver of UM/UIM; nothing in 66-5-30 NMSA 1978, requires an insurer to provide UM/UIM selection/rejection forms in an insured's primary or preferred language. Contreras v. Fred Loya Ins. Co. , 2023-NMCA-019, cert. denied.
Insurer may not provide misleading and inconsistent information in a renewal policy and escape liability. — Where the estate of a motorcyclist, who died in an automobile accident and who was a beneficiary of his grandfather's five automobile insurance policies, brought an action against an insurance company, alleging that the insurance company failed to obtain a proper rejection of uninsured and underinsured motorist coverage, the court held that the insurer's use of menus of available premium rates that did not match the attached renewal policies placed the burden on the insured to make sense of the numbers. This practice deprived the insureds of the ability to meaningfully reconsider their coverage options because in attempting to do so, they would have been unable to decipher how the menu matched their invoice. An insurance company cannot confuse an insured with inconsistent renewal policies and then escape liability. Hart v. State Farm Mut. Auto. Ins. Co. , 546 F. Supp.3d 1023 (D. N.M. 2021).
Valid rejection of UM/UIM coverage. — Where plaintiffs filed two separate lawsuits against insurance company in response to insurance company's refusal to pay uninsured/underinsured (UM/UIM) benefits to them because plaintiffs had rejected UM/UIM coverage, the district court did not err in granting summary judgment to insurance company in both cases where the evidence established that the insurance company offered the insureds UM/UIM coverage equal to their liability limits, informed the insureds about the premium costs corresponding to the available levels of coverage, obtained written rejections of UM/UIM coverage equal to the liability limits, and incorporated the rejections into the policy in a way that afforded the insureds a fair opportunity to reconsider the decision to reject. The insurance company, therefore, obtained valid rejections of UM/UIM coverage in both cases. Lueras v. GEICO Gen. Ins. Co. , 2018-NMCA-051, cert. granted.
Retroactive application of Jordan v. Allstate Ins. Co. — The retroactive reformation of UM/UIM rejections pursuant to Jordan v. Allstate Ins. Co. , 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214 does not apply to liability insurance policies issued before May 20, 2004 when the opinion in Montano v. Allstate Indemnity Co. , 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255 was issued. Whelan v. State Farm Mut. Auto. Ins. Co. , 2014-NMSC-021.
Where, in 2002, the decedent was in a parked truck when it was hit by a moving vehicle; the collision resulted in severe injuries and ultimately in the decedent's death; at the time of the accident, the decedent was insured under the terms of a $50,000 liability policy issued by defendant that facially provided no UM/UIM coverage; the decedent received $25,000 from the at-fault driver's insurance carrier; and plaintiff filed suit for reformation of the decedent's liability policy to provide UM/UIM coverage equal to the liability limits of $50,000 pursuant to Jordan v. Allstate Ins. Co. , 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214, the decedent's liability insurance policy was not subject to retroactive reformation of its facial lack of UM/UIM coverage because judicial reformation under Jordan does not extend to insurance contracts formed before May 20, 2004, when the opinion in Montano v. Allstate Indemnity Co. , 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255 was issued. Whelan v. State Farm Mut. Auto. Ins. Co. , 2014-NMSC-021.
Coverage options and premiums. — A valid waiver or rejection of UM/UIM coverage does not require that the insured be provided a written list of coverage options and corresponding premium charges on the written rejection form that is delivered with the insurance policy to the insured. Curry v. Great Nw. Ins. Co. , 2014-NMCA-031, cert. denied, 2014-NMCERT-003.
Where plaintiffs' vehicle were covered by a standard insurance policy; plaintiffs were involved in a motor vehicle accident and filed an uninsured motorist claim with defendant; defendant refused to pay the claim based on a written rejection of UM/UIM coverage that plaintiffs signed when they purchased their policy; and plaintiffs claimed that because the UM/UIM coverage rejection form relied on by defendant did not contain a list of premium charges corresponding to the available UM/UIM coverage option, the UM/UIM coverage rejection form was invalid, the rejection form was valid because, although insurers must provide UM/UIM coverage and premium information in a way that allows the insured to make an informed decision about the coverage purchased or rejected in a knowing and intelligent manner, New Mexico law does not require an insurer to provide available UM/UIM coverage options and corresponding premium information on the written rejection form delivered with the insurance policy to the insured. Curry v. Great Nw. Ins. Co. , 2014-NMCA-031, cert. denied, 2014-NMCERT-003.
UM/UIM coverage is illusory at minimally insured levels. — The underinsured motorist (UIM) coverage on a policy that provides minimum uninsured/underinsured motorist (UM/UIM) limits of $25,000 per person/$50,000 per accident is misleading for an insured who sustains more than $25,000 in damages caused by a minimally insured tortfeasor, because a consequence of the offset rule is that if injured persons purchased only the statutory minimum policy, the person's policy will not cover losses for damages in excess of $25,000. New Mexico law, however, allows an insurer to sell minimum limits UM/UIM coverage to a policyholder and only provide coverage for uninsured motorist coverage, and insurers may charge a premium for such coverage as long as they make a proper disclosure to the policyholder. Crutcher v. Liberty Mut. Ins. Co. , 2022-NMSC-001.
Rejection of coverage. — The affirmative selection of a level of UM/UIM coverage in an amount less than full liability coverage does not constitute a "rejection" of coverage such that an insurer must obtain a written waiver of coverage and include it in the policy. Progressive Nw. Ins. Co. v. Weed Warrior Servs. , 588 F.Supp.2d 1281 (D.N.M. 2008)
Contractual exclusions that conflict with mandatory requirements are void. — Where the underinsured motorist's policy provided that the amount of underinsured motorist coverage the insurer would pay would be reduced by the amount of any other bodily injury coverage available to any party held liable for the accident and the tortfeasor's liability coverage was $25,000, the provision was void to the extent it limited the insured's recovery of underinsured motorist benefits to an amount less than the insured's underinsured motorist coverage of $30,000, minus an offset in the amount of liability proceeds actually received by the insured from the tortfeasor. Farmers Ins. Co. of Ariz. v. Sandoval , 2011-NMCA-051, 149 N.M. 656, 253 P.3d 944.
Minimum requirements for rejection of coverage. — At a minimum, for a rejection of UM/UIM coverage to be valid, insureds must be clearly informed as to the amount of coverage they are entitled to purchase, the amount of coverage they have in fact purchased, and the fact that they have rejected some amount of coverage. Farmers Ins. Co. of Ariz. v. Chen , 2010-NMCA-031, 148 N.M. 151, 231 P.3d 607, cert. quashed, 2010-NMCERT-011, 150 N.M. 490, 262 P.3d 1143.
Rejection of uninsured/underinsured coverage must be in writing. — An insurer must obtain a written rejection of uninsured/underinsured motorist coverage from the insured in order to exclude the coverage from an automobile liability insurance policy. The written rejection of coverage need not be signed by the insured or attached to the insurance policy to be effective. However, some evidence of the insured's rejection of uninsured/underinsured motorist coverage must be made part of the policy by endorsement, attachment, or some other means that calls attention to the fact that the coverage has been rejected. Marckstadt v. Lockheed Martin Corp. , 2010-NMSC-001, 147 N.M. 678, 228 P.3d 462.
Intent is irrelevant. — The question of whether uninsured/underinsured motorist coverage is included in an automobile liability insurance policy is not a question of the parties' intent, but of whether the rejection of coverage conformed to the requirements of Section 66-5-301 NMSA 1978 and 13.12.3.9 NMAC. Marckstadt v. Lockheed Martin Corp. , 2010-NMSC-001, 147 N.M. 678, 228 P.3d 462.
Insufficient evidence of written rejection of coverage. — Where the employer obtained an automobile liability insurance policy that provided coverage for the employer's employees; the employer intended to reject uninsured/underinsured coverage; the policy included an endorsement entitled "Limits of Liability Uninsured Motorists" that contained a list of states and next to New Mexico an "X" indicating rejection of uninsured/underinsured coverage; the endorsement was not signed by the employer; and there was no evidence of any discussions or correspondence in which the insured directed the insurer to exclude uninsured/underinsured coverage or to indicate who drafted or filled in the endorsement, the evidence was insufficient to show that the insured had rejected uninsured/underinsured motorist coverage in writing. Marckstadt v. Lockheed Martin Corp. , 2010-NMSC-001, 147 N.M. 678, 228 P.3d 462.
Purchase of uninsured motorist coverage in amounts less than policy liability limits. — Where plaintiff issued an automobile liability insurance policy to defendant and defendant's spouse with liability limits of $100,000 and UM/UIM limits of $30,000; during the application process, defendant's spouse signed UM/UIM election agreements which defined UM/UIM coverage and stated that the opportunity to purchase UM/UIM coverage in an amount up to the automobile limits had been previously provided; the agreements allowed the insured to reject UM/UIM entirely or select an amount of coverage less than the liability limits of the policy; the agreements signed by defendant's spouse indicated a selection of UM/UIM limits of $30,000; the agreements were not attached to the policies that plaintiff issued to defendant; the declaration pages of policies referred to an endorsement which was attached to the policies which stated that the insured had selected UM/UIM coverage that was lower than the bodily injury limits of liability of the policy; and the agreements, declaration pages and endorsements did not list the amount of UM/UIM coverage the insureds were permitted to purchase or the amount they had rejected by choosing to purchase lesser coverage, the documents did not meet the written rejection requirement or the attached notification requirement for a valid rejection of UM/UIM coverage at the liability limits of defendant's policies. Farmers Ins. Co. of Ariz. v. Chen , 2010-NMCA-031, 148 N.M. 151, 231 P.3d 607, cert. quashed, 2010-NMCERT-011, 150 N.M. 490, 262 P.3d 1143.
Failure to attach rejection of coverage to the policy. — Where the insured signed a rejection of uninsured/underinsured motorist coverage as part of the insured's initial application for insurance; a copy of the application was given to the insured at the time of application; and the application and the rejection were not physically attached to the insurance policy that the insured received from the insurer, the rejection was ineffective under administrative regulation 13.12.3.9 NMAC which requires the rejection of coverage to be made a part of the policy delivered to the insured. Arias v. Phoenix Indemnity Ins. Co. , 2009-NMCA-100, 147 N.M. 14, 216 P.3d 264, cert. denied, 2009-NMCERT-008, 147 N.M. 395, 223 P.3d 940.
Delay in providing policy incorporating rejection of uninsured/underinsured motorist coverage invalidated rejection of coverage. — Where personal representatives of the estate of decedent sued defendant insurance company for denying uninsured and underinsured motorist (UM/UIM) coverage for the accidental death of decedent, and where the district court granted defendant's motion for summary judgment, concluding that decedent's father, the insurance holder, had validly rejected UM/UIM coverage, the district court erred in granting summary judgment because decedent's father's rejection of UM/UIM coverage was invalid because defendant deprived him of a fair opportunity to reconsider his decision to reject coverage by failing to provide him with a policy incorporating the rejection until over seven months after he had signed the rejection form. An unreasonable delay between rejection and incorporation deprives the insured of the opportunity to reconsider any rejection of UM/UIM coverage. Sanchez v. Essentia Ins. Co ., 2020-NMCA-009, cert. denied.
Stacking of coverage. — Absent the execution of a sufficient rejection of each and every possible combination of stacking, stacking is a default entitlement with regard to all individual vehicles covered under a policy. Arias v. Phoenix Indem. Ins. Co. , 2014-NMCA-027, cert. denied, 2014-NMCERT-001.
When courts confer uninsured/underinsured motorist coverage where a policy is silent on the matter, each vehicle covered also requires coverage, and those coverages are stackable. Arias v. Phoenix Indem. Ins. Co. , 2014-NMCA-027, cert. denied, 2014-NMCERT-001.
Where plaintiff's rejection of uninsured/underinsured motorist coverage was legally deficient and the court reformed plaintiff's insurance policy to include uninsured/underinsured motorist coverage to the maximum limit of liability; and the policy covered two vehicles, plaintiff was entitled to have the coverage stacked as to each vehicle. Arias v. Phoenix Indem. Ins. Co. , 2014-NMCA-027, cert. denied, 2014-NMCERT-001.
Plaintiff entitled to stack coverages where policy was ambiguous as to whether multiple premiums were paid. — Where plaintiff originally insured a single vehicle with Allstate in March 2016 and added a second vehicle to her policy later that year, and where plaintiff's agent had plaintiff execute a UM/UIM selection/rejection form where plaintiff selected "non-stacked" UM/UIM coverage, and then, in December 2016, plaintiff was hit by a car while walking on a crosswalk, for which plaintiff submitted a claim for UM/UIM benefits to Allstate and sought stacked coverage, and where Allstate declined plaintiff's request to stack, and where the district court granted Allstate's motion for summary judgment, concluding that Allstate complied with all requirements for a valid rejection of uninsured motorist coverage, the district court erred in granting Allstate's motion for summary judgment, because New Mexico courts have consistently held that where an insurance company charges a separate UM/UIM premium for each vehicle under a multi-vehicle policy, it is only fair that the insured be permitted to stack the coverages for which they have paid, and in this case, the policy was ambiguous as to whether multiple premiums were paid because the UM/UIM coverages were listed on the declarations page on a vehicle-by-vehicle basis, indicating there was coverage attached to each vehicle, and, more importantly, the declarations page listed a premium coverage for the UM/UIM coverage on each vehicle, which could lead a reasonable insured to think they are paying multiple premiums. Garcia v. Allstate , 2024-NMCA-010, cert. granted.
Applicability of the Mandatory Financial Responsibility Act. — The definition in Section 66-5-205.3 NMSA 1978 of the Mandatory Financial Responsibility Act of the insurance contract between the insured and the insurer to include the insured's application for insurance has no bearing on whether there has been a valid rejection of uninsured/underinsured motorist coverage under the Uninsured Motorist Act. Arias v. Phoenix Indemnity Ins. Co. , 2009-NMCA-100, 147 N.M. 14, 216 P.3d 264, cert. denied, 2009-NMCERT-008, 147 N.M. 395, 223 P.3d 940.
Option to reject coverage. — A motorist has the option of rejecting uninsured motorist coverage, or protecting his estate against a financially irresponsible motorist, and the coverage conditions of another driver's policy cannot be overlooked so as to provide protection that the motorist himself could have obtained on the ground that it is public policy to afford protection to the innocent public. Lee v. General Accident Ins. Co. , 1987-NMSC-047, 106 N.M. 22, 738 P.2d 516.
Formality of rejection. — An insured may reject uninsured motorist coverage, but the rejection must satisfy the regulations promulgated by the superintendent of insurance. The rejection must be made a part of the policy by endorsement on the declarations sheet, by attachment of the written rejection to the policy, or by some other means that makes the rejection a part of the policy so as to clearly and unambiguously call to the attention of the insured the fact that such coverage has been waived. Romero v. Dairyland Ins. Co. , 1990-NMSC-111, 111 N.M. 154, 803 P.2d 243; Kaiser v. DeCarrera , 1996-NMSC-050, 122 N.M. 221, 923 P.2d 588.
Invalid rejection. — Insured's rejection of uninsured motorist coverage was invalid and ineffective as a matter of law, where she was never given a copy of the application containing the rejection, and the declarations sheet that she later received made no mention of the rejection of uninsured motorist coverage. Romero v. Dairyland Ins. Co. , 1990-NMSC-111, 111 N.M. 154, 803 P.2d 243; Kaiser v. DeCarrera , 1996-NMSC-050, 122 N.M. 221, 923 P.2d 588.
Rejection to be part of policy. — Even though the insurer mailed a revised declarations page which indicated that the insured had rejected uninsured and underinsured motorist coverage, and the envelope was returned as undeliverable, the insured's coverage was not affected since the rejection was not made a part of the policy. Kaiser v. DeCarrera , 1996-NMSC-050, 122 N.M. 221, 923 P.2d 588.
Duty of insurance agent. — A purchaser of insurance must only be fully informed of the fact of rejection, rather than the significance of the rejection; an insurance agent has no duty to inform prospective purchasers of the ramifications of their decision. Vigil v. Rio Grande Ins. of Santa Fe , 1997-NMCA-124, 124 N.M. 324, 950 P.2d 297.
Rejection by insured's agent. — The named insured was bound by his wife's rejection of uninsured motorist coverage at the time she purchased the insurance policy as his agent. Vigil v. Rio Grande Ins. of Santa Fe , 1997-NMCA-124, 124 N.M. 324, 950 P.2d 297.
Effect of insurer's failure to file policy with superintendent of insurance. — An insured's rejection of uninsured motorist coverage was not a nullity because the application form with its rejection language and the declarations page were never submitted for approval under Section 59A-18-12 NMSA 1978. Vigil v. Rio Grande Ins. of Santa Fe , 1997-NMCA-124, 124 N.M. 324, 950 P.2d 297.
Addition of vehicles to policy. — The addition of vehicles to a policy or changes affecting the payment of premiums did not create a new policy requiring a new rejection of uninsured motorist coverage. Vigil v. Rio Grande Ins. of Santa Fe , 1997-NMCA-124, 124 N.M. 324, 950 P.2d 297.
The uninsured motorist statutes and regulations promulgated under the statutes do not expressly require an insurer to obtain a specific written rejection that acknowledges a limitation on stacking. Montano v. Allstate Indem. Co. , 2003-NMCA-066, 133 N.M. 696, 68 P.3d 936, rev'd , 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255.
Invalid rejection of UM/UIM coverage. — Where the declaration page of an automobile insurance policy suggested that the insured did not have UM/UIM coverage; one endorsement to the policy said that UM/UIM coverage was deleted; and another endorsement indicated that UM/UIM coverage was sometimes available, the endorsement which deleted UM/UIM coverage was not a valid rejection of UM/UIM coverage because the policy did not unambiguously convey to the insured the extent of the UM/UIM coverage. Williams v. Farmers Ins. Co. , 2009-NMCA-069, 146 N.M. 515, 212 P.3d 403, cert. denied, 2009-NMCERT-006, 146 N.M. 733, 215 P.3d 42.
Class II insureds covered where there was an invalid rejection of UM/UIM coverage. — Where the plaintiffs, who were the driver and a passenger of a vehicle owned by the daughter of the insured, were injured in an automobile accident with a vehicle driven by an underinsured driver; the named insured of the vehicle that was driven by the plaintiffs signed a waiver of UM/UIM coverage; the waiver was not attached to the policy; and an endorsement to the policy which deleted UM/UIM coverage from a policy was not a valid rejection of UM/UIM coverage, the plaintiffs were covered, as class II insureds, by the UM/UIM coverage provided by the policy. Williams v. Farmers Ins. Co. , 2009-NMCA-069, 146 N.M. 515, 212 P.3d 403, cert. denied, 2009-NMCERT-006, 146 N.M. 733, 215 P.3d 42.
Rejection of coverage. — Where the insured believed that it had rejected uninsured/underinsured motorist coverage, the requirements for rejection of uninsured motorist and underinsured motorist coverage are met when a business automobile insurance policy contains a written, but unsigned, endorsement indicating such rejection. Marckstadt v. Lockheed Martin Corporation , 2008-NMCA-138, 145 N.M. 90, 194 P.3d 121, rev'd , 2010-NMSC-001, 147 N.M. 678, 228 P.3d 462.
Purchase of uninsured motorist coverage in amounts less than policy liability limits. — Where the insured's automobile liability policy contained liability limits of $100,000 and UM/UIM limits of $50,000; the insured received a copy of the policy which contained a standard declarations page listing the amount of liability and UM/UIM coverage; the policy did not contain a notification that UM/UIM coverage could be increased to an amount equal to the liability limits of the policy and it did not contain any indication that the insured had rejected any amount of UM/UIM coverage that the insured had a statutory right to purchase, the insured's selection of an amount of UM/UIM coverage that was less than the liability limits of the insured's automobile policy constituted a rejection of UM/UIM coverage in an amount equal to the difference between the UM/UIM coverage and the liability coverage of the policy, the insured did not validly reject the UM/UIM coverage, and the district court properly read into the policy UM/UIM coverage in an amount equal to the liability limits of the policy. Romero v. Progressive Nw. Ins. Co. , 2010-NMCA-024, 148 N.M. 97, 230 P.3d 844, cert. granted, 2010-NMCERT-003, 148 N.M. 560, 240 P.3d 15, aff'd , Jordan v. Allstate Ins. Co. , 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214.
III. COVERAGE.
A. GENERALLY.
Scope of uninsured motorist coverage. — New Mexico public policy generally requires that uninsured motorist coverage be territorially coextensive with liability coverage. State Farm Mut. Auto. Ins. Co. v. Marquez , 2001-NMCA-053, 130 N.M. 591, 28 P.3d 1132, cert. denied, 130 N.M. 558, 28 P.3d 1099.
Scope of coverage. — When someone purchases general uninsured motorist coverage, he is insured against bodily injury in at least five situations: (1) as a pedestrian; (2) as a passenger in someone else's insured car; (3) as a passenger in an uninsured car; (4) while in his own insured car; and (5) for injuries suffered by passengers riding in his own insured car. Lopez v. Foundation Reserve Ins. Co. , 1982-NMSC-034, 98 N.M. 166, 646 P.2d 1230.
Coverage of an insured family member. — An insured family member is entitled to recover for an accident involving the insured vehicle, as opposed to a vehicle owned by a third party, even though the insurance policy attempts to exclude coverage for any vehicle owned by the named insured; and the insured, injured family member is entitled to recover even though the negligent driver was also an insured family member. Moreover, the named insured may stack benefits available to him/her under the uninsured/underinsured motorist coverage for other vehicles covered by the same policy. Padilla v. Dairyland Ins. Co. , 1990-NMSC-025, 109 N.M. 555, 787 P.2d 835.
Written disclosure of coverage required. — A named-driver exclusion was not a basis to reject uninsured motorist coverage for a class-one uninsured motorist coverage for class-one insureds was not expressly excluded. Phoenix Indem. Ins. Co. v. Pulis , 2000-NMSC-023, 129 N.M. 395, 9 P.3d 639.
Employee of school bus company. — A school bus driver was not an "insured" under the liability policy of her employer school bus company and was not covered under the uninsured motorist or underinsured motorist coverage of the policy. Archunde v. International Surplus Lines Ins. Co. , 1995-NMCA-110, 120 N.M. 724, 905 P.2d 1128, cert. denied, 120 N.M. 533, 903 P.2d 844.
Coverage of employees. — A self-insured school district was not required to provide uninsured motorist or underinsured motorist coverage for employees of a school bus company under its contract with the company or the provisions of this section. Archunde v. International Surplus Lines Ins. Co. , 1995-NMCA-110, 120 N.M. 724, 905 P.2d 1128, cert. denied, 120 N.M. 533, 903 P.2d 844.
Passenger, riding in noncovered vehicle not operated by named insured, not "insured". — Where the passenger was neither the named insured nor a relative thereof, and passenger's injuries were not incurred in a vehicle directly covered by the policy (or covered as a substitute vehicle under the policy), and the named insured (or a relative thereof) was not operating the vehicle, the passenger was not an "insured" under the policy. Gamboa ex rel. Gamboa v. Allstate Ins. Co. , 1986-NMSC-078, 104 N.M. 756, 726 P.2d 1386.
Coverage not limited to actual contact with uninsured motorist. — Insurance company could not contractually restrict its uninsured or unknown motorist coverage to situations in which there is physical contact between the insured and a "hit-and-run" vehicle without violating the remedial legislative policy of Section 64-5-105, 1953 Comp. (similar to this section). Therefore, plaintiff who, in order to avoid an imminent head-on collision, swerved her vehicle to the right and collided with a stone wall off the right shoulder of the road, was not precluded from recovery by such provisio

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