Colorado car insurance operates under a tort system. When an accident occurs, the driver who is found responsible for the damages is responsible for paying damages to the people who sustained a loss as a result of the accident.
Having an insurance policy in place means that a person who is responsible for causing damages in an accident is protected from having to pay the full amount personally. The insurance company will pay for an injured person’s medical bills and expenses incurred as a result of the accident, up to the policy limit.
The insurance also covers property damage, which means that it will pay for the cost of repairing the other driver’s vehicle. Any objects, such as sign posts or mailboxes, that were damaged in the accident are also the responsibility of the at-fault driver. Property damage liability coverage is bought to pay for this type of damage.
A driver can insure his or her own vehicle against damages caused by an accident by buying collision coverage. If the car is a write-off after the accident, the insurance will pay out an amount equal to the cash value of the vehicle (less the amount of the policy deductible).
Comprehensive insurance coverage covers damage to a person’s own vehicle caused by something other than a collision. It pays out if the vehicle is damaged by fire, hail or an act of vandalism. It also pays compensation if the car is stolen.