Have you heard of policy reformation? This is a powerful legal concept that can come into play when an insurance company or agent misled a customer.
New Mexico law requires automobile insurance companies to offer uninsured motorist and underinsured motorist coverage, also known as UM/UIM. Policyholders can reject UM/UIM coverage, but there are important requirements that a company must meet before selling a policy without UM/UIM.
The law says that a policyholder's decision to reject UM/UIM must be knowing and intelligent. In basic terms, this means that the policyholder must understand what UM/UIM means and make an independent, informed decision not to buy it. The forms used by the company must also comply with New Mexico law and regulations.
What happens if an insurance company uses non-compliant forms or otherwise misleads a policyholder? If it can be proven, then the courts may step in to put the rejected coverage back into the policy. This can be a powerful tool for people injured by uninsured, underinsured, or unknown motorists.
If you think your policy may need to be reformed, you should contact an insurance attorney who handles insurance cases for policyholders.