During Colorado’s most recent legislative session, a new law was added to the books which will effectively increase a Colorado insured’s limits under their Uninsured or Underinsured (UM/UIM) motorist coverage. Visit our uninsured / underinsured motorist page to refresh yourself on the nature of UM/UIM coverage.
Prior to this legislative change, the coverage available to an injured party in Colorado under their UM/UIM coverage was reduced by the amount of money paid to him or her by the responsible party’s Bodily Injury insurance carrier. As an example, if your policy provides for the minimum limits of $25,000 per person/$50,000 per accident underinsured motorist coverage, but you have received the limits of the responsible driver’s insurance policy which were also $25,000/$50,000, then no claim existed under your UM/UIM feature of your own insurance policy. However, starting in 2008, the UM/UIM carrier is no longer entitled to offset amounts of money the injured insured received under another policy. In the scenario above, the total available under all insurance policies effectively increases to $50,000/$100,000, if your injuries and losses justify the recovery of course. This new law only applies to policies issued or renewed after the January 1, 2008 effective date.
We have always counseled our clients that UM/UIM coverage is perhaps the most important type of coverage to be purchased on your automobile policy. While Bodily Injury (BI) protection is required by law, an insured in Colorado may reject UM/UIM coverage in writing. In our opinion, this would be a mistake. UM/UIM coverage is typically the least expensive type of coverage you can obtain on your policy and effectively insures every other driver out on the road who either does not have insurance or does not have enough insurance. We recommend that you purchase BI and UM coverage limits of at least $100,000/$300,000, even more if you are able to do so.