New Mexico lawmakers are weighing a bill that would expand property insurance obligations after wildfires. The proposal would require policies covering wildfire insurance losses to also include flood and related peril coverage for five years.
The measure, Senate Bill 154, sets the clock once a wildfire is declared under control. During that period, insurers would need to cover flooding, landslides, debris flows, mudflows, mudslides, and similar events tied to post-fire conditions.
State Sen. Katy Duhigg, a Democrat representing District 10, said the bill targets a gap that repeatedly slows recovery. She said homeowners face compounding losses long after flames die out, with insurance often stopping short.
Federal data back the concern. Federal Emergency Management Agency says wildfire burn scars create hydrophobic soil, sharply raising flash flood risk for as long as five years.
Recent fires made the risk tangible. The Salt and South Fork wildfires in June 2024 destroyed more than 1,400 structures and burned over 15,000 acres, Duhigg said. Flooding and debris flows came next.
In Ruidoso and Ruidoso Downs, about 200 additional structures were lost to debris and flooding soon after the fires. Lincoln County saw another blow in July 2025, when flash flooding destroyed roughly 200 more homes, according to Duhigg.
State regulators responded last year by lifting coverage limits. The New Mexico Office of Superintendent of Insurance more than doubled maximum residential property limits under the NM Fair Plan in July 2025. Commercial limits followed.
The bill pushes further. It ties wildfire coverage directly to downstream risks insurers often classify separately.
According to Beinsure, that linkage reshapes underwriting in fire-prone regions where floods arrive fast and hard after burn events.
If enacted, the law would take effect July 1. Insurers would need to adjust policy language and pricing quickly. Homeowners in burn zones would gain broader protection during the most volatile years after a fire.
