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If your insurance company stops responding, gives vague updates, or threatens to close your claim, act promptly. New Mexico law forbids unfair claim settlement practices and gives you ways to challenge insurer misconduct. This section explains practical steps you can take, how New Mexico law applies, and options if the insurer continues to stonewall or improperly closes your claim.

1. Immediately preserve and organize all evidence

• Keep every communication (emails, letters, text messages, voicemails). Save insurer names, claim numbers, the name and title of each person you spoke with, and the date and time.
• Keep copies of your policy, photos, repair estimates, receipts, medical records (if applicable), and any notices the insurer sent.
• Make a short timeline of events so you can show what happened and when.

2. Check your policy and any deadlines

• Read your policy to confirm what is covered, what you must do after a loss (notice, cooperation, proof of loss), and any appraisal, arbitration, or suit‑filing deadlines.
• Some policies require written notice within a particular time. Follow those requirements strictly to avoid procedural denials.

3. Send a clear written demand and ask for written confirmation

• Send a concise demand letter (email and certified mail) that states: your claim number, a short summary of the loss, the amount you believe is owed (or what you need – repairs, medical reimbursement, etc.), the specific updates you need, and a reasonable deadline for a written response (for example, 10–14 days).
• Request a written explanation for any threatened closure and ask the insurer to confirm in writing before closing the claim.

4. Use the New Mexico Office of Superintendent of Insurance (OSI)

If the insurer ignores you or threatens to close improperly, file a complaint with New Mexico’s insurance regulator. OSI can investigate consumer complaints, ask the insurer for records, and sometimes obtain corrective action. Submit your complaint online and include copies of your documentation.

New Mexico OSI consumer complaint information: https://www.osi.state.nm.us/consumers/complaint-process/

5. Know the law that protects you

New Mexico’s insurance statutes prohibit unfair claim settlement practices. These laws create regulatory standards and support enforcement by the superintendent. You can review the insurance statutes in Chapter 59A of the New Mexico Statutes: NMSA Chapter 59A (Insurance). If an insurer unreasonably delays, denies without a reasonable basis, misrepresents policy terms, or refuses to communicate, these actions may violate state law and OSI regulations.

6. Consider appraisal, mediation, or arbitration if your policy has those clauses

• Many property policies include appraisal clauses for disputes over the property value or loss amount. Review your policy for an appraisal process and the steps to invoke it.
• Some policies require mediation or arbitration before filing a lawsuit. Follow those contract procedures to preserve your rights.

7. Get an attorney if the insurer continues to delay, deny improperly, or closes without right

• An attorney who handles insurance claims can advise whether the insurer’s conduct constitutes bad faith or breach of contract and can file suit if necessary.
• If your claim involves significant damages, lost use, serious injuries, or a large coverage dispute, consult an attorney early. Attorneys can also draft demand letters that often prompt a faster response.

8. Be cautious with settlements and releases

Do not sign a full release or settlement unless the payment fairly compensates you or your attorney has reviewed it. A signed release can bar later claims.

9. Keep mitigating damages and document expenses

Mitigate further loss (e.g., take reasonable steps to prevent additional property damage) and keep receipts for temporary repairs or living expenses. These costs may be recoverable.

10. If litigation becomes necessary

An insurer that acts in bad faith may face extra‑contractual liability in New Mexico, including possible punitive damages in appropriate cases. A lawyer can explain potential remedies, timing rules, and the likely costs versus recovery.

Helpful Hints

• Document everything immediately. Notes made close to the time of calls are powerful evidence.
• Send key communications by certified mail and keep delivery receipts.
• Ask the claims representative for the reason they plan to close the claim and for any documentation they rely on.
• If the insurer points to missing information, provide it promptly if it truly exists; if they already have it, call that out in writing.
• File a consumer complaint with OSI early if communication stalls: OSI complaint page.
• Do not accept the first low offer. Get at least one independent estimate for repairs or replacement value.
• Before involving an attorney, gather a clear claim timeline, copies of your policy, and proof of your losses—this saves time and legal fees.
• If you hear a threatened “closure,” ask for the exact date and a written confirmation of the closure reason. Unclear or vague threats are easier to challenge.