A New Mexico agency announced Wednesday that business owners struggling to secure adequate insurance due to recent wildfires can now receive up to $2 million in coverage from the state’s Fair Access to Insurance Requirements Plan.
The FAIR Plan operates as the insurer of “last resort” in the state, offering coverage only to those unable to secure coverage in the private insurance market due to natural disasters. Until recently, the plan offered only $1 million in commercial coverage.
Across the state, homeowner and other property insurance premiums have sharply increased, and insurers have refused to renew or even canceled policies in some areas, particularly the burn scars of the recent South Fork, Salt and Hermits Peak-Calf Canyon fires.
As a result, the Office of the Superintendent of Insurance earlier this summer approved increases of residential insurance coverage in the plan from $350,000 to $750,000.
“Now, we are taking another positive step forward by increasing FAIR Plan coverages for commercial properties by $1 million,” New Mexico Insurance Superintendent Alice Kane said in a news release.
Currently, 7,200 residents use the FAIR plan statewide, and so do 280 businesses, according to the news release.
“I look forward to the benefits this will provide to business owners who have been impacted by wildfires, especially as many commercial property owners continue to face non-renewals and cancellations,” Kane said.
Lawmakers sought even bigger coverage increases during the legislative session earlier this year through a bill that would have increased commercial limits to $5 million and required changes to the industry board that approves coverage increases. The bill died after the FAIR Plan board agreed to the increases taking place now, according to sponsor Harlan Vincent (R-Ruidoso Downs).
During the session, an OSI actuary that the 10 biggest insurers in the state have increased premiums on average 50% to 60% since 2022, though the actuary did not specify how much of that increase fell on homeowners or business owners.
Along with the coverage increase, the OSI asked residents in high-wildfire-risk areas to mitigate risk around their properties. They pointed property owners to risk-reduction standards from the Insurance Institute for Business and Home Safety.
