FIRE DEPARTMENT INSURANCE LIMITS

SB 506 proposes setting two-tiered maximum insurance payout limits for properties damaged by fire under New Mexico's FAIR Plan. It would limit coverage to $600,000 for properties in areas served by fire departments rated 8-10 (poorer service), and $750,000 for properties in areas served by better-rated departments (rated 1-7). The bill directly affects homeowners in New Mexico who rely on the FAIR Plan for fire insurance in high-risk areas, as it ties coverage amounts to fire department service quality. The key mechanism defines "nationally recognized insurance service" and bases ratings on factors like staffing, equipment, water supply, and emergency systems. The bill was referred to committees but postponed indefinitely in June 2025.