Auto Insurance Basics

Auto Insurance Requirements in Colorado

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The Colorado Motor Vehicle Financial Responsibility Law (Colorado Statutes Title 42 Article 7) requires that all Colorado drivers must carry auto liability insurance for no less than the minimum $25k/$50k/$15k coverage. This law means to protect both parties in a car accident when there are property damage or even injuries. You will need to have a valid policy in place when you register your car with the DMV.

If you ever get pulled over in Colorado, you may be asked to provide evidence of insurance. Have your insurance ID card with you at all times so you can avoid penalties for not presenting proofs when requested. A law enforcement officer in the Centennial State will also accept a photo of your ID card saved in your phone, or a copy of the declaration page of your policy. 

Colorado Required Car Insurance CoverageCO Required Min. Limits
Bodily Injury (BI) $25,000 per person / $50,000 per accident
Property Damage (PD) $15,000 per accident 

Colorado Car Insurance Minimum Requirements

To satisfy the law, your policy needs to at least include bodily injury and property damage coverage; this is called liability insurance. An insurance policy covers your financial liability – what you are responsible for – to the other party, whenever you are found to be at-fault for an accident to a certain degree. A policy is only valid when it includes or exceeds the following amounts (limits):

Bodily Injury (BI): up to $25,000 per injured person, but no more than a total of $50,000 per accident when there are two or more people injured in the other car. BI does not pay for your own medical bills, but it protects your personal assets when you need to pay the other party for their injuries, or when matters are taken to court in Colorado. 

Property Damage (PD): up to $15,000 per accident, PD covers the money you owe to the other party when their property is damaged. This may include the other driver’s car, items in the car that was damaged during the accident, or even collateral damage done to public properties or other people's houses. 

Optional Coverage in Colorado

The minimum liability policy fulfills your responsibility as a CO driver, but it does not protect you completely. It ensures that your financial debt to the other driver is paid for without you paying out of your own pocket (at least before the limits are hit), but it does not account for your own injuries or repairs to your own car. Here are several optional types of coverage you can add to your Colorado auto insurance policy:

Medical Payments (MedPay): this pays for your own medical expenses from injuries resulting in an accident, whether or not you are at-fault for it. In fact, all licensed Colorado insurers are obligated to offer you MedPay in the amount of $5,000 coverage per accident, unless you reject it in writing. While some Colorado motorists may find MedPay to overlap with their health insurance plan (when it is the primary coverage for auto accident injuries), note that MedPay still has some benefits. For example, if you have a high deductible health insurance policy, you'll have to pay for your medical bills up to the deductible before your insurer covers your benefits. MedPay can reimburse you, up to your Colorado limits, for your deductible.

Uninsured / Underinsured Motorist Bodily Injury (UM/UIMBI): despite auto insurance being mandatory, an estimated 16.2% of drivers are on the road in Colorado without a policy. Whenever they cause an accident, chances are they lack the financial ability to pay for your loss. UM/UIMBI ensures that under such circumstance your own insurer pays for your medical expenses. The least UM/UIMBI limits you can purchase is $25,000 per injured person and $50,000 total per accident. You can buy more in CO, but your BI limits must always be equal to or higher than your UM/UIM limits. 

Alternative Proof of Financial Responsibility 

In the event that you ever get into an accident in which someone is injured or even dies, you may be asked to submit a proof of financial responsibility. Also known as a SR-22, this a form filed with the CO government by your insurer stating that you are maintaining the required liability insurance coverage.

In Colorado, you have one alternative to a liability policy to prove your financial responsibility, and that is with a cash deposit. When you make a $65,000 deposit with the Director of the Department of Revenue, either in cash or securities (such as government bonds or notes), your requirement in Colorado is considered fulfilled. This deposit will be used to satisfy any judgment against you for the accident, and the balance returned to you after a certain period of time.

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