New Mexico Property & Casualty Insurance License Exam — All Questions

What is the best practice for a New Mexico producer quoting the state's minimum auto liability limits to a client?

• a.Quote another state's minimums, since limits are the same nationwide
• b.Tell the client no minimum exists in New Mexico
• c.Assume the minimum never changes
• d.Confirm the current statutory split limits with the New Mexico OSI / Motor Vehicle Division, because legislatures periodically raise minimums✓

New Mexico requires drivers to carry liability insurance, but the specific per-person, per-accident, and property-damage minimums are set by statute and can be raised. A producer should verify the current figures against official New Mexico sources rather than quoting a remembered number that may be outdated.

Uninsured/underinsured motorist (UM/UIM) coverage on an auto policy is designed to:

• a.Pay the other driver's damages when your client is at fault
• b.Pay your client's own bodily-injury damages when an at-fault driver has no insurance or not enough✓
• c.Replace collision coverage on the client's own vehicle
• d.Cover only damage to commercial buildings

UM/UIM protects the policyholder and covered occupants, paying their injury damages when the at-fault driver is uninsured or underinsured. Whether New Mexico requires UM/UIM to be carried or offered, and at what limits, is set by statute — confirm the current rule with the New Mexico OSI.

How does New Mexico generally handle auto injury claims?

• a.As a pure no-fault state where each driver's insurer pays regardless of fault
• b.As a traditional at-fault (liability) state, where claims are pursued against the responsible driver✓
• c.By barring all lawsuits arising from auto accidents
• d.Through a state-run fund that pays all claims

New Mexico follows the traditional at-fault (liability) approach rather than a no-fault system: injury and damage claims are generally pursued against the driver responsible for the accident, with UM/UIM filling the gap when that driver is uninsured or underinsured. Confirm the current framework and any changes with the New Mexico OSI when advising clients.