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Colorado Auto Insurance Coverages

Every vehicle driving on Colorado’s public roads is, by law, required to be insured.  C.R.S. 42-7-604 tasked the State with developing and maintaining a database of insured vehicles.  Insurance companies who issue automobile policies in Colorado are required to report all new policyholders and cancelled policies to the service at least once a month.  

Available Coverages

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Bodily Injury Liability (BI)

Bodily Injury Liability insurance covers you if you cause a car accident which results in injuries to someone else.  The minimum coverage all drivers must carry in Colorado is $25,000 per person and $50,000 per accident. 

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Property Damage Liability

Property Damage coverage pays for damage to someone else’s property following a motor vehicle accident.  In most cases, this will cover the cost to repair someone else’s vehicle, but in some accidents damage to physical property, such as fences, street lights, buildings and utility poles, can occur.  Colorado law requires every policy carry a minimum limit of $15,000 per occurrence for property damage coverage. 

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Collision Coverage

Collision coverage pays for damage to your vehicle that is the result of a collision, whether caused by you or by someone else.  It is not required by law, but if your vehicle is being financed, most banks require you to carry the coverage for the duration of your loan. 

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Comprehensive Coverage

Comprehensive coverage pays for your vehicle if it is stolen or if it is damaged by something other than a collision.  This includes hail damage, fire, flooding, wildlife and theft.  It is not a required coverage, but again, if your vehicle is financed, your lender may require you to carry it.

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Uninsured/Underinsured Motorist (UM/UIM)

Unfortunately, despite the legal requirement, many Colorado drivers fail to carry insurance on their vehicles or do not carry sufficient coverage to fully compensate all parties injured as a result of their negligence.  Uninsured/Underinsured Motorist coverage can compensate you for your injuries if you are involved in an auto accident with an uninsured driver or if the at-fault driver’s bodily injury limits are insufficient to fully compensate you for your injuries and damages.

Colorado law requires insurers to offer UM/UIM coverage limits that equal to the bodily injury limits you choose for your policy.  UM/UIM coverage can also be rejected, but this must be done in writing.  We highly recommend that all drivers carry UM/UIM coverage on your policy of insurance.  If you are injured by an uninsured driver or if an at-fault driver carries only minimum limits, UM/UIM coverage can provide additional compensation for your medical expenses, loss of income and pain and suffering.

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Medical Payments Coverage

Colorado insurers must include $5,000 in medical payments coverage on all automobile policies issued in the state.  The purpose of the coverage is to pay for the first $5,000 of medical bills after a motor vehicle accident, regardless of who is at fault.  Consumers can decline medical payments coverage but must opt out in writing.  You can also choose a higher amount of coverage to further protect you and your family. 

Colorado law requires insurance companies to hold $5,000 for 30 days after an accident to pay trauma related bills (ambulance, hospital, ER physicians).  After 30 days, you can submit any accident related medical bills for payment, including reimbursement for out-of-pocket expenses, such as prescriptions and copayments. 

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Personal Liability Umbrella Policies

Personal Umbrella Policies provide coverage over and above your automobile or homeowner’s policy limits.  If you or a family member causes a collision and your BI policy limits are insufficient to cover all of the damages, your umbrella policy would step in to cover any additional amounts you may owe. 

Some personal umbrella policies also provide UM/UIM coverage which would provide additional coverage for you and your family if they are injured by an uninsured or underinsured driver.  Most Umbrella Policies require the policyholder to purchase a minimum level of underlying automobile and homeowner’s liability coverage.  This amount varies by insurer.   

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How Can You Protect Yourself and Your Family?

Everyone has different needs when it comes to the amount of coverage they should carry on their insurance policies.  It’s very important for each individual to periodically evaluate their coverage to determine if changes should be made to better protect you and your family.  As a general rule, if you can afford to carry more than the mandatory minimum coverage, it is highly recommended.  This is especially true for Medical Payments and UM/UIM coverage as both types of coverage can provide benefits to you and your family members if you are injured in an auto accident

No one wants to be in a situation where you need to utilize your insurance benefits, but finding out that you don’t have adequate coverage after an accident will only add to an already stressful situation. 

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