In New Mexico, asking your insurer a question can no longer be logged as a claim
In New Mexico, asking your insurer a question can no longer be logged as a claim
2026-09-15 · New Mexico · Legislation
After a hailstorm, the reflex for a board is to call the carrier and ask whether the damage is worth filing on. Until June 20, 2025 that call could be opened as a claim, land in the loss-history record, and drive the association's renewal price without a dollar ever being paid.1
What the law says
Senate Bill 221, Laws 2025 Chapter 120, signed April 8, 2025, is a one-section bill. It amends Section 59A-16-20 NMSA 1978 — the Insurance Code's list of unfair claims practices — and adds a new Subsection P:
“treating an insured's inquiry relating to damage or loss as a claim when the facts of the inquiry are not covered in the policy, the insurer makes no payment to or on behalf of the insured and the claim does not involve deceptive practices on the part of the insured.”
It passed the Senate 37–0 and the House 57–4, and took effect June 20, 2025.
Read the three conditions literally
They are cumulative. The protection applies only where (1) the facts inquired about are not covered by the policy, (2) the insurer paid nothing, and (3) there was no deception by the insured.
A genuine coverage question about a covered peril is outside the subsection's text. So is any inquiry that results in a payment.
And the qualifier that governs the whole section was left untouched: a listed practice is unlawful only when “knowingly committed or performed with such frequency as to indicate a general business practice.” One badly logged inquiry is not a violation.
Why this reaches a New Mexico association directly
Associations carry master property policies with large wind and hail deductibles, and the decision whether to file is a genuine judgment call — a roof that may or may not have sustained reportable hail damage, on a policy whose deductible may exceed the repair cost.
A board that asks the question and is told the damage is not covered has, until this law, risked a logged claim on a policy that paid nothing. Loss history drives renewal pricing and, increasingly in New Mexico, renewal itself.
The market context makes that consequential. New Mexico recorded more than 6,200 homeowner non-renewals in 2025 — an all-time record and nearly triple the roughly 2,200 recorded in 2021 — and the Office of Superintendent of Insurance has put the share of uninsured New Mexico properties at 13 percent, second highest in the country. In that market, a no-payment claim on the record is not a technicality.
The remedy is regulatory, not automatic litigation
The “general business practice” threshold means the route is a complaint to the Office of Superintendent of Insurance rather than an automatic private cause of action out of this subsection. The Superintendent regulates the insurer's practice; the subsection describes what the insurer may not do as a pattern.
For a board, that has a practical implication: documenting the inquiry matters. A complaint to OSI is only as good as the record of what was asked, when, and what the carrier did with it.
What changes at the next storm
Ask the question in writing, and frame it as an inquiry. State plainly that the association is seeking information about coverage and is not filing a claim. That is the distinction the statute now protects.
Get the deductible structure in front of you first. Since loan applications dated on or after July 1, 2026, a master policy's per-unit deductible may be as high as $50,000 under federal secondary-market rules — replacing a percentage test that produced much smaller figures on most New Mexico buildings. A board that does not know its own deductible cannot judge whether a claim is worth making.
Check whether prior inquiries were logged. If the association's loss history shows claims that produced no payment, that record is worth questioning with the carrier now rather than at renewal.
The same protection reaches your members
Subsection P is not association-specific. It applies to any insured, so it covers an owner's HO-6 or homeowner policy on the same terms — which matters most along New Mexico's eastern hail corridor and in the wildfire-exposed northern counties where loss history is driving non-renewals.
That is worth a line in an annual meeting packet. Owners ask their carriers this question far more often than boards do.
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