Why It’s Getting Harder to Secure Property Insurance in Northern New Mexico
Securing property insurance in northern New Mexico has become increasingly difficult due to escalating wildfire risks and a tightening insurance market. This trend is impacting homeowners, prospective buyers, and real estate professionals across the region.
Wildfire Risks and Insurance Challenges
The surge in wildfire incidents, including the Hermits Peak-Calf Canyon Fire, has led insurers to reassess their exposure in high-risk areas. As a result, many providers are either raising premiums significantly or choosing not to renew policies in certain regions. Homeowners are left with fewer options and higher costs.
According to data from 2023, New Mexico ranks 11th in the nation for non-renewals of homeowner insurance policies due to wildfire risk. More than half of residents saw a premium increase last year.
Impact on Homeowners and Buyers
The difficulty in obtaining affordable property insurance is having wide-reaching effects:
Homeownership Costs: Rising insurance premiums add to the total cost of owning a home, making it harder for many to afford to stay.
Real Estate Transactions: Buyers may struggle to obtain insurance, which is often required for mortgage approval. This can delay or derail property sales.
Community Stability: Some residents, unable to secure or afford coverage, may go without insurance, increasing financial risk if disaster strikes.
State Initiatives and Resources
In response, New Mexico is working on several strategies:
FAIR Plan: The New Mexico FAIR Plan provides basic property insurance for residents who cannot get coverage through standard insurers. Limits range from $225,000 to $350,000 for residential properties and up to $1,000,000 for commercial ones.
Legislative Action: Lawmakers are considering expanding state-run property insurance programs to create broader options for those in wildfire-prone areas.
Navigating the Insurance Market
For those trying to obtain insurance in this environment:
Get Multiple Quotes: Compare policies and premiums from several providers.
Talk to Local Agents: They may know which companies are still writing policies in your area.
Look Into State Programs: The FAIR Plan or other options might help.
Take Mitigation Steps: Clearing defensible space, upgrading roofing materials, and other fire risk reduction strategies can sometimes improve eligibility.
The challenges in northern New Mexico’s insurance market are real, but not insurmountable. For property owners and buyers alike, understanding the current landscape and working with informed professionals is key to navigating this uncertain terrain.
