New Mexico Senate Advances Amendment for Fair Insurance Plan amid Wildfire Crisis

The New Mexico Senate convened on March 8, 2025, to discuss critical amendments to the state's insurance program, particularly addressing the challenges faced by homeowners and businesses in high-risk wildfire areas. The meeting focused on Senate Bill 81, which aims to reform the existing insurance framework that has been in place since 1969.

The session began with Senator Peter Wirth outlining the necessity of the bill, citing an alarming trend of insurance cancellations due to increased wildfire risks. He shared a personal experience of receiving a cancellation notice for a property in Santa Fe, emphasizing the growing crisis faced by constituents who are unable to secure insurance to rebuild after disasters. Senator Wirth highlighted that the original residential coverage limit of $250,000 has not kept pace with inflation, which would equate to over $2 million today. The proposed amendment seeks to adjust the coverage limits to $750,000 for residential properties and $2 million for commercial properties.

Senator Gabe Ramos echoed these concerns, noting that many constituents are struggling to find insurance as the fire season approaches. He stressed the urgency of the bill, which aims to provide a safety net for New Mexicans who have lost everything to wildfires and need insurance to secure loans for rebuilding.

The Senate then moved to discuss the proposed amendments, which included restructuring the insurance board to better represent consumer interests and the insurance industry. The new board would consist of 11 members, including representatives from the insurance sector, consumer advocates, and experts in actuarial science and catastrophic risk. This change aims to create a more balanced approach to setting insurance rates and ensuring that they are actuarially sound.

Senator Wirth explained that the amendment would also require homeowners to implement mitigation measures, such as hardening their properties against fire risks, within a year of obtaining insurance. This requirement is intended to enhance the resilience of homes in vulnerable areas.

The discussion revealed a broader concern about the insurance market's stability, with several senators expressing frustration over the industry's reluctance to adjust rates in line with current risks. Senator Townsend raised questions about the fairness of the insurance system, suggesting that the current model may disadvantage homeowners in high-risk areas.

As the debate continued, it became clear that the proposed changes are not just about adjusting coverage limits but also about addressing the underlying issues of risk management and fire mitigation in New Mexico. The senators acknowledged the need for a proactive approach to forest management and fire prevention to reduce the overall risk and improve the insurance landscape.

In conclusion, the Senate adopted the first amendment to Senate Bill 81, setting the stage for further discussions on how to effectively implement these changes and support New Mexicans facing insurance challenges. The urgency of the situation was palpable, with many senators recognizing that without these reforms, countless residents could be left without the means to protect their homes and livelihoods. The bill's progress will be closely monitored as it moves forward, with the hope that it will provide much-needed relief to those affected by the ongoing insurance crisis in the state.