Your Colorado Auto Insurance Policy: Coverage and Exclusions

If you are not clear on the type or extent of coverage your auto insurance policy provides, you could find yourself vulnerable if you are ever involved in a non-covered accident. Make sure to carefully review your policy each time you renew it to ensure you know exactly what it covers. This also gives you the option to purchase supplemental insurance to protect against incidents your main policy does not.

Read on to learn more about what coverages Colorado requires that your auto insurance policy include, as well as three common policy exclusions you might not expect.
Colorado's Auto Policy Requirements
Each state sets forth minimum coverage requirements for all auto insurance policies issued in the state. This prevents insurers from offering policies with coverage limits below these thresholds. In Colorado, all policies issued must carry the following minimum coverage limits.
Bodily Injury Liability (BI)
BI coverage is a type of liability insurance that pays out whenever you cause an accident that injures or kills another person. In the Rocky Mountain State, your minimum limits will be $25,000 per person and $50,000 per accident.
Because a 5-day hospital stay can rack up $10,000 or more in medical bills — not counting the cost of any treatments — a claim can quickly meet or exceed minimum BI coverage limits when you are deemed at fault in an accident that seriously injures someone. This coverage also will not protect you if an injured driver sues you after you have exhausted your policy limits.
Property Damage Liability (PD)
PD coverage applies whenever your vehicle causes property damage. The most common property damage claims involve damage to other vehicles, but PD claims can also seek reimbursement for damage to mailboxes, garage doors, fire hydrants, and buildings. In Colorado, you will need to carry a minimum of $15,000 in coverage per property-damaging occurrence.
Uninsured or Underinsured Motorist (UM/UIM)
UM and UIM coverage will protect you if you are struck by a driver who has too little insurance (or no insurance at all). If this person's policy is unable to pay for the damages you have sustained, your own insurer will step in to make you whole. UM/UIM coverage must offer the same amount of BI coverage you select, which is not less than $25,000 per person or $50,000 per accident.
Medical Payments (MedPay)
Colorado requires its insurers to offer at least $5,000 in coverage for medical payments to you and any passengers who obtained injuries in an accident. Depending on the terms of your policy, MedPay may also pay you if another vehicle injures you while out walking, jogging, or bicycling.
Colorado's minimum coverage requirements help prevent motorists from incurring accident-related expenses they cannot pay out of pocket. But combining such low limits with the steep price of a new vehicle and the potential for hefty medical costs can mean you may still be on the hook for damages if your accident is any worse than a fender-bender.
Most insurance agents recommend you carry policy limits that are far higher than Colorado requires.
Three Exclusions You Might Not Expect
Most people know that they may be on the hook for property damage that someone else using their vehicle caused. Unless someone is a named driver on your policy, has their own insurance coverage, or uses your vehicle without permission, you take a huge risk by allowing them to get behind the wheel. But other exclusions exist that are less well-known.
Deliberate Damage
If an insurance company has good cause to believe that you have purposely damaged your own or another's vehicle, they will likely deny your claim. For example, if you receive a $3,000 repair estimate one day and total your vehicle under suspicious circumstances the next day, your insurance company might suspect that you want to get rid of a problem car while getting a check for a new one.
Private Taxi Services
Many drivers drive for ride-sharing or private taxi services. But using your car for business purposes without informing your insurance company can void your coverage for any accidents that occur while you transport someone for money. Many ride-sharing services offer their own insurance policies, and if yours does not, talk to your insurance agent to learn about your options.
Damage to Your Own Property
Every year, thousands of multi-car households suffer one of the most frustrating types of accidents — when one driver backs into their spouse's or child's vehicle. And unfortunately, insurance policies often won't provide coverage to repair either damaged vehicle if they're insured under a single policy.
Knowing your coverage limits can be the key to obtaining true peace of mind for your driving life. L.A. Insurance can help. Visit our website today for more information or to get in touch with one of our knowledgeable agents with your questions or concerns.