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Your car insurance is really six separate policies—some are required, others optional—carefully weigh your risks when buying protection for you and your family.
Carole Walker, RMIIA

Colorado Auto Insurance Requirements

By law, most states require that you have certain types of coverage with minimum liability limits. Many insurers recommend that your bodily injury liability limits be at least $100,000 per person and $300,000 per occurrence.

The question you're probably now asking yourself: How much insurance do I need? Colorado law mandates that auto insurance policies provide the following:

Bodily injury liability (BI) coverage covers you if you cause an accident in which someone else is hurt or killed. Many financial experts recommend carrying at least $100,000 per person and $300,000 per occurance - commonly expressed as "100/300." Consider what assets you have to protect and what you can afford when deciding how much to purchase.

  • Colorado requires limits of $25,000 per person for bodily injury, $50,000 per accident for bodily injury—commonly expressed as "25/50."

Property damage liability (PD) coverage covers you when you damage someone else's property. Usually it's someone else's car, but it could apply to buildings, utility poles, garage doors, and other physical property. State laws determine the minimum you must purchase.

  • Colorado requires a limit of $15,000 per occurence.

Uninsured/Underinsured motorist (UM/UIM) coverage covers medical and other expenses when you are hit by a driver without adequate auto insurance. You can purchase additional coverage to pay for damage to your car if hit by an uninsured motorist, but many people instead just purchase collision and comprehensive.

In Colorado, insurers are required to offer UM/UIM in the same amount as the bodily injury liability limits you select. UM/UIM can be waived only if it's rejected in writing. You may select limits starting at $25,000/$50,000 (same as Colorado's minimum liability limits) on up to the same amount of liability coverage you purchase on your own policy. Most people choose to carry it because it can cover your economic damages such as medical bills, as well as some non-economic damages should the person who hit you be uninsured or underinsured.

Colorado's State Legislature passed a law, effective January 1, 2008, requiring an expansion of UM/UIM, so it's a good idea to review your options on this particular coverage. Some people won't see any premium or coverage changes, but it can vary for individuals and companies, so bottom line—ask how it affects your policy and decide what is the best protection for you.

Medical payments coverage (Med Pay, or MPC) As of January 1, 2009, Colorado insurers are required to offer you $5,000 in coverage. You must opt out or the coverage and premium will automatically be added—whether you're buying a new policy or renewing one. You can choose not to buy med pay or purchase a different amount. But, if you don't want it you must reject it in writing or in the same way you buy insurance, for example, over the Internet or telephone. The new law also requires your insurer to hold $5,000 of your medical payments coverage for 30 days to pay for trauma bills first.

Collision coverage covers damage to your car if you run into another car, a brick wall, a fire hydrant, or other object. This coverage is not required by law, though your bank may require it if you have an auto loan. You may choose a deductible on this coverage—what you must first pay out-of-pocket for a claim before the insurance kicks in.

Comprehensive coverage covers you in case your car is stolen or damaged in ways that don't involve a collision. Covered risks include hail, fire, theft, flood, earthquake, explosion, falling objects, and encounters with wildlife, such as deer. Comprehensive is optional coverage, though your bank may require it if you have an auto loan. You may choose a deductible on this coverage.

If you can afford more insurance, carrying more than the mandatory minimum requirement is recommended. Think about the amount of insurance you'll need when you need it the most. Families should sit down with their insurance agent or company representative to determine the right amount for each individual and family.

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