Chapter 11, Section A:
The Mandatory Financial Responsibility Act

Revised August 18, 2008

The Mandatory Financial Responsibility Act (MFRA)
(Sections 66-5-201 to 66-5-239 NMSA 1978)

1. Vehicle Owners Required to be Financially Responsible (66-5-201.1)

The purpose of the Mandatory Financial Responsibility Act (MFRA) is to require residents of New Mexico who own and operate motor vehicles upon the highways of the state either to have the ability to respond in damages to accidents arising out of the use and operation of a motor vehicle or to obtain a motor vehicle insurance policy.

2. Evidence of Financial Responsibility; Amounts and Conditions (66-5-208)

“Evidence of Financial Responsibility,” as used in the MFRA means evidence of the ability to respond in damages for liability, on account of accidents occurring subsequent to the effective date of evidences, arising out of the ownership, maintenance or use of a vehicle of a type subject to registration under the laws of New Mexico, in the following amounts:

  • $25,000 because of bodily injury to or death of one person in any one accident;
  • subject to this limit for one person, $50,000 because of bodily injury or death of two or more persons in any one accident;
  • $10,000 because of injury to or destruction of property of others in any one accident; and
  • if evidence is in the form of a surety bond or a cash deposit, the total amount shall be $60,000.

3. Exempt Motor Vehicles (66-5-207)

The following motor vehicles are exempt from the MFRA:

  • a motor vehicle owned by the United States government, any state or any political subdivision of a state;
  • an implement of husbandry or special mobile equipment that is only incidentally operated on a highway;
  • a motor vehicle operated upon a highway only for the purpose of crossing such highway from one property to another;
  • a commercial motor vehicle registered or proportionally registered in this and any other jurisdiction, provided such motor vehicle is covered by a motor vehicle insurance policy or equivalent coverage or other form of financial responsibility in compliance with the laws of any other jurisdiction in which it is registered;
  • A motor vehicle approved as self-insured by the superintendent of insurance pursuant to Section 66-5-207.1 NMSA 1978; and
  • Any motor vehicle when the owner has submitted to the department a signed statement, in the form prescribed by the department, declaring that the vehicle will not be operated on the highways of New Mexico and explaining the reasons therefore.

3. Self Insurers (66-5-207.1)

  • The superintendent of insurance shall issue a Certificate of self-insurance to an applicant with motor vehicles registered in his name in this state, provided that the applicant has met the same criteria for self-insurance as set by the superintendent of insurance for workmen’s compensation liability.
  • Upon not less than five days’ notice and a hearing pursuant to such notice, the superintendent upon reasonable grounds may cancel a Certificate of self-insurance. Failure to pay any judgment within thirty days after the judgment is final constitutes a reasonable ground for the cancellation of a Certificate of self-insurance.