New Mexicans with homes valued at more than $350,000 may soon have access to adequate home insurance through New Mexico’s FAIR Plan. The state’s insurance regulator is requesting a one-time $50 million allotment for the state-run program.
The money would allow the FAIR Plan to increase its maximum coverage limits from $350,000 to $1 million for residential properties and from $1 million to $2 million for commercial properties, according to reporting from Source New Mexico. The median sale price for homes in the state was $385,000 in November 2024, according to real estate company Redfin.
Alice Kane, the New Mexico superintendent of insurance, officially informed the Legislative Finance Committee of the request on Nov. 21 as part of the Office of the Superintendent of Insurance’s (OSI) budget request for the 2026 fiscal year. The office is aiming to increase access to affordable home insurance for qualifying residents and provide better payouts for property owners.
If approved, the additional $50 million in funding would help the OSI continue efforts to modernize the FAIR Plan program by increasing the program’s maximum coverage limits by more than 185%. The OSI already increased the FAIR Plan maximum coverage limits for residential properties, from $250,000 to $350,000, in 2024.
An insurer of last resort
The New Mexico Fair Access to Insurance Requirements (FAIR) Plan is a “property market of last resort” designed to assist property owners who’ve been denied coverage by at least two private insurers.
About 6,350 people had homeowners coverage through the New Mexico FAIR Plan during the 2023 fiscal year.
Wildfire risks make it harder to find affordable home insurance
In 2022, New Mexico had its most destructive wildfire to date. The Calf Canyon/Hermits Peak fire burned more than 340,000 acres and destroyed more than 900 structures, including hundreds of homes.
This past summer, the South Fork and Salt fires burned nearly 25,000 acres of land combined, primarily in Ruidoso, Alta, and the Village of Ruidoso Downs. The fires put more than 7,000 homes and 25,000 residents at risk and ultimately destroyed or caused significant damage to more than 1,100 homes.
This devastation is having an effect on home insurance rates in New Mexico.
The average annual cost of home insurance in the state was $3,362 in 2023, with a projected increase of 6%, to $3,554, in 2024, according to data from the Insurify home insurance report. Hidalgo, Roosevelt, and Curry counties saw a 47% increase in home insurance costs between 2020 and 2023, according to the OSI. The OSI also reports an increase in insurance companies not renewing or approving coverage in areas deemed high risk.
The OSI says the one-time funding of $50 million dedicated to the FAIR Plan program could expand coverage access to homeowners in high-risk areas and help the program stay funded in the event of future wildfires or other natural disasters.
What’s next?
The executive budget proposal for the 2026 fiscal year released by Gov. Michelle Lujan Grisham’s office on Dec. 12 includes a recommendation to allot $50 million to the FAIR Plan. Per state law, the governor’s office and the Legislative Finance Committee must each propose a comprehensive state budget each year.
On the opening day of each legislative session — Jan. 21 in 2025 — the House of Representatives will introduce the executive budget recommendation as a general appropriation act in the House of Representatives. Once reviewed and passed by the House, the act will move to the Senate for the same process. A joint legislative committee will then negotiate and draft the final bill for the governor to review and sign.
The approved budget will then be in effect for the 2026 fiscal year: July 1, 2025–June 30, 2026.
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