Roundhouse effort to overhaul NM's home ‘insurer of last resort' fails

Yahoo

25-03-2025

Rep. Harlan Vincent (R-Ruidoso Downs) asks questions of a panel at the Legislative Finance interim committee in Mescalero shortly after the South Fork and Salt fires. Vincent's bill to reform the state's residual insurance plan did not get through the Legislature, but he says lawmakers' other efforts will help the market cover New Mexicans who need it. (Photo by Danielle Prokop / Source NM)
Senate Bill 81, which aimed to make it easier for New Mexicans in wildfire-prone areas to secure home insurance, never received its final committee hearing in the 60-day session, but the bill's Republican sponsor said reason for optimism remains for those trying to rebuild after wildfires.
The bill would have required the board overseeing the Fair Access to Insurance Requirements plan to increase coverage limits to $750,000 for homes and overhauled a board now composed of insurance executives.
The state's top 10 home insurers have increased premiums 60%, on average, since 2022, and insurers are also increasingly refusing to renew policies or canceling them. That's what makes reforms to the FAIR plan, often referred to as the state's home 'insurer of last resort,' all the more necessary, sponsors have said.
NM Gov fire-insurance proposal 'won't happen this session'
Even with the increase of costs to rebuild homes and rising home prices, the plan only covered $250,000 of losses for most of its existence until shortly after the South Fork and Salt Fires in Ruidoso, when the board agreed to increase it to $350,000.
The FAIR plan board met again during the legislative session and increased the coverage limits to $750,000, plus up to $1 million for commercial properties, according to Rep. Harlan Vincent (R-Ruidoso Downs).
Increasing the coverage cap to $750,000 was expected to increase the number of FAIR plan holders from about 7,000 to about 11,000, state insurance officials have said.
'SB81 had lots of traction, and it was a bipartisan effort,' Vincent told Source New Mexico on Saturday, following a post-session press conference with Republican leaders. 'However, the board [was] able to meet all the demands that the bill was asking for, except for the reforming of the board.'
The bill's proposed board reforms included adding a consumer advocate, climate scientist and catastrophic risk expert to the board. It was amended again on the Senate floor to scrap that proposal and instead allow legislative leaders to appoint board members.
None of the proposed amendments would have allowed the public to see what happens in FAIR Plan board meetings, even though the Legislature created the FAIR plan in 1969 and sought a major overhaul of the program this session. Vincent told Source New Mexico he believes the meetings should be public, however.
'I'm a very transparent person,' he said. 'So, yes, I do.'
Why the state's insurance regulator thinks SB81 will save New Mexicans' homes from wildfire
Even without SB81, Vincent said he thinks other legislative acts this session will help homeowners protect their homes from wildfires and also get enough coverage to rebuild if they occur.
Several bills aim to address the insurance problem, directly or indirectly, including one that creates a state wildfire suppression fund and others that encourage or incentivize wildfire mitigation through the use of thinning and ignition-resistant construction materials.
'I'm thinking that a lot of our insurance problems are eventually going to start going away, traditional insurance starts to come back, because we were able to get four, three bills across the finish line that had to do with wildfire,' he said. 'So we're going to try to start doing wildfire mitigation so that we can make it not such a risk for insurance companies to come back.'