Colorado state auto insurance minimum requirements state that all drivers must have third party liability coverage in place. This type of coverage protects the occupants of the other vehicle.
Bodily injury liability coverage pays for medical bills and lost wages incurred as the result of a motor vehicle accident. It also pays a funeral benefit if the accident is a fatal one. The minimum amount of protection required by law is $25,000 to pay for injuries and damages of an individual accident victim and $50,000 to compensate all victims of the same accident.
Property damage liability coverage pays to repair the other driver`s vehicle after the accident. The minimum amount of coverage required for this purpose is $15,000.
Colorado is a tort state for car insurance purposes, which means that one driver must be found at fault for an accident. That person, through his or her insurance company, is responsible for paying damages. A driver can choose to buy a policy with a limit higher than the state auto insurance minimums. This is a good idea, since the minimum level of coverage will not be enough to pay for the damages caused in a serious accident.
Uninsured and underinsured motorist coverage is not required by law, but it is a good idea to add this coverage to the policy. Uninsured motorist coverage pays out when the at-fault driver does not have coverage. Underinsured motorist protection is used to to up available coverage then the at-fault driver has insurance but there is not enough coverage to pay for the damages he or she caused in the accident.