2018 New Mexico Statutes
Chapter 66 - Motor Vehicles
Article 5 - Licensing of Operators and Chauffeurs; Financial Responsibility; Uninsured Motorists' Insurance; Identification Cards
Section 66-5-301 - Insurance against uninsured and unknown motorists; rejection of coverage by the insured.

Universal Citation: NM Stat § 66-5-301 (2018)
66-5-301. Insurance against uninsured and unknown motorists; rejection of coverage by the insured.

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.

ANNOTATIONS

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.

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.

II. REJECTION OF COVERAGE.

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.

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.

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.

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.

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 provision in her policy. Montoya v. Dairyland Ins. Co., 394 F. Supp. 1337 (D.N.M. 1975).

Coverage of several vehicles insured under single policy. — This section requires only that each of several vehicles insured under a single policy be covered by one minimum coverage with no need for separate full coverage for each. Lopez v. Foundation Reserve Ins. Co., 1982-NMSC-034, 98 N.M. 166, 646 P.2d 1230.

Coverage of additional vehicles. — New Mexico requires minimum property damage coverage under its financial responsibility law. This requirement may justify some additional premium charge for each additional vehicle, depending on the added risk incurred. Lopez v. Foundation Reserve Ins. Co., 1982-NMSC-034, 98 N.M. 166, 646 P.2d 1230.

The additional risk accruing by covering passengers in additional insured vehicles may justify another premium for each additional vehicle. Lopez v. Foundation Reserve Ins. Co., 1982-NMSC-034, 98 N.M. 166, 646 P.2d 1230.

"Property". — The word "property," as that term is used in this section and in Section 66-5-215 NMSA 1978, included coverage of a house damaged when an uninsured motorist negligently drove his vehicle so as to cause damage to the house. Richards v. Mountain States Mut. Cas. Co., 1986-NMSC-021, 104 N.M. 47, 716 P.2d 238.

"Occupant". — Plaintiff was "occupying" the insured car at the time of the accident for purposes of uninsured motorist coverage where he was driving the car when it had a flat tire, parked the car on the side of the highway, went with a passerby in a truck to get a spare, returned to the scene in the truck which parked within a close proximity of the car, and was struck by an uninsured motorist while reaching into the back of the truck to get the spare. Cuevas v. State Farm Mut. Auto. Ins. Co., 2001-NMCA-038, 130 N.M. 539, 28 P.3d 527.

Driver, who was injured while assisting a friend in replacing a tire on the friend's automobile, was not an "occupant" of the driver's automobile within the meaning of the driver's policy at the time of the accident and, therefore, was not covered under the uninsured motorist provision of the policy. Allstate Ins. Co. v. Graham, 1988-NMSC-018, 106 N.M. 779, 750 P.2d 1105.

Recovery by guest under both liability and underinsured provisions denied. — A guest passenger was not allowed to recover for public policy reasons under both the liability and underinsured motorist provisions of a negligent host driver's insurance policy, even though an offset provision in the policy would prevent a double recovery. Mountain States Mut. Cas. Co. v. Martinez, 1993-NMSC-003, 115 N.M. 141, 848 P.2d 527.

Being stabbed by passenger deemed "accident". — Injuries to an insured caused when he was stabbed by a passenger in an uninsured vehicle after a collision arose out of an "accident," as that term is used in uninsured motorist endorsements. Britt v. Phoenix Indem. Ins. Co., 1995-NMSC-075, 120 N.M. 813, 907 P.2d 994.

Drivers of uninsured vehicles are not vicariously liable for intentional torts of passengers and a passenger's mere presence in the vehicle is, without more, an insufficient basis from which to conclude that the victim (the driver of the insured vehicle) is legally entitled to recover from the driver of the uninsured vehicle. Britt v. Phoenix Indem. Ins. Co., 1995-NMSC-075, 120 N.M. 813, 907 P.2d 994.

Plaintiff failed to show a sufficient causal nexus between the use of the uninsured vehicle and the resulting harm. — Where plaintiff was transported in an uninsured vehicle to a place where she was sexually assaulted, and where plaintiff subsequently filed a claim for uninsured motorist coverage for the incident under a policy that defendant insurance company had issued to plaintiff's mother and under which plaintiff was an insured, the trial court did not err in ruling that there was not a sufficient causal nexus between the use of the uninsured vehicle and the sexual assault of plaintiff, because the uninsured vehicle was not an integral element of the sexual assault; an uninsured vehicle does not constitute an active accessory to the commission of an intentional tort solely because use of the vehicle was necessary to transport the assailant and/or the victim to or from the scene of the intentional tort. Crespin v. Safeco Ins. Co. of Am., 2018-NMCA-068.

Injuries which resulted from a drive-by shooting resulted from an "accident" and were covered by either uninsured motorists or medical payments provisions of the insurance policies. State Farm Mut. Auto. Ins. Co. v. Blystra, 86 F.3d 1007 (10th Cir. 1996).

Loss of consortium. — A wife's claim for loss of consortium, under this particular policy, was subsumed by the compensation paid for her husband's injury; it is not considered a separate additional sum. Gonzales v. Allstate Ins. Co., 1996-NMSC-041, 122 N.M. 137, 921 P.2d 944.

Loss of consortium is an emotional injury, not a "bodily injury" as referenced in Subsection B; emotional injuries are not covered by an insurance contract without specific policy language to the contrary. Wiard v. State Farm Mut. Auto. Ins. Co., 2002-NMCA-073, 132 N.M. 470, 50 P.3d 565, cert. denied, 132 N.M. 288, 47 P.3d 447.

Offset of awards. — Grant of summary judgment in favor of the insurer permitting offset from the insureds' uninsured/underinsured (UM/UIM) motorist coverage arbitration awards the amount it paid to the insureds under the medical payments portion of their policies was proper where the insureds were fully compensated for their damages, and there was no danger that enforcing the offset would reduce UM/UIM coverage below the statutory minimum or result in less than full compensation consonant with policy limits. Fickbohm v. St. Paul Ins. Co., 2003-NMCA-040, 133 N.M. 414, 63 P.3d 517.

B. STACKING.

"Coverage", in Subsection B, includes one or more policies depending on the number purchased for the insured's benefit; thus, an insured may stack two underinsured motorist policies for the purpose of determining a tortfeasor's underinsured status. Schmick v. State Farm Mut. Auto. Ins. Co., 1985-NMSC-073, 103 N.M. 216, 704 P.2d 1092.

Stacking determined by law of place where the liability insurance policy originated. — Where plaintiff was involved in an automobile accident in New Mexico; the at-fault driver was uninsured; plaintiff was the named insured on an insurance policy that covered the car plaintiff was driving and on a separate insurance policy that covered another vehicle; plaintiff paid separate premiums on the policies; plaintiff owned homes in California and New Mexico, but resided in New Mexico; both policies were issued by defendant while plaintiff resided in California and listed plaintiff's address in California; both policies provided uninsured motorist coverage; the policies contained an anti-stacking provision; California law prohibited stacking, and New Mexico law favored stacking, California law governed issues pertaining to the insurance policies, including the anti-stacking provisions, and the district court did not err in dismissing plaintiff's claim for additional coverage by stacking. Wilkeson v. State Farm Mut. Auto. Ins., 2014-NMCA-077, cert. denied, 2014-NMCERT-006.

Stacking. — Whether "stacking" is to be permitted depends on the evidence presented in each case. The insured has the initial burden of proving that he paid multiple premiums for uninsured motorist coverage. Once he makes that showing, the burden shifts to the insurance company to prove that it did not charge multiple premiums for the same coverage. Lopez v. Foundation Reserve Ins. Co., 1982-NMSC-034, 98 N.M. 166, 646 P.2d 1230.

An insured is entitled to stack underinsured motorist policies for which separate premiums have been paid. Konnick v. Farmers Ins. Co., 1985-NMSC-070, 103 N.M. 112, 703 P.2d 889.

An injured insured may stack his "class one" coverage with coverage under which he is a "class two" insured, to determine his underinsured status. Morro v. Farmers Ins. Group, 1988-NMSC-006, 106 N.M. 669, 748 P.2d 512.

An insured is entitled to stack the uninsured/underinsured motorist coverage applying to two cars for which he had purchased insurance under a single policy, and for which he has paid a separate premium for each car covered, despite a clear and unambiguous liability limitation clause in the policy prohibiting stacking of those coverages. Jimenez v. Foundation Reserve Ins. Co., 1988-NMSC-052, 107 N.M. 322, 757 P.2d 792.

When an automobile insurance policy states that premiums for uninsured motorist coverage with respect to additional vehicles under the policy are included in another premium, a reasonable insured might understand that more than one premium is charged, more than one coverage is purchased, and that stacking would be permitted. Since an insurer conceptualizes and drafts the insurance contract, the insurer has an obligation to express clearly its intent not to allow stacking, to its agents who sell the policy and, more importantly, to the insureds to whom it issues the agreements it prepares. Rodriguez v. Windsor Ins. Co., 1994-NMSC-075, 118 N.M. 127, 879 P.2d 759.

Insurance companies must obtain written rejections of stacking in order to limit their liability. Montano v. Allstate Indem. Co., 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255.

Where a policy lacks a plain and affirmative declaration that the amount charged represents a single premium for a single amount of coverage, in the absence of such a declaration, insured is entitled to stack all coverages. Montano v. Allstate Indem. Co., 2004-NMSC-020, 135 N.M. 681, 92 P.3d 1255.

C. AMOUNT.

Application of offsets between primary and secondary insurers. — Neither the primary UIM insurer nor the secondary UIM insurers are directly awarded statutory offsets because the insured's recovery of UIM benefits is limited to the lesser of the insured's total damages or the insured's total stacked UIM coverage, minus the tortfeasor's liability coverage, so that the offset for the tortfeasor's liability coverage is deducted before any UIM insurer is required to pay UIM benefits. After the tortfeasor's liability coverage has been deducted, the primary insurer is required to exhaust its UIM policy limits before the secondary insurers are required to pay UIM benefits in an amounts proportionate to their respective policy limits. State Farm Mut. Auto. Ins. Co. v. Safeco Ins. Co., 2013-NMSC-006, 298 P.3d 452, overruling State Farm Mut. Auto. Ins. Co. v. Jones, 2006-NMCA-060, 139 N.M. 558, 135 P.3d 1277.

Where, in a hypothetical case, A was a passenger in a vehicle driven by B, which was struck by a vehicle negligently driven by C; A sustained $500,000 in damages; C had liability coverage of $100,000; B had primary UIM coverage of $100,000; and A had secondary UIM coverage under three policies of $100,000, $50,000, and $25,000, UIM benefits of $175,000 were available to A after C's liability coverage of $100,000 was deducted from the total stackable UIM coverage of $275,000 available to A, the primary insurer was required to pay $100,000 in UIM benefits, and the secondary insurers were each required to pay a prorated portion of $75,000, or $42,857.14, $21,428.57, and $10,714.29 respectively. State Farm Mut. Auto. Ins. Co. v. Safeco Ins. Co., 2013-NMSC-006, 298 P.3d 452, overruling State Farm Mut. Auto. Ins. Co. v. Jones, 2006-NMCA-060, 139 N.M. 558, 135 P.3d 1277.

Primary insurer, who is required to pay first, is entitled to statutory liability offset for liability payments received, where a passenger is injured by a third-party tortfeasor who is entirely at fault and the damages exceed the amount of available underinsured motorist coverage from both the primary Class II insurer and the secondary Class I insurer. State Farm Mut. Auto. Ins. Co. v. Jones, 2006-NMCA-060, 139 N.M. 558, 135 P.3d 1277, cert. denied, 2006-NMCERT-005, 139 N.M. 567, 136 P.3d 568.

In multiple-claimant situations, insured motorists who are covered under an uninsured/underinsured motorist policy and who suffer from injuries resulting from an automobile accident are entitled to collect up to the limit of their underinsurance policy to the extent that their damages exceed the amounts that the tortfeasor's insurer has previously paid to them. State Farm Mut. Auto. Ins. Co. v. Valencia, 1995-NMCA-096, 120 N.M. 662, 905 P.2d 202, cert. denied, 120 N.M. 533, 903 P.2d 844.

Underinsured motorist property damage coverage. — In the absence of a valid rejection of underinsured motorist coverage for property damage, the policy must be read to include underinsured motorist coverage equal to the amount of the liability limits in the automobile insurance policy. 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.

Where the insurer issued an automobile insurance policy to the insured with property damage liability coverage in the amount of $50,000; the insurer did not offer the insured underinsured motorist property damage coverage; and the insured made no election to reject the coverage, the policy provided underinsured motorist property damage coverage in the amount equal to the policy's limits for property damage of $50,000. 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.

Amount of coverage required. — New Mexico law requires insurers to affirmatively offer UM/UIM coverage of not less than the minimum amount required by and up to the limits of liability coverage in the automobile insurance 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.

Deduction of reimbursement from another insured. — The minimum cannot be invaded by the direct deduction from it of reimbursement to the insured from another insured. Am. Mut. Ins. Co. v. Romero, 428 F.2d 870 (10th Cir. 1970).

Recovery from underinsured motorist carrier. — Under Subsection B, an insured collects from his underinsured motorist carrier the difference between his uninsured motorist coverage and the tortfeasor's liability coverage or the difference between his damages and the tortfeasor's liability coverage, whichever is less. Schmick v. State Farm Mut. Auto. Ins. Co., 1985-NMSC-073, 103 N.M. 216, 704 P.2d 1092; Martinez v. Allstate Ins. Co., 1997-NMCA-100, 124 N.M. 36, 946 P.2d 240.

Amount of offset when tortfeasor's policy excludes punitive damages. — An insurer is not entitled to offset an injured insured's award of underinsured motorist benefits by the tortfeasor's liability limits when the insured receives an amount less than the policy limits due to a contractual exclusion for punitive damages. The insurer's offset is limited to the amount of money actually received by the insured from the tortfeasor. Farmers Ins. Co. of Ariz. v. Sandoval, 2011-NMCA-051, 149 N.M. 654, 253 P.3d 944.

Where the tortfeasor's liability policy provided liability coverage in the amount of $25,000 per person and explicitly excluded punitive damages from liability coverage; defendants' compensatory damages were less than $25,000 each; plaintiff insured the insured defendant's vehicle for $30,000 per person; and defendants each sought $30,000 in punitive damages, plaintiff was not entitled to offset the policy limits of defendant's underinsured motorist coverage of $30,000 by the policy limits of the tortfeasor's policy limits of $25,000 and pay defendant's only $5,000 each. Farmers Ins. Co. of Ariz. v. Sandoval, 2011-NMCA-051, 149 N.M. 654, 253 P.3d 944.

Limitation on underinsured recovery. — Regardless of the number of underinsured tortfeasors at fault, the legislature intended that the injured party's underinsurance recovery should be limited to the amount of underinsured motorist coverage purchased, less available liability proceeds. Fasulo v. State Farm Mut. Auto. Ins. Co., 1989-NMSC-060, 108 N.M. 807, 780 P.2d 633.

Denial of pursuit of uninsured motorist claim. — Where a plaintiff was injured in an automobile accident and collected the maximum available from the tortfeasor's liability insurance policy, and also sought uninsured motorist benefits under her own policy because the accident was caused in part by an unknown truck driver who left the scene of the accident, the trial court erred in ruling that the plaintiff was entitled to pursue her uninsured motorist claim relative to the phantom truck driver. American States Ins. Co. v. Frost, 1990-NMSC-065, 110 N.M. 188, 793 P.2d 1341.

Multiple claimants to liability coverage. — Where there are multiple claimants to the proceeds of a tortfeasor's liability coverage, in determining whether the tortfeasor is an underinsured motorist, the court must look to the liability proceeds actually available to the injured insureds, not merely the express policy limits of the tortfeasor's liability coverage. Gonzales v. Millers Cas. Ins. Co., 923 F.2d 1417 (10th Cir. 1991).

Offset of liability coverage. — Since a guest passenger injured in a one-car accident was paid the maximum liability insurance of $50,000 under the driver's policy, he was not entitled to collect the $25,000 uninsured/underinsured coverage provided under his parents' policy since, under this section, the parents' insurer was entitled to an offset equal to the driver's liability coverage. Samora v. State Farm Mut. Auto. Ins. Co., 1995-NMSC-022, 119 N.M. 467, 892 P.2d 600.

D. PUNITIVE DAMAGES.

Acts constituting rejection of maximum coverage. — Section 66-5-301 NMSA 1978 requires an insurer to affirmatively offer UM/UIM coverage in an amount equal to the liability limits of the policy. The election by an insured to purchase UM/UIM coverage in an amount less than the policy liability limits constitutes a rejection of the maximum amount of UM/UIM coverage permitted under Section 66-5-301 NMSA 1978. Progressive Nw. Ins. Co. v. Weed Warrior Servs., 2010-NMSC-050, 149 N.M. 157, 245 P.3d 1209.

Requirements for a valid rejection of maximum coverage. — To obtain a valid rejection of UM/UIM coverage equal to the liability limits of an automobile insurance policy, an insurer must inform the insured that the insured is entitled to purchase UM/UIM coverage in an amount equal to the policy's liability limits; provide the insured the premium charges for the maximum amount of UM/UIM coverage, the minimum amount of UM/UIM coverage under Section 66-5-301 NMSA 1978, and any other levels of UM/UIM coverage offered to the insured; obtain a written rejection of UM/UIM coverage equal to the limits of liability; and make the written rejection a part of the policy that is delivered to the insured. If the insurer does not obtain a valid rejection of UM/UIM coverage, the policy will be reformed to provide UM/UIM coverage equal to the liability limits. Jordan v. Allstate Ins. Co., 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214.

Invalid rejection of maximum coverage. — Where the insurer offered the insured UM/UIM coverage equal to the liability limits of the insured's policy; the insured rejected coverage in writing; the insurer periodically delivered declaration pages to the insured, which indicated the amounts of liability and UM/UIM coverage provided under the policy but did not expressly inform the insured that UM/UIM coverage equal to the limits of liability had been rejected, the rejection was invalid because it did not provide the premium costs for each available coverage option and because the rejection was not made a part of the written policy. Jordan v. Allstate Ins. Co., 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214.

Where the insurer offered the insured UM/UIM coverage equal to the liability limits of the insured's policy and provided price quotations for each available coverage option; and the insured rejected coverage in writing, the rejection was invalid because it was not made a part of the written policy. Jordan v. Allstate Ins. Co., 2010-NMSC-051, 149 N.M. 162, 245 P.3d 1214.

Punitive damages are improper when not predicated upon actual damages. — Where an uninsured motorist, fleeing from police, struck defendant's unoccupied vehicle, which sustained disabling property damage from the collision, and where plaintiff, defendant's automobile insurer, paid defendant the policy's $10,000 coverage limit for uninsured/underinsured (UM/UIM) property damage, and where defendant thereafter demanded that punitive damages arising from the property damage be paid from his UM/UIM bodily injury coverage even though no one was in the vehicle at the time of the accident and no one sustained any bodily injury, the district court erred in awarding punitive damages under defendant's UM/UIM bodily injury coverage when he sustained only UM/UIM property damage and exhausted the coverage limit for UM/UIM property damage, because punitive damages are predicated upon actual damages and are properly awarded only for the same conduct that caused the actual damages and, as a matter of law, if the UM/UIM coverage limit for one kind of loss is exhausted, an insured cannot recover additional policy proceeds from the UM/UIM coverage limits for another kind of loss when the insured did not suffer that other kind of loss. Fred Loya Ins. Co. v. Swiech, 2018-NMCA-022.

Recovery of punitive damages regardless of insurance contract. — Punitive damages are as much a part of the potential award under the uninsured motorist statute as damages for bodily injury, and therefore they cannot be contracted away in an insurance contract. Thus a policy holder may recover punitive damages regardless of the insurance contract. Stinbrink v. Farmers Ins. Co., 1990-NMSC-108, 111 N.M. 179, 803 P.2d 664.

Punitive damages offset by recovery of actual damages. — Although underinsured motorist coverage includes punitive damages, such coverage does not negate a valid offset provision in the insurance policy and the insured's recovery of actual damages from the tortfeasor may be offset against the underinsured coverage. Manzanares v. Allstate Ins. Co., 2006-NMCA-104, 140 N.M. 227, 141 P.3d 1281, cert. denied, 2006-NMCERT-008, 140 N.M. 423, 143 P.3d 185.

Punitive damages after death of uninsured motorist. — An insured cannot recover punitive damages from his insurer when the uninsured motorist dies before an award is made, since he would not be legally entitled to recover those damages from the estate of the uninsured motorist. State Farm Mut. Auto. Ins. Co. v. Maidment, 1988-NMCA-060, 107 N.M. 568, 761 P.2d 446, cert. denied, 107 N.M. 413, 759 P.2d 200.

Jurisdiction over appeal of punitive damages award. — The court of appeals has jurisdiction of an appeal of an award of punitive damages in an uninsured motorist claim. Although the obligations of an insurer are determined by application of contract law principles to the particular terms of an insurance policy, the court has jurisdiction over uninsured motorist claims against an insurer where the insurer's liability is contingent upon the tort liability of the uninsured motorist. State Farm Mut. Auto. Ins. Co. v. Maidment, 1988-NMCA-060, 107 N.M. 568, 761 P.2d 446, cert. denied, 107 N.M. 413, 759 P.2d 200.

Law reviews. — For note, "Uninsured Motorist Arbitration," see 3 N.M.L. Rev. 220 (1973).

For annual survey of New Mexico law relating to commercial law, see 13 N.M.L. Rev. 293 (1983).

For annual survey of New Mexico law relating to torts, see 13 N.M.L. Rev. 473 (1983).

For annual survey of New Mexico insurance law, see 20 N.M.L. Rev. 341 (1990).

For note, "The Court Rules on Underinsured Motorist Coverage; Keep It in the Family: Mountain States Mut. Cas. Co. v. Martinez," see 24 N.M.L. Rev. 517 (1994).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 7 Am. Jur. 2d Automobile Insurance §§ 293 to 298.

"Uninsured motorist" coverage, 79 A.L.R.2d 1252.

What constitutes an "uninsured" or "unknown" vehicle or motorist with uninsured motorist coverage, 26 A.L.R.3d 883.

Time limitations as to claims based on uninsured motorist clause, 28 A.L.R.3d 580.

What constitutes an "automobile" for purposes of uninsured motorist provisions, 65 A.L.R.3d 851.

Coverage under uninsured motorist clause of injury inflicted intentionally, 72 A.L.R.3d 1161.

Insured's right to bring direct action against insurer for uninsured motorist benefits, 73 A.L.R.3d 632.

Who is "named insured" within meaning of automobile insurance policy, 91 A.L.R.3d 1280.

Who is "member" or "resident" of same "family" or "household," within no-fault or uninsured motorist provisions of motor vehicle insurance policy, 96 A.L.R.3d 804.

Operation or use of vehicle outside scope of permission as rendering it uninsured within meaning of uninsured motorist coverage, 17 A.L.R.4th 1322.

Uninsured motorist endorsement: validity and enforceability of policy provision purporting to authorize deduction of no-fault benefits from amounts payable under uninsured motorist endorsement, 20 A.L.R.4th 1104.

Combining or "stacking" uninsured motorist coverages provided in policies issued by different insurers to same insured, 21 A.L.R.4th 211.

Combining or "stacking" uninsured motorist coverages provided in single policy applicable to different vehicles of individual insured, 23 A.L.R.4th 12.

Combining or "stacking" uninsured motorist coverages provided in separate policies issued by same insurer to different insureds, 23 A.L.R.4th 108.

Uninsured and underinsured motorist coverage: recoverability, under uninsured or underinsured motorist coverage, of deficiencies in compensation afforded injured party by tortfeasor's liability coverage, 24 A.L.R.4th 13.

Right to recover under uninsured or underinsured motorist insurance for injuries attributable to joint tortfeasors, one of whom is insured, 24 A.L.R.4th 63.

Validity, construction, and effect of "consent to sue" clauses in uninsured motorist endorsement of automobile insurance policy, 24 A.L.R.4th 1024.

Combining or "stacking" uninsured motorist coverages provided in separate policies issued by same insurer to same insured, 25 A.L.R.4th 6.

Combining or "stacking" uninsured motorist coverages provided in fleet policy, 25 A.L.R.4th 896.

Applicability of uninsured motorist statutes to self-insurers, 27 A.L.R.4th 1266.

Combining or "stacking" uninsured motorist coverages provided in policies issued by different insurers to different insureds, 28 A.L.R.4th 362.

Uninsured motorist coverage: validity of exclusion of injuries sustained by insured while occupying "owned" vehicle not insured by policy, 30 A.L.R.4th 172.

Right of insurer issuing "uninsured motorist" coverage to intervene in action by insured against uninsured motorist, 35 A.L.R.4th 757.

Statutory or policy exclusion, from automobile no-fault coverage, of property damage covered by homeowner's policy of household member who is owner, registrant, or operator of vehicle involved, 41 A.L.R.4th 973.

Uninsured motorist coverage: injuries to motorcyclists as within affirmative or exclusionary terms of automobile insurance policy, 46 A.L.R.4th 771.

Validity, under insurance statutes, of coverage exclusion for injury to or death of insured's family or household members, 52 A.L.R.4th 18.

Punitive damages as within coverage of uninsured or underinsured motorist insurance, 54 A.L.R.4th 1186.

Right of insured, precluded from recovering against owner or operator of uninsured motor vehicle because of governmental immunity, to recover uninsured motorist benefits, 55 A.L.R.4th 806.

What constitutes use of vehicle "in the automobile business" within exclusionary clause of liability policy, 56 A.L.R.4th 300.

What constitutes "entering" or "alighting from" vehicle within meaning of insurance policy, or statute mandating insurance coverage, 59 A.L.R.4th 149.

What constitutes single accident or occurrence within liability policy limiting insurer's liability to a specified amount per accident or occurrence, 64 A.L.R.4th 668.

Automobile insurance: umbrella or catastrophe policy automobile liability coverage as affected by primary policy "other insurance" clause, 67 A.L.R.4th 14.

Automobile uninsured motorist coverage: "Legally entitled to recover" clause as barring claim compensable under workers' compensation statute, 82 A.L.R.4th 1096.

"Excess" or "umbrella" insurance policy as providing coverage for accidents with uninsured or underinsured motorists, 2 A.L.R.5th 922.

Uninsured and underinsured motorist coverage: validity, construction and effect of policy provision purporting to reduce coverage by amount paid or payable under workers' compensation law, 31 A.L.R.5th 116.

Right of employer or workers' compensation carrier to lien against, or reimbursement out of, uninsured or underinsured motorist proceeds payable to employee injured by third party, 33 A.L.R.5th 587.

Validity and construction of provision of uninsured or underinsured motorist coverage that damages under the coverage will be reduced by amount of recovery from tortfeasor, 40 A.L.R.5th 603.

Automobile insurance coverage for drive-by shootings and other incidents involving the intentional discharge of firearms from moving motor vehicles, 41 A.L.R.5th 91.

Requirement that multicoverage umbrella insurance policy offer uninsured or underinsured motorist coverage equal to liability limits under umbrella provisions, 52 A.L.R. 5th 451.

Validity of territorial restrictions on uninsured/underinsured coverage in automobile insurance policies, 55 A.L.R.5th 747.

Automobile insurance: what constitutes "occupying" under owned-vehicle exclusion on uninsured- or underinsured-motorist coverage of automobile insurance policy, 59 A.L.R.5th 191.

Who is "member" or "resident" of same "family" or "household" within no-fault or uninsured motorist provisions of motor vehicle insurance policy, 66 A.L.R.5th 269.

Uninsured motorist indorsement: construction and application of requirement that there be "physical contact" with unidentified or hit-and-run vehicle; "miss-and-run" cases, 77 A.L.R.5th 319.

Uninsured motorist indorsement: general issues regarding requirement that there be "physical contact" with unidentified or hit-and-run vehicle, 78 A.L.R.5th 341.

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