By Jacob F. Kimball
Managing Attorney, Civil Division
The Gasper Law Group, PLLC
Colorado law requires that your automobile insurance company offer you uninsured motorist (“UM”) and underinsured motorist (“UIM”) insurance. UM insurance applies when the person who caused you harm has no insurance coverage. UIM insurance applies when the person who caused you harm has some insurance, but it is not enough to compensate you for your injuries and damages.
For example, suppose you are hit by a driver who had never purchased insurance or whose insurance policy recently lapsed. If you had the foresight to purchase UM insurance, you could make a claim with your own insurance company for UM benefits to cover your medical bills, and other damages. If you did not purchase UM insurance, then you may end up paying for those expenses out of your own pocket, which could be financially devastating.
In Colorado, the minimum amount of insurance a driver is required to purchase is $25,000 per person, $50,000 per accident (i.e., if the person who caused the accident injured more than one person, the insurance company does not have to pay out more than $50,000 total). Anyone who has significant experience with medical bills knows that $25,000 does not go very far with today’s high medical costs. One surgery or an extended hospital stay could easily exhaust the at-fault driver’s $25,000 limit. If you purchased UIM insurance, your own insurance company would begin paying for your injuries and damages once the at-fault driver’s insurance limits are exhausted.
For example, suppose you purchased $100,000 in UIM coverage and are hit by a driver who only paid for the legal minimum insurance, and because of the accident, your medical bills and other damages total $100,000. You can recover $25,000 from the at-fault driver’s insurance company, and then you can recover the remaining $75,000 from your own insurance company in the form of UIM benefits.
There are important procedures for making UM/UIM claims. For example, it is typically best to get your UM/UIM insurance carrier’s permission before settling with an uninsured or underinsured driver; otherwise, your UM/UIM claim could be denied if you prejudiced your UM/UIM carrier. In addition, oftentimes, your UM/UIM insurer will dispute the amount of your damages, arguing that you were fully compensated by the at-fault driver’s insurance. You may even need to file a lawsuit and conduct an evidentiary hearing to demonstrate that your damages exceed the at-fault driver’s insurance limits. For these reasons, we recommend you retain an experienced personal injury attorney, such as The Gasper Law Group, to help you navigate the process, protect your rights, and get you the full amount of compensation you are entitled to.
In Colorado, you get UM/UIM insurance automatically unless you “opted out” or “waived” the coverage in writing, which usually happens when you first purchase the insurance policy. Many times, people do not know or understand what they are signing, and do not recognize a UM/UIM waiver. The attorneys at Gasper Law Group can request your application materials to find out whether or not you actually opted out in writing. We have experience with insurance companies that originally denied UM/UIM coverage, but later backed down when it was shown that the insured never actually signed a written waiver.
Many wonder if making an uninsured or underinsured motorist claim will increase their premiums or cause their insurer to cancel, reduce coverage, or refuse to renew their policy. In Colorado and many other states, this is prohibited; an insurer cannot deny or reduce coverage or raise premiums for the use of uninsured/underinsured motorist or medical payments coverage.