Monthly Archives: October 2011

Shedding Light on Colorado Car Insurance Requirements

In Colorado, drivers and owners of motorized vehicles are required to carry a minimum amount of bodily injury and property damage liability insurance. The minimum required amount of Colorado auto insurance is 25/50/15. Simply stated, if you are involved in an accident and found to be at fault, your insurance will pay up to $25,000 for any bodily injury to a single individual or up to $50,000 for all individuals injured by your actions. The policy will also pay out up to $15,000 in property damage you may have caused as a result of the accident.

While these are the minimum requirements, in today’s world an accident can result in far more financial costs than the minimum insurance requirements will cover. If you are found responsible for an accident, you can and very possibly will be held responsible for any amount of damage above the minimum coverage limits. A prudent person should have adequate liability coverage to protect their personal assets.

Mandatory car insurance in Colorado does not require you to carry Comprehensive or Collision coverage to protect your own vehicle. However, if you finance a car, the lender may require you to have this type of coverage. Comprehensive insurance covers you against such things as theft, vandalism or other damage other than collision. Collision insurance covers your car regardless of which party was at fault. If the other party was at fault, your insurance company may try to recover the repair costs from the other driver’s insurance company.

In addition to Comprehensive and Collision coverage, Colorado drivers can elect to purchase Uninsured/Underinsured coverage that protects them, their named resident relatives and any passengers in their vehicle in the event of an accident with a person who has no insurance or an inadequate amount of insurance.

Finally, another optional type of coverage is Medical Payments that pays for reasonable and necessary medical expenses for you and you covered passengers without regard to liability in an accident that causes bodily injury.

How to Understand Colorado Insurance

If you are in the market for home or auto insurance in Colorado, you may be baffled by some of the words, phrases, and information you receive. We’ll address some of these issues in a question-and-answer format.

What does “coverage” mean?

Coverage means the amount of money that will be paid in the event you file a claim. For example, if you have an automobile accident, and your coverage is listed as 25/50/15, this means you have $25,000 in bodily injury per person coverage; $50,000 in bodily injury per accident coverage, and $15,000 in property damage coverage. These figures are the state minimum amounts that you must have in Colorado, but you can opt for more coverage.

OK, I can have more. Do I have to have more?

No, as mentioned earlier, the figures quoted above are what are called “state minimum amounts”. In other words, this is all the coverage you have to have in order to meet Colorado State Insurance Laws.

Do I have to have car insurance in Colorado at all?

Yes, it is State Law in Colorado that you have to have car insurance.

What about homeowners insurance?

No, you are not required by the State of Colorado to have homeowners insurance; however, some mortgage companies may make it a requirement for as long as you are paying the mortgage.