House committee hears bill to stop insurance "offsets" for underinsured motorists

Representative (presenter) introduced House Bill 97, saying the bill would end the practice of insurers offsetting an insured motorist's underinsured motorist (UIM) coverage by the at-fault driver's liability limits and "give customers what they paid for." The presenter provided handouts with examples and said the change would apply only to bodily-injury coverage.

The Office of Superintendent of Insurance (OSI) staff described the mechanics. Bruce Thompson, counsel for OSI, explained stacking and offsets during the discussion and used examples to show how a $25,000 liability policy held by an at-fault driver can leave an injured insured with unrecoverable losses under current law. Chris Myers, chief actuary at OSI, told the committee the premium analysis on the handout applies on a per-vehicle basis: "90% of the vehicles that are currently insured in New Mexico will see a 0% premium change from this bill because they already carry the coverage that we're going to be mandating." Myers also confirmed the 24.9% uninsured estimate comes from the Insurance Information Institute study that the office uses as its best available estimate.

Members questioned the bill's mandate and the potential premium impacts. Representative Armstrong asked whether the bill would "mandate insurance" and queried impacts on motorists who currently have only liability coverage; the presenter and OSI staff responded that the proposal would require UIM/UIM purchase in addition to liability for vehicles covered by insurance. Representative Dow asked for clarification about the 90% figure and whether households with multiple vehicles might still see higher total costs; Chris Myers said the statistic is per insured vehicle and the rate filings used were vehicle-based, not household-based.

Several members said they support addressing the offset even if they oppose a mandate. Representative Hartman v Hill said the offset is the “number one issue” for him: "To me, the number 1 issue this bill fixes is the offset." Representative Lundstrom said he is "very hesitant" about a full mandate but hopes an amendment could focus the bill on eliminating offsets.

Committee decorum became a point of emphasis during questioning; the chair warned presenters to address committee members through the chair. At the close of the hearing the committee took procedural action to move the bill for further consideration; sponsor and committee members said they expect to discuss amendments as the bill moves forward.

Why it matters: Supporters framed HB 97 as restoring value to insurance consumers who already buy UIM coverage but are left undercompensated when the at-fault driver's liability is credited against their own policy. Opponents warned the required purchase could increase premiums for drivers who now carry only liability coverage and might push some low-income motorists further into being uninsured.

Votes at a glance: The committee took a procedural vote and then advanced the bill for further consideration with a motion and second recorded in the transcript. Committee members signaled interest in future amendments, particularly to remove a purchase mandate while preserving the elimination of offsets.