Under New Mexico law, statements made to an insurance adjuster can significantly affect the outcome of a claim. New Mexico’s Insurance Code, administrative regulations, and case law establish a framework that governs the claims process and highlights the types of statements that can harm a claimant’s position.

One of the most consequential things a claimant can say to an insurance adjuster is an unqualified admission of fault or a minimization of injuries. New Mexico courts have recognized that adjusters work to protect the insurer’s interests, not the claimant’s. In Hendren v. Allstate Ins. Co., the Court of Appeals confirmed that insurers and their claims adjusters are not required to advise an insured of possible legal interpretations and judicial decisions with respect to their claims under a policy. This means the adjuster has no duty to warn a claimant that a statement may be legally damaging. Any admission — such as saying “I’m not really hurt” or “it was partly my fault” — can be used to minimize or deny the claim.

A claimant should not agree to any settlement figure or sign any release without fully understanding the policy limits and their legal rights. In Hendren, the court found that an unqualified authoritative statement on the part of an insurer’s claims adjuster as to the maximum limits of coverage was material and, if false and relied upon by the injured party, formed a basis for avoidance. This means that if an adjuster misrepresents coverage limits and a claimant accepts a settlement based on that misrepresentation, the claimant may have a remedy — but only if they did not independently verify the information. Saying “I’ll accept whatever you offer” or agreeing to limits without verification is therefore risky.

New Mexico law recognizes that releases obtained through fraud or overreaching by an insurer’s adjuster are subject to rescission. In Ponce v. Butts, the Court of Appeals held that any settlement of an insurance claim procured by fraud, artifice, or overreaching of the insurer’s agent was subject to rescission. The court also noted that language barriers and misunderstandings about the terms of a release created genuine issues of material fact. Claimants should therefore avoid making any recorded statement or signing any document without first consulting an attorney, as such statements can lock in damaging admissions.

New Mexico’s Unfair Claims Practices Act, N.M. Stat. Ann. § 59A-16-20, prohibits insurers from failing to attempt in good faith to effectuate prompt, fair, and equitable settlements of an insured’s claims in which liability has become reasonably clear . The New Mexico Supreme Court in Hovet v. Allstate Ins. Co. confirmed that statutory provisions impose upon insurance companies a duty to deal fairly with third-party claimants, and that compelling insureds or claimants to accept less than the amount due them is prohibited. A claimant who says “I don’t need a lawyer” or “I trust the adjuster to be fair” may inadvertently waive protections that the law provides.

Under N.M. Admin. Code 13.4.8.14, all adjusters are required to be honest and fair in all communications with the insured, the insurer, and the public. However, this duty runs to the adjuster’s conduct, not to the claimant’s benefit in terms of legal advice. Claimants should not assume that an adjuster’s apparent helpfulness means the adjuster is acting in their interest. Under N.M. Stat. Ann. § 59A-13-15, a claimant has the right to contact their attorney, their insurance company, or any other person regarding the settlement of their claim, and exercising that right before making any statement is advisable.

In summary, under New Mexico law, claimants should avoid making unverified admissions about fault or injury, agreeing to settlements without understanding policy limits, signing releases without legal counsel, and assuming the adjuster is acting in their interest — as each of these missteps can undermine a claim’s value or result in a binding waiver of rights.

Communications between an insured and insurance adjusters may or may not be protected by the attorney-client privilege, depending largely on the context and purpose of the communication. Privilege generally applies if the dominant purpose of the communication was to facilitate the insured’s legal defense and if the insured reasonably expected confidentiality, such as when the adjuster is acting as or in direct coordination with counsel retained to defend the insured against a potential claim or litigation. Early investigative statements given to adjusters before any litigation is anticipated, or where the adjuster acts in the insurer’s interest rather than that of the insured, typically fall outside this privilege. The insured’s statements may be used by the insurer against the insured, especially if the insurer has adverse interests, such as claim denial. The privilege is generally stronger in liability insurance contexts where the insurer is contractually obligated to defend the insured, while first-party claims contexts may have a different focus.

Insurance adjusters are usually laypersons who investigate claims and estimate losses but do not engage in the unauthorized practice of law if they refrain from giving legal advice or negotiating in ways that determine legal rights and liabilities. Their role typically involves factual inquiry and conveying counsel’s opinions without substituting their own legal judgment. Courts have distinguished between company-employed adjusters and independent adjusters, with the latter more likely to be restricted from performing activities amounting to legal practice. Overall, insureds’ statements to adjusters should be given cautiously, as such statements can be critical in claims adjustment and potential bad faith claim evaluation.