Uninsured Motorist Coverage

Colorado law requires vehicle owner to purchase bodily injury (“BI”) liability insurance and carry evidence of such insurance at all times. In fact, motorists cannot even register a vehicle unless the application for registration is accompanied by a certificate of insurance. Against this backdrop, it is not uncommon for irresponsible motorists to acquire liability insurance in accord with Colorado law only to let it lapse thereafter. Alternatively, some motorists simply drive without registration or insurance. In the event of an accident with one of these motorists, the victim remains uncompensated if the negligent motorist is otherwise financially unable to make up for the harms caused. This has become one of the most significant problems in the civil justice system. What happens when a negligent party does not have the capacity to satisfy liability?

What is Uninsured Motorist Coverage?

Like most States, Colorado adopted legislation requiring insurance companies to offer Uninsured Motorist (“UM”) Coverage with every automobile liability policy issued. Colorado law is remedial in nature and is liberally construed to effectuate the legislative purpose of protecting people who were wrongfully injured by a negligent party who lacks BI coverage. UM coverage is both personal and portable. An insured is covered for injuries caused by an uninsured negligent motorist without regards to an insured vehicle. Otherwise stated, an insured is protected under all circumstances because the coverage follows the insured and not the vehicle. Accordingly, the injured party is protected regardless of whether he was struck while in a vehicle, on a horse, riding a bike, walking, or relaxing on the front porch.

Underinsured Motorist (“UIM”) coverage has its genesis in the inadequacies of UM legislation. It was conceived shortly after the Colorado legislature adopted the laws pertaining to UM coverage as a means to provide protection for victims of personal injury who would not be adequately indemnified by the BI carrier. More explicitly, UIM coverage comes into play following an accident when the BI coverage is not sufficient to fully compensate an injured party for the damages caused. UIM is another form of first party coverage intended to supplement such inadequate BI coverage.

Why Purchase Uninsured Motorist Coverage?

There are significant advantages of purchasing Uninsured Motorist Coverage. First, both types of coverage will pay for injuries of not only the insured, but also any resident relative living in the insured’s household, even if your vehicle was not involved in the accident. This is known as Resident Relative Coverage. Second, and most importantly, when a person is injured in an accident that was caused by an uninsured motorist, the only way to collect damages for injuries and other expenses is through Uninsured Motorist Coverage.

Uninsured and Underinsured Motorist Coverage is affordable, especially considering the amount of protection it offers. It could pay for medical bills, lost wages, and pain and suffering. During a period of time when some people are struggling economically, many drivers do not have insurance or do not have enough insurance. The more coverage a driver has, the more protected they are.

In Colorado, Uninsured/ Underinsured Motorist Coverage are mandatory in the sense they must be offered in writing by the insurer and rejected in writing by the named insured. The statutory obligation to offer Uninsured Motorist Coverage extends only to the statutory minimum amount of coverage. If neither offered in writing by the insurer, nor rejected in writing by the named insured, the statutory minimum amount of coverage is imputed by operation of law into the policy.