Effective January 1st, 2008 Colorado has revised it’s statute that addresses uninsured motorists (UM) and under-insured motorist (UIM) claims.
The revisions help to patch known loopholes which prevented insured individuals from collecting the full benefits they expected to receive when purchasing UM/UIM coverage in Colorado. If you purchased, or renewed your Uninsured and/or Underinsured (UM/UIM) auto coverage policy on or after January 1st, 2008, these revisions affect you directly.
There are two ways that the UM/UIM coverage changes affect insured drivers in Colorado.
- Before January 1, 2008, insurance companies could “offset” the amount paid by the at-fault driver’s insurance company against the amount available under your own UM policy.
- Before January 1, 2008 insurance companies could include “anti-stacking” verbage in their UM coverages that kept individuals who pay for more than one policies on more than one cars in the same household from adding the UM coverage on each individual policy together in order to maximize coverage.
What is Liability Insurance
Property damage liability coverage is intended to cover any damage to the vehicle incurred in the accident by the driver identified as at-fault. Bodily injury liability coverage provides compensation for injuries incurred by individuals in a motor vehicle collision. The State of Colorado requires that every owner of a passenger vehicle (car or truck) have at least $25,000.00 in bodily injury liability insurance coverage.
What is Uninsured (UM) or Under-Insured (UIM) Insurance?
Even though Colorado law requires every auto owner in Colorado to carry insurance on their vehicle, many drivers who cause accidents do not have car insurance and are therefore “uninsured motorists.” In other cases, the driver who caused an accident may be insured but may not have enough coverage to pay for all of the injuries caused in the accident and is “under-insured.”
What Happens if I’m Injured in a Denver Uninsured Car Accident?
If the driver who causes the auto accident doesn’t have insurance, or does not have sufficient insurance, we look to your automobile insurance policy for compensation for injuries and losses. Under Colorado law, insurance companies selling automobile insurance in Colorado are required to sell Uninsured/Underinsured Motorist Insurance as part of every policy sold unless the coverage is specifically refused in writing.
Uninsured or under-insured (UM/UIM) coverage is a separate coverage that provides coverage to you and your passengers if injured in an accident caused by an uninsured or under-insured driver. This coverage “steps into the shoes” of the at-fault driver and pays you the same kind of damages you could have recovered from the at-fault driver’s insurance had the driver been insured. Uninsured motorist insurance coverage may be available to pay your claim if any resident in your household owns a car that has uninsured motorist coverage regardless of whether you were occupying the car at the time of the accident. In fact your uninsured motorist coverage will even cover you if you are a pedestrian hit by an uninsured driver.
What is “Setoff”?
Prior to January 1, 2008, your insurance company would be able to “setoff” or reduce the amount of UM coverage they would have to pay you by the amount of liability insurance available from the at fault driver.
What is “Anti-Stacking”?
The law has also been changed to stop insurance companies from using “anti-stacking” language in the policies they sell. In the past, insurance companies could charge amounts for UM/UIM coverage on multiple policies covering multiple cars in the same household. However, they would not allow the policy holder to use these multiple coverage’s concurrently.
What You Should Do Next
Contact your insurance provider immediately. The laws went into effect on January 1, 2008, and it applies to any policy issued or renewed on or after January 1, 2008. It does not automatically update or retro activate an existing policy, so please call your insurance provider today to write a new policy or renew your existing policy.
What Else Do I Need to Know?
With the new law insurance companies are required to provide you with the option of carrying equal limits of UM/UIM as up to the bodily injury liability limits. So, if your liability coverage is $75,000 then you are eligible for $75,000 in UM/UIM coverage.