How Can Uninsured Motorist Coverage Improve My Colorado Auto Insurance?

Colorado road sign
Although automobile insurance is required to legally drive in Colorado, some motorists choose to ignore these laws. The Insurance Research Council estimates that in 2009 roughly 15 percent of motorists in the Centennial State were uninsured. Being involved in an accident with one of these drivers could result in considerable economic loss, but including uninsured/underinsured motorist (UM/UIM) coverage to a policy could reduce these risks.

When a resident purchases vehicle coverage in CO, insurers are required to offer this additional protection with limits that are at least equal to the policyholder’s bodily injury liability limits, but motorists are given the option of forgoing UM/UIM altogether. If purchased, this policy addition covers the policyholder, other drivers covered by the policy, and passengers in the insured automobile.

UM/UIM Protections

UM/UIM coverage kicks in when the policyholder is involved in a crash where the at-fault driver has no Colorado car insurance policy or one that provides inadequate coverage.

If the at-fault motorist has no liability coverage, UM/UIM will cover the policyholder’s medical costs, lost wages, and pain and suffering damages, up to the policy limits. And if the at-fault motorist does have liability coverage but is liable for costs that exceed his or her liability limits, then UM/UIM will cover the policyholder’s remaining damages, up to the maximum stated in the policy.

Essentially, this added protection covers any gap between the at-fault driver’s coverage and the victim’s bodily injury damages. Often the victim’s policy provider will file suit against the at-fault driver for medical cost reimbursement, but until those funds are awarded, additional UM/UIM can serve as a helpful way to pay for potentially expensive injuries.

Underinsured Drivers

Although there are estimates for the amount of uninsured drivers in Colorado, less is known about the proportion of those that are underinsured. Motorists in the Centennial State are only required to carry liability coverage with minimum limits of $25,000 for bodily injury to a single person, $50,000 for bodily injury to two people or more in an accident, and $15,000 for property damage. Even though these limits may appear adequate to many vehicle owners, those thresholds could easily be exceeded in a serious crash.

The Centers for Disease Control and Prevention estimates that in 2005 the average medical cost of being hospitalized with a head injury was over $11,000, and the average medical cost of a fractured arm was over $15,000. If more than one motorist is hospitalized as the result of an accident, the resulting medical expenses could quickly accumulate.
Airbrushed Colorado state flag
Consequently, the risk of having to pay for damages that exceed one’s liability limits can be strong incentive for Colorado motorists to consider recommended insurance coverage that includes a higher liability threshold.

When buying a plan, motorists are encouraged to ask about including UM/UIM, as well as the possibilities of improving their UM/UIM threshold to cover a wide range of damages.