Understanding the New Mexico Home Insurance Landscape

Archyde News: welcome, Amelia.Thanks for joining us today. The situation with home insurance in New Mexico seems increasingly critical. Can you provide some insight into the factors driving this crisis?

Amelia Stone: Thank you for having me. The situation is indeed concerning. Several factors are at play. We’re seeing a convergence of rising risk due to climate change, leading to more frequent and severe natural disasters, and an increase in the costs of rebuilding due to inflation and supply chain issues. all these factors are putting a strain on the insurance industry.

The Impact of Natural Disasters on Home Insurance Costs

Archyde News: New Mexico has a high risk of natural disasters, from wildfires to severe thunderstorms. How do these events specifically affect home insurance rates and availability as we have recently witnessed with the fire expanding 238 acres in the Cloudcroft area?

Amelia Stone: Natural disasters are a key driver. Insurers base their premiums on the risk they’re taking. The more frequent and intense the events, the higher the premiums. If the risk becomes too high, insurers may choose to limit their exposure by raising rates dramatically or even withdrawing coverage from certain areas – which regrettably, we are beginning to see.

Addressing the Home Insurance Affordability Gap in New Mexico

Archyde News: A notable percentage of New Mexicans are uninsured. What are some of the key reasons for this?

Amelia Stone: Affordability is a major hurdle. Insurance rates can be quite high, and if you’re on a fixed income or face other financial challenges; it becomes an easy service to cut. Beyond that, a lack of awareness about the risks and the importance of insurance coverage, or difficulty navigating the insurance system, also play a role, as does a lack of competitive options in certain areas.

The Future of Home Insurance in New Mexico

Archyde News: What solutions do you see as viable to address the challenges facing the New Mexico home insurance market and promote insurance coverage?

amelia Stone: Several strategies are needed. Increased investment in wildfire mitigation efforts, such as defensible space initiatives. There needs to be governmental and industry support for helping people understand their risks better and access different insurance options. We need to also think about creating incentives to encourage homeowners to take steps to reduce their risk and to make homes more resilient to natural disasters. We need to see state and federal disaster relief being enacted to help homeowners rebuild and recover from these disasters.

Archyde News: thank you, Amelia. It’s a complex issue that requires a multi-faceted approach. Considering this data what solutions would you like to see implemented to help protect New Mexico homeowners.