Colorado Auto Insurance Requirements: Tips for Colorado Drivers

July 5, 2017 | McCormick & Murphy's Blog

Uninsured motorist coverage colorado
In Colorado, all drivers are required to have car insurance, although unfortunately, not all abide by this rule.

For this reason, Colorado law requires insurers to offer policyholders the option of purchasing uninsured/underinsured motorist (UM/UIM) coverage.

Having these policies ensures that even if a driver is involved in an accident with someone who does not have insurance coverage or who has insufficient coverage, the injured party will still be able to collect from his or her own provider and so pay medical bills and other accident-related expenses.

In some severe cases, an injured party’s UM/UIM coverage may still not be enough to cover medical expenses, which may require the victim to seek damages in court by filing a personal injury claim.

Filing a claim requires plaintiffs to go through a number of procedural hurdles, so if you were injured in an accident with an uninsured or underinsured driver, it is important to speak with an experienced car accident attorney who can help explain your legal options.

Minimum Liability Insurance

Colorado law requires drivers to carry a certain amount of liability insurance, including:

  • $25,000 per person to cover bodily injury;
  • $50,000 per accident for bodily injury; and
  • $15,000 per accident to cover the cost of repairing property damage.

However, liability insurance only covers the other car or driver when an accident is the policyholder’s own fault. To ensure that they are covered in the event that they are injured in an accident caused by someone who does not have insurance, drivers should also purchase uninsured/underinsured policies. This type of coverage is only offered in addition to a primary automobile insurance policy and is not offered in stand-alone policies.

Uninsured Motorist Coverage in Colorado

When a person is injured in an accident caused by another uninsured or underinsured driver and he or she has a UM/UIM policy, the injured party’s coverage will step into the shoes of the at-fault driver to cover damages.

This is also true in situations where the at-fault party does have insurance, but his or her policy limits do not cover the extent of the injured person’s expenses. In these cases, the UM/UIM coverage will cover the difference between the policy’s limit of liability coverage and the amount of damages sustained.

These policies also cover pedestrians and cyclists who are injured in a collision with a motorist. In fact, drivers or passengers who have UM/UIM coverage and are involved in an accident while in someone else’s vehicle are also eligible to recover if the other party was at fault.

All insurance companies that sell auto insurance in Colorado are required by law to offer UM/UIM motorist coverage to policyholders. To opt out of coverage, policyholders must agree to forego it in a signed writing. Those who do decide to purchase UM/UIM coverage, however, must receive details from the insurer on what the policy provides, which includes the terms of the policy, the premiums that must be paid, and the available benefits.

Furthermore, since 2008, Colorado law has required insurance companies to provide consumers with the option of carrying UM/UIM coverage that is equal to the limits of their bodily injury liability policy. This means that if a driver has liability coverage of up to $100,000, he or she will automatically be eligible for $100,000 in UM/UIM coverage.

Statute of Limitations

Generally, injured parties have three years from the date of their accident to file an uninsured or underinsured motorist claim with their insurance provider. However, if a payment is made for the underlying injury within three years, the injured party will be granted an additional two years from the date of receipt of the payment to file an underinsured claim.

These extra two years allow injured parties who become aware of an uncompensated loss only after the underlying bodily injury claim was finalized, the option of filing an underinsured claim and collecting additional benefits from their insurer.

To ensure that injured parties do not miss the deadline, they should be sure to file an underinsured claim before the three years have expired. This will allow them to preserve their two-year extension and avoid having their claim barred by the insurer and the court.

Denied Claims

While many insurers are careful to respond to claims promptly and to conduct efficient and honest investigations, thousands of claims are still unfairly denied every year. Insurers are required by law to deal with their clients in good faith, which includes providing prompt service. When insurers fail to respond to a claim within a reasonable time or fail to conduct in-depth investigations, they can be held legally liable for damages.

Insurers are also prohibited from raising a policyholder’s rates or canceling coverage in response to a claim for UM/UIM benefits. If an insurer fails to abide by these rules and unfairly denies a claim, unreasonably delays making a decision, or increases premiums after paying out a UM/UIM claim, the policyholder who was wrongly denied can file a claim of bad faith insurance practices against the insurer in court for damages.

Contact Us about your Uninsured Motorist Coverage Claim

Being injured in an accident can be emotional, painful, and stressful. This is especially true when the at-fault party does not have insurance.

Fortunately, drivers have the option of obtaining UM/UIM coverage to help cover medical bills and lost wages in the event that they are involved in an accident with an uninsured driver.

However, even when drivers have this coverage, their claims are often denied or their premiums are unfairly increased, so if you were injured in an accident that was caused by an uninsured driver, please contact McCormick & Murphy, P.C. by calling 888-668-1182 to speak with a capable and skilled car accident attorney who can evaluate your case.

We have offices in Colorado Springs, Denver, and Pueblo and are happy to answer your questions at any time via live chat.

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