Underinsured/Uninsured Motorist Insurance in Colorado

Law Firm of Jeremy Rosenthal | Underinsured/Uninsured Motorist Insurance in Colorado

The state of Colorado reinforces through law the necessity of having car insurance coverage in the event of an auto accident. Under state law, it is required that each licensed motorist have at least minimal auto insurance coverage. In addition to these guidelines, residents must also show proof of insurance to register a vehicle, and a hefty fine must be paid if law enforcement officials catch residents driving without coverage. However, despite the many coverage-related regulations which the state has enacted, Colorado still continues to rank high on the list of the top 10 states that have the most uninsured drivers on the road. Researchers and insurance providers alike can’t seem to understand why.

Colorado has a thriving economy and comparatively affordable premiums. In fact, state car insurance premiums are actually below the national average. Colorado’s citizens have higher incomes than average and are able to afford insurance, which isn’t the case for residents in other ranked states like Oklahoma and New Mexico. The fact that there are so many uninsured drivers in the state could be linked to the rising rates of hit-and-runs, especially considering that these drivers fear the state’s harsh consequences of driving uninsured. In 2015, there were 7,744 reported cases of hit-and-runs. That translates to about 15 accidents per day. Fortunately, Colorado law requires that residents have access to uninsured/underinsured motorist coverage to cover expenses and damages acquired in an accident.

Uninsured (UM)/Underinsured (UIM) Insurance

Uninsured or underinsured motorist insurance is intended to cover medical fees and other damages when a driver is hit by someone who does not carry adequate insurance or any insurance at all.

It is required of all providers to offer this form of motorist coverage as an option for a new car or a motorcycle. In order to reject uninsured or underinsured insurance, drivers have to do so in writing. When this option is purchased by drivers, the policyholder, other drivers included in said policy, and the passengers (in some instances) are covered. In the simplest terms, this type of insurance operates as the at-fault driver’s insurance. It pays victims for damages in the same fashion that a driver would have recovered if the liable driver had been insured. In most cases, UM or UIM insurance coverage will be available to pay a claim regardless of the car a victim was occupying when the accident occurred. Also, under this insurance pedestrians are covered if they are hit by an uninsured driver. The state requires that the amount of coverage offered as protection of victims against UM/UIM drivers is equal to an insured motorists bodily injury liability coverage.


A few years ago, the state of Colorado made some changes to UM and UIM insurance law that expanded its accessibility and effectiveness for injured drivers involved in accidents. One of these changes was the right for a victim to “stack” or integrate separate policies of UM/UIM coverage. Before the new law was enacted, drivers would obtain this coverage on multiple insurance policies that cover several cars belonging to the same household. Insurance providers would refuse to allow the policyholder to use these multiple coverages simultaneously due to anti-stacking language contained in the fine print of each policy.

For example, let’s say Michael and Dorothy were both driving in a neighborhood when Michael, an uninsured driver, rear-ends Dorothy while she is stopped at a stop light. He later admits that he was distracted by a text message he received and didn’t hit the breaks in time. As a result of the accident, Dorothy suffered a few injuries that needed medical attention and she had lost wages from missing work. Altogether these damages totaled to about $275,000. Along with Dorothy’s liability coverage, she decided to purchase and pay for three separate UM/UIM plans that cover $100,000 for each of her three vehicles that she owns.

In accordance with the old law which allowed providers to include anti-stacking language in their policies, Dorothy would be limited to solely $100,000 in UM/UIM coverage. This is due to the fact that policyholders could only use one policy of that particular coverage at a time. Under the old law, Dorothy’s coverage would $175,000 short. Under contemporary law, Dorothy would be able to stack the coverage that she pays for the three UM/UIM plans, providing her with $300,000 for all her accrued damages. Her damages would be paid in full and she could focus on recovering and moving on from the incident without any financial issues.


Changes in the law have also prohibited insurance providers from decreasing the amount of UM/UIM coverage offered for a claim due to the amount of liability insurance offered by an underinsured, at fault driver. The act of reducing this type of coverage is called a “setoff.”

For example, imagine that Demetri and Romeo get into a collision that was caused by Romeo falling asleep at the wheel. In the aftermath of the tragic accident, Demetri sustained several injuries that forced him to spend months in the hospital. Additional rehabilitative and physical therapy services were required for him to heal. Obviously, he was not able to work during this time, so he accrued lost wages also. Altogether, his damages totaled to $200,000. Fortunately, Romeo had insurance, but his bodily injury insurance only covered $25,000. Demetri had only purchased $175,000 in UM/UIM coverage from an insurance provider.

Under previous Colorado law, Demetri’s insurance company would deduct the $25,000 offered by Romeo’s liability policy from the UM/UIM coverage Demetry purchased. But under the prevailing law, he would receive the full amount of coverage from each plan, which would ultimately cover his damages completely.

Experienced Colorado Car Accident Attorney

It’s important that car accident victims understand these changes in the law, and are able to receive the compensation they deserve for their damages. If you or a loved one has have been injured in a car accident, consult with us today for a free consultation.

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