Colorado Car Insurance Laws

Here's what Colorado vehicle owners need to know about the state's car insurance rules, including Colorado's minimum liability coverage requirements.

Car insurance is sure to play a big part in any claim brought after a traffic accident. Colorado, like most states, requires vehicle owners to maintain certain minimum amounts of coverage in order to operate a vehicle legally on the state's roads and highways. Read on for the details of Colorado's auto insurance rules and how coverage is likely to affect a car accident case.

Colorado is a "Fault" Car Accident State

Colorado follows a traditional "fault"-based system when it comes to financial responsibility for losses stemming from a car accident: injuries, lost income, vehicle damage, and so on. This means that the person who was at fault for causing the car accident is also responsible for any resulting harm (from a practical standpoint, the at-fault driver’s insurance carrier will absorb these losses, up to policy limits).

In Colorado, a person who suffers any kind of injury or damage due to an auto accident usually can proceed in one of three ways:

  • by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the injured person's insurance company will likely turn around and pursue a subrogation claim against the at-fault driver’s carrier)
  • by filing a third-party claim directly with the at-fault driver’s insurance carrier, or
  • by filing a personal injury lawsuit in civil court against the at-fault driver.

Note: Colorado was a no-fault car insurance state until 2003. Under no-fault, a claimant doesn't usually have this same range of options. After a car accident in a no-fault state, you must turn to the personal injury protection coverage of your own car insurance policy for payment of medical bills and other out-of-pocket losses, regardless of who caused the crash. Only if your injuries reach a certain threshold can you step outside of no-fault and make a claim directly against the at-fault driver. But Colorado drivers no longer need to worry about no-fault after an in-state accident.

Minimum Liability Car Insurance in Colorado

Colorado requires that each motor vehicle in operation on the state's roads be covered by liability insurance. The required minimum amounts of liability car insurance coverage in Colorado are:

  • $25,000 for bodily injury or death of one person in an accident caused by the driver of the insured vehicle
  • $50,000 for total bodily injury or death liability in an accident caused by the driver of the insured vehicle, and
  • $15,000 for property damage per accident caused by the driver of the insured vehicle.

This basic coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.

Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.

Remember that the liability coverage we discussed here doesn't apply to your own injuries or vehicle damage after an Colorado car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, collision coverage (optional in Colorado) can pay for repairs to (or replacement of) your damaged vehicle after a car accident.

The MedPay Option in Colorado

Since 2009, Colorado has required auto insurers to offer drivers $5,000 in medical payment, or "med pay," coverage. Drivers can opt out, but if they take no action, the med pay coverage -- and the additional premium -- is added to the driver's policy automatically. MedPay coverage can be used to get quick compensation for your car accident injuries, regardless of who caused the accident.

Uninsured/Underinsured Motorist Coverage in Colorado

While uninsured/underinsured motorist coverage (UIM) is not required in Colorado, all insurers in the state must provide this kind of coverage, in an amount equal to the policyholder's chosen liability coverage for bodily injury, unless UIM coverage is waived in writing by the policyholder.

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