Colorado Auto Insurance - Mandatory and Optional Types of Insurance in Colorado
No matter whether you are planning to buy your first car or whether you want to renew your Colorado auto insurance, you have to comply with the current regulations in the state of Colorado. It is worth learning more about the required types of coverage and their minimum amounts as well as about the optional coverage and whether you should get it or not.
Your policy must include bodily injury liability coverage and property damage liability coverage. The Colorado auto insurance regulations have set minimum amounts for both. You are required to purchase at least $25,000 of bodily injury liability coverage per person and $50,000 of liability per accident. The amount of property damage liability you are legally obliged to purchase is $15,000.
You are free to purchase as much of these types of coverage as you deem fit. It is important for you to calculate the financial risk you are taking by getting smaller liability coverage. In general, the more you purchase the less likely you are to use your savings and possibly other assets to pay victims of a car crash that you have caused. Experts usually recommend buying around $100,000 of bodily injury liability per person and around $300,000 per accident.
Your Colorado auto insurance policy does not have to include uninsured motorist and underinsured motorist coverage (UM/UIM). However, as of January 1st 2008, all insurance companies in Colorado are required to offer UM/UIM coverage of $100,000 per person and $300,000 per accident to their customers. In turn, you are required to state in writing that you reject this coverage. Basically, you are not obliged to have such coverage, but highly recommended to do so by the authorities. You should definitely consider adding UM/UIM to your policy to be better financially protected, in case you or a member of your family suffers injuries in a car crash.
Colorado is not a no-fault, but a Tort state. This means that the driver at fault is obliged to cover the medical expenses of victims of the collision. For this reason, you do not have to purchase personal injury protection (PIP) coverage. However, a new regulation, in force from January 1st 2009, requires insurers to include medical payment coverage of $5,000 in your Colorado auto insurance automatically. You must opt out of it in writing in order for it to be removed.
Collision coverage is not mandatory in the state of Colorado. However, just like with UM/UIM, insurers are legally obliged to offer it to you and you must reject it in writing. Even though collision coverage is optional, it can save you a lot of money for car repairs. In general, experts recommend it to those who have more expensive and rarer cars that will cost more to repair. Still, irrespective of the type of car you have, you might want to take into account the car repair expenses in advance to decide whether you can cover them out of your pocket or not, in case of collision.
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