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Colorado Car Insurance Requirements

Colorado Minimum Car Insurance Requirements

Colorado requires all drivers to carry liability insurance in order to drive legally. Failure to comply with these insurance mandates can result in you facing some serious penalties. The minimum liability coverage required in the state of Colorado is as follows:

  • $25,000 bodily injury per person
  • $50,000 bodily injury per accident
  • $15,000 property damage per accident

Listed above is the minimum amount of car insurance Colorado drivers must carry at all times. On top of it, you will have to also provide proof of coverage when asked to by Colorado law enforcement. If you have an auto loan or lease your vehicle, your lender or leasing company may require you to carry additional insurance coverage.

Colorado Liability Coverage

Colorado drivers are legally required to carry liability insurance. this insurance applies to any damage or harm you cause in an accident you are responsible for. This includes covering the other driver’s medical expenses and car repairs. Your liability insurance policy will never apply to you. What you purchase covers the bills of other drivers in an accident you cause. You can purchase additional insurance in order to cover your property and injuries.

Colorado Diminished Value Policy

Colorado is one of 15 states that are a diminished value state meaning that drivers can recover diminished value of their vehicle from the at-fault driver’s insurance company. After an accident, even if your car is completely repaired, it has still lost a good portion of its value. In Colorado, if you go to sell your vehicle following the accident, you will be able to recoup the losses you may have experienced from the other person’s insurer.

But keep in mind that there are some requirements you must meet in order to be able to file a diminished value claim in the state of Colorado. Those requirements are as outlined below:

  • You cannot receive compensation if the accident is your fault
  • The statute of limitations for filing a diminished value claim is 3 years in Colorado
  • Keep a good record of the accident as you will have to provide documentation to make a claim
  • Colorado has uninsured motorist coverage for these types of claims

Car Insurance Limits in Colorado

A limit is the amount of money your insurance will payout after an accident. Liability insurance minimum limits are determined by the state and cover three different categories. For the state of Colorado, their minimums are expressed as 25/50/15 and cover the following:

  • Bodily injury per person is the maximum amount your insurance company will pay for injuries you have caused in an accident.
  • Bodily injury per accident refers to the amount that an insurer will pay for all injuries you caused during an accident.
  • Property damage per accident is the maximum amount of money your insurer will pay for the damages you have caused during the accident.

Is Colorado’s Mandatory Insurance Minimums Enough Coverage?

The mandated liability insurance minimums for the state of Colorado are about average compared to the other states. Despite being average, it is still not great insurance coverage. It is very much recommended that you purchase beyond the state-mandated minimums. The cost for auto repairs and medical assistance can rack up very fast. While it may seem substantial when you are shopping for insurance, and the premiums could be appealing, you could be paying a lot more post-accident than you wouldn’t have to if you had expanded your coverage.

Driving Without Proof of Insurance in Colorado

As previously mentioned, failing to carry the mandated liability insurance minimums in the state of Colorado can result in some pretty serious penalties. The chart below outlines what you could be facing if you lack the proper auto insurance required for driving.

Consequences
1st Offense
2nd Offense
3rd Offense
Fines
$500, minimum
$1,000, minimum
$1,000, minimum
License Suspension
Until you show proof of insurance
4 months
8 months

In addition to the consequences presented above, you could also be required to do up to 40 hours of community service, and four points will be added to your driver's license. There can also be an SR22 requirement which you will have to maintain for three years.

Other Types of Car Insurance in Colorado

As has been stressed previously in this piece, you never want to carry only the mandated liability insurance minimums. In order to have strong coverage, you will need to either increase limits or add other types of insurance to your policy. Listed below are some common types of car insurance drivers purchase to strengthen their current car insurance policy.

  • Comprehensive: this type of insurance covers damages your car sustains when it is not in use. Some perils under this coverage include extreme weather and theft.
  • Collision: Collision coverage helps pay for damage to your vehicle after an accident, no matter who was at fault. When paired with comprehensive coverage, it is known as full coverage car insurance.
  • Medical Payments: Cost for medical assistance can pile up pretty quickly after an accident. Adding medical payment coverage to your insurance policy helps pay for injuries you and your passenger(s) sustain in an accident no matter who was at fault.
  • Loan/Lease Payoff: Also commonly referred to as gap coverage, loan/lease payoff will help cover the amount left on your lease or auto loan should your car be totaled before it has been pulled paid for.
  • Roadside Assistance: Roadside service varies from one insurance company to another, but the main idea of roadside assistance is to offer you support when you are stranded due to your car having mechanical issues. Some issues roadside assistance can help with includes dead batteries and flat tires.
  • Uninsured Motorist Coverage: Despite car insurance being state-mandated, millions of drivers choose to forego obtaining a policy, and it can be stressful if you end up in an accident with one. Due to this, it may be helpful to add uninsured motorist coverage to your car insurance plan. It will help cover costs of damage and medical expenses when the other driver is unable to.
  • Rental Car Reimbursement: If an accident is severe enough, your car may end up in the repair shop for a long time. With rental car reimbursement coverage, your insurance company will help pay for a temporary rental car while you wait for yours to be fixed.

Car Insurance is Important For Any Colorado Driver

Car insurance is one thing you should never brush off. Obtaining only the state-mandated minimum amount of liability coverage can be dangerous. It puts you and other drivers on the road at risk. You should always increase your liability limits and expand coverage through policy add-ons in order to have adequate protection in an accident. Medical costs and auto repair bills can get very pricey, very fast. You do not want to be stuck trying to pay everything out of pocket or deal with penalties that come from not carrying car insurance in Colorado.

*This product may not be available in every state, please call an agent for more information.

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