Auto Insurance Requirements: Colorado's Minimum Standards Explained

In Colorado, drivers are legally required to have minimum liability auto insurance. The minimum coverage requirements are $25,000 for bodily injury per person, $50,000 for bodily injury per accident, and $15,000 for property damage per accident. This means that if a driver is at fault in an accident, their insurance will cover up to $25,000 of bodily injury costs per person, $50,000 total for all injured parties, and $15,000 for any property damage. These minimums are meant to protect both the driver and other drivers, passengers, and pedestrians from incurring unmanageable expenses from collisions.

Bodily injury liability insurance

In Colorado, drivers are legally required to have bodily injury liability insurance. This is a type of third-party insurance that covers injuries, property damage, and other losses suffered by another person in a car accident where you are at fault.

The minimum bodily injury liability insurance coverage mandated by the state of Colorado is $25,000 per person and $50,000 per accident. This is commonly referred to as "25/50" bodily injury insurance. This coverage applies to accidents involving the death or injury of another person.

If you are found to be at fault in an accident and do not have the minimum liability insurance, you may face serious consequences. These can include being pulled over, ticketed, and fined at least $500 for a first offence or $1,000 for subsequent offences. Your driver's license will be suspended until you can provide proof of insurance, and your car may be impounded.

While the minimum coverage in Colorado is $25,000 per person and $50,000 per accident, it is generally recommended that drivers carry higher coverage. Financial experts typically advise drivers to opt for a 100/300 policy, which provides $100,000 per person and $300,000 per occurrence. This higher coverage ensures that you are adequately protected in the event of a serious accident.

It is important to note that bodily injury liability insurance does not cover all losses in an accident. For example, it does not cover expenses that exceed your policy limit, damage to property, or injuries sustained by passengers in your vehicle. Therefore, it is wise to carefully consider your coverage options and choose the right insurance plan that suits your needs and financial situation.

Property damage liability insurance

It is important to note that this is the minimum requirement, and higher coverages can be purchased. The recommended bodily injury liability insurance limit is $100,000 per person and $300,000 per accident. This limit is suggested to provide adequate protection for yourself and your assets in the event of a costly accident.

In addition to property damage liability insurance, Colorado drivers are also required to carry bodily injury liability insurance. The minimum requirement for bodily injury liability insurance in Colorado is $25,000 per person and $50,000 per accident. This insurance covers the injury or death of another person in an accident.

Failure to hold at least the required minimum insurance coverage in Colorado can result in penalties and fines. These penalties may include points on your driving record, fines, license suspension, and community service. It is important to prioritize having at least the minimum insurance coverage to comply with the law and protect yourself financially in the event of an accident.

Uninsured/underinsured motorist coverage

For example, if you are in an accident with an uninsured driver and have $30,000 in damages, and the other driver has no insurance, your UM coverage will cover the full $30,000 in damages. If you are in an accident and have $75,000 in damages, but the other driver has an insurance policy with a maximum limit of $50,000, their insurance will pay you $50,000, and you can then file through your UIM coverage to collect the remaining $25,000.

UM/UIM coverage also applies in hit-and-run cases where the driver is unknown. It does not, however, cover damage to the insured's vehicle.

In Colorado, insurers are required to offer UM/UIM coverage in the same amount as the policyholder's bodily injury liability limits, and it can be waived only if rejected in writing. You may select limits starting at $25,000/$50,000 (the same as Colorado's minimum liability limits) or up to the same amount of liability coverage purchased on your own policy.

While UM/UIM coverage is optional, it is necessary, especially considering that, as per 2019 data, 16.3% of drivers in Colorado were uninsured.

Collision coverage

In the state of Colorado, collision coverage is not required by law. However, it is an optional coverage type that you may want to consider adding to your auto insurance policy. Collision coverage pays to repair or replace your vehicle if it is damaged in a collision with another vehicle or object, such as a telephone pole, tree, or guardrail. This includes single-vehicle accidents and accidents where your vehicle is parked. It is important to note that collision coverage does not apply to collisions with animals or damage caused by events outside your control, such as a falling tree; these are covered under comprehensive coverage.

When deciding whether to add collision coverage to your policy, consider the value of your vehicle. If it is brand new or still worth a significant amount, collision coverage can help pay for expensive repairs or a replacement if it is damaged. Additionally, consider your ability to pay for repairs or a replacement vehicle out of pocket. If you cannot afford to do so, collision coverage can provide peace of mind. On the other hand, if your vehicle is in storage for an extended period, such as a boat or RV, you may not need collision coverage during that time.

The cost of collision coverage varies depending on personal factors such as age, gender, marital status, and driving record, as well as details about the vehicle and your location within the state. On average, collision coverage costs around $344.85 per year in Texas. Collision coverage typically includes a deductible, which is the amount you must pay out-of-pocket before the insurance company covers the rest. Deductibles usually range from $500 to $1,500, with $500 being the most common choice.

While collision coverage is not mandated by Colorado state law, it may be required by your lender if you are leasing or financing your vehicle. This is to protect their investment. If you own your vehicle outright, the decision to add collision coverage is up to you. However, if you choose not to carry it and are found at-fault in an accident, you will be responsible for paying for repairs or replacement out of pocket.

Comprehensive coverage

In the state of Colorado, drivers are required to carry liability insurance, which covers bodily injury to another person or property damage to another's vehicle or property when the insured is at fault for an accident. The minimum coverage requirements are as follows:

• $25,000 for bodily injury or death to any one person in an accident
• $50,000 for bodily injury or death to all persons in any one accident
• $15,000 for property damage in any one accident

While these are the minimum requirements, higher coverage can be purchased. Additionally, there are several optional coverage types that drivers may want to consider, including comprehensive coverage.

• Vandalism to your car
• A tree falling on your vehicle
• Water damage from a flood or rain leak
• Windshield or other glass damage
• Hail damage
• Fire damage
• Wildlife damage, such as deer

When deciding on comprehensive coverage, it is important to consider the deductible, which is the amount you must pay out of pocket before the insurance company contributes. Typically, a lower deductible results in better coverage but higher insurance premiums. On the other hand, a higher deductible leads to lower insurance costs but means you'll need to pay more out of pocket if you need to make a claim.

In summary, while comprehensive coverage is not mandatory in Colorado, it can provide valuable protection against non-collision-related incidents. It is worth considering, especially if you are financing your vehicle or want peace of mind knowing you are covered in a range of situations.

Frequently asked questions