Colorado Auto Insurance Requirements Explained
Auto insurance is usually the main source for compensating those injured in an accident, but in any given case the coverage issues can be complicated. There’s no standard policy that every driver carries, and each state – including Colorado -- has its own minimum insurance requirements.
Here's what you need to know about the different types of coverage in a typical Colorado auto insurance policy.
Required Insurance under Colorado Law
In Colorado, every driver is required to purchase a policy that provides a minimum of:
- $25,000 of Bodily Injury liability insurance (or BI) per person;
- $50,000 of BI coverage for each incident/accident; and
- $15,000 of Property Damage liability insurance (or PD).
If you get into an accident that is your fault, your BI insurance covers injuries sustained by the other driver and the passengers in his car. (BI would also cover a pedestrian injured in an accident that you caused.) BI is designed to cover the cost of immediate medical care, doctor bills and other healthcare-related expenses incurred by the other driver and passengers because of the accident (up to the dollar limits).
The per incident BI coverage is intended to cover situations where more than one person is injured in an accident you caused.
PD pays for the damage to the other driver's car and any other property or assets owned by the driver and his passengers that were damaged or lost in the accident (again, up to the stated limit). PD would also cover damage you caused to property owned by third parties (for example, a fence or building).
Both BI and PD coverage will also pay your legal fees (up to stated limits) if you get sued because of the accident you caused.
Keep in mind that BI and PD does not cover you and your passengers. If you get into an accident caused by the other driver, their BI and PD cover your damages.
Insurance companies refer to these coverage requirements informally as $25,000/$50,000/$15,000 or 25/50/15.
Uninsured/Underinsured Motorist Coverage
If you get into an accident caused by another driver who doesn’t carry insurance, or if their policy doesn’t have enough coverage to pay for your damages, you'll need Uninsured/Underinsured Motorist insurance (or UM). The insurance industry estimates that at least 15 percent of Colorado drivers are uninsured.
If you get into an accident with an uninsured driver (or underinsured driver) the UM coverage in your policy will likely be the only source for your compensation (an uninsured driver will probably not have other assets that you can reach by suing him). Purchasing UM coverage as part of your car insurance policy is a prudent way to protect your family.
Colorado recommends that drivers carry UM of at least $25,000 per person and $50,000 per accident but UM is not required – you can sign a waiver form if you decide not to buy it.
Medical Payments Coverage
Medical payments coverage pays for funeral and out-of-pocket medical expenses that you and your passengers sustain because of an accident – no matter who was at fault in the accident. This coverage can be crucial for accidents that you cause because your normal health insurance will likely have deductibles, copays and other exclusions if you've been injured in an accident that was your fault.
Colorado recommends that drivers carry Medical Payments coverage of at least $5,000 per accident but, like UM, this coverage is not required. Your insurance company will ask you to sign a waiver form if you decline to carry it.
About Levine Law
A Colorado Springs car accident lawyer can help you if you’ve been injured in an accident. At Levine Law we have 20+ years of experience making sure that accident victims receive the compensation they deserve for their injuries and vehicle damage. And our no/win, no/fee policy means that you pay nothing to Levine Law unless you receive compensation. Contact us today to arrange a free consultation.