How Auto Insurance Works after an Accident

Colorado Auto Insurance Explained

If you have been injured in an automobile crash, you may have questions about how automobile insurance—your own and the at-fault driver’s—works. Here we describe how automobile insurance coverage applies and how injury claims are handled.

INSURANCE COVERAGES FOR PERSONAL INJURIES

THE AT-FAULT DRIVER’S INSURANCE

LIABILITY INSURANCE: The at-fault driver’s liability insurance pays for your injuries and damages caused by their careless or reckless driving up to the amount of coverage.

Liability insurance for personal injury is mandatory. If you drive a vehicle on the public roads, then that vehicle must have liability insurance coverage.

The minimum amount of liability insurance personal injury coverage in Colorado is $25,000 per person and $50,000 for all persons injured in the crash.

YOUR INSURANCE

MEDICAL PAYMENTS (“Medpay”) INSURANCE: Generally, the Medpay insurance on the vehicle occupied by the injured person at the time of the crash pays for their medical expenses regardless of who caused the crash up to the amount of the coverage. (If the injured person was a passenger in somebody else’s vehicle, then that other person’s Medpay coverage would be “primary” and the injured person’s own Medpay insurance would be “secondary.”)

Medpay insurance is optional. When you buy auto insurance, the insurance company is required to offer to sell Medpay insurance to you, but you are not required to buy it.

The minimum amount of Medpay coverage that is required to be offered to you is $5,000, but you may purchase more.

We recommend that you purchase Medpay coverage because it pays medical expenses regardless of fault, is relatively inexpensive, does not have a deductible like health insurance does, and covers some treatments that health insurance does not.

UNINSURED MOTORIST (“UM”) INSURANCE: If the at-fault driver is uninsured, then your own UM insurance would pay for your injuries and damages up to the amount of the UM coverage.

Uninsured motorist insurance is optional. When you buy auto insurance, the insurance company is required to offer to sell UM insurance to you, but you are not required to buy it.

The minimum amount of UM coverage that is required to be offered to you is the amount of your liability insurance coverage, but you may purchase more.

We recommend that you purchase UM coverage because a significant percentage of drivers are uninsured.

UNDERINSURED MOTORIST (“UIM”) INSURANCE: If the at-fault driver’s liability insurance coverage is not enough to pay for all the injured person’s damages, then your own UIM insurance will pay for your damages up to the amount of the UIM coverage.

Underinsured motorist insurance is optional. When you buy auto insurance, the insurance company is required to offer to sell UIM insurance to you, but you are not required to buy it. (UM and UIM coverage is sold together; you cannot buy them separately).

The minimum amount of UIM coverage that is required to be offered to you is the amount of your liability insurance coverage, but you may purchase more.

We recommend that you purchase UIM coverage because a significant percentage of drivers have minimum liability policies ($25,000 per person; $50,000 per accident) and your damages may exceed the minimum liability coverage.

INSURANCE COVERAGES FOR VEHICLE/PROPERTY DAMAGE

THE AT-FAULT DRIVER’S INSURANCE

LIABILITY: The at-fault driver’s liability insurance pays for your vehicle/property damage caused by their careless or reckless driving up to the amount of the coverage.

Liability insurance for property damage is mandatory. If you drive a vehicle on the public roads, then that vehicle must have liability insurance coverage.

The minimum amount of liability insurance property damage coverage in Colorado is $15,000.

YOUR OWN INSURANCE

COLLISION: Your own Collision coverage will pay for the damage to your vehicle caused by a collision.

Collision coverage is not required by Colorado law. However, if you take out a loan to purchase a vehicle, then the bank or financing company will probably require the purchase of collision coverage.

The amount of collision coverage depends upon the value of the vehicle and the loan underwriting requirements.

COMPREHENSIVE: Your own Comprehensive coverage will pay for damages to your vehicle that are not the result of a collision; for example, theft, vandalism, fire, hail.

Comprehensive coverage is not required by Colorado law. However, if you take out a loan to purchase a vehicle, then the bank or financing company will probably require the purchase of comprehensive coverage.

The amount of comprehensive coverage depends upon the value of the vehicle and the loan underwriting requirements.

GAP: When you buy a new vehicle, it starts to depreciate immediately. Standard insurance covers the market value of the vehicle. If you buy a new vehicle and make a small down payment, then the amount of the loan will probably exceed the market value of the vehicle for some time. Gap insurance covers the difference between your loan balance and the market value of the vehicle.

UNINSURED MOTORIST PROPERTY DAMAGE (UMPD): UMPD pays for your vehicle damage caused by an uninsured driver and by “hit and run” drivers.

Uninsured motorist property damage insurance is optional. When you buy auto insurance, the insurance company is required to offer to sell UMPD insurance to you if you do not have collision coverage, but you are not required to buy it.

The minimum amount of UMPD coverage that is required to be offered to you depends upon the value of the vehicle and the insurance underwriting requirements.

If you have collision coverage, then it probably does not make sense to buy UMPD coverage.

If you have only liability coverage, then it might make sense to buy UMPD coverage.

We Can Help

The attorneys at Mac Hester Law are here to answer your questions. If you have questions about this blog, or if you have been injured in an accident and would like to discuss your options (in a free consultation), please do not hesitate to contact us.

Here are links to other blogs we have written on insurance coverage:

Uninsured or Underinsured Motorist? Protect Yourself!

Why Kim Kardashian Needs an Umbrella Policy to Cover Her Assets

Having Trouble Getting Your Auto Insurance Company to Pay?

Uninsured Motorist Flowchart


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