Colorado uninsured motorist coverage is optional, but every auto insurer in the state must offer it to you, and if you don’t reject it in writing you get it automatically at the same limits as your bodily injury liability coverage.1Justia Law. Colorado Code Title 10 Section 10-4-609 – Insurance Protection Against Uninsured Motorists – Applicability It pays for your bodily injuries, and your passengers’, when the at-fault driver has no insurance or not enough to cover what they owe you. About one in six Colorado drivers carries no auto insurance at all, which is why this coverage matters even though the state doesn’t force you to buy it.
Required or Optional in Colorado
Colorado does not require drivers to carry uninsured or underinsured motorist (UM/UIM) coverage. The requirement runs the other direction: insurers must offer it before issuing or renewing a policy, and the default amount matches your bodily injury liability limits. To decline it, or to pick a lower amount than your liability limits, you have to put that choice in writing. No written rejection on file means your policy includes UM/UIM at your liability level, whether you remember buying it or not.
For reference, Colorado’s mandatory minimum liability limits are $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage.2Colorado Division of Insurance. Auto Insurance A driver carrying the state minimum who accepts the default UM/UIM offer gets $25,000 per person and $50,000 per accident in UM/UIM. Higher liability limits produce a correspondingly higher UM/UIM offer.
How Much Coverage You Get
Your UM/UIM limit defaults to your bodily injury liability limit. If you carry $100,000 per person and $300,000 per accident in liability, the insurer must offer you $100,000/$300,000 in UM/UIM unless you select something lower in writing.1Justia Law. Colorado Code Title 10 Section 10-4-609 – Insurance Protection Against Uninsured Motorists – Applicability You can go lower. You cannot buy a UM/UIM limit higher than your liability coverage.
What the Coverage Pays For
UM/UIM pays bodily injury damages: medical bills, lost wages, pain and suffering, and other injury-related losses, up to your policy limits.3Colorado General Assembly. Optional Automobile Insurance Coverage The protection extends to everyone in your vehicle at the time of the crash, not just the named policyholder. A passenger hurt by an uninsured driver can claim under your policy.
Hit-and-run accidents involving unidentified drivers are covered too. Some older policies require actual physical contact between vehicles before coverage kicks in, and Colorado courts have upheld physical contact requirements as valid policy conditions. If you swerved to avoid a reckless driver and crashed without being touched, whether your policy pays depends on its exact language, so read the hit-and-run section before you need it.
What It Does Not Cover
UM/UIM coverage applies only to bodily injury. It does not pay for damage to your vehicle. The Colorado General Assembly’s own description states plainly that “it does not cover damage to the insured’s vehicle.”3Colorado General Assembly. Optional Automobile Insurance Coverage For vehicle damage caused by an uninsured driver you need collision coverage, or a separate uninsured motorist property damage add-on if your insurer offers one.
Some policies also restrict benefits when the vehicle was being used for business purposes, unless the policy specifically covers commercial use.
How Underinsured Motorist Benefits Are Calculated
Colorado treats UIM as “gap” coverage. It pays the difference between what the at-fault driver’s insurance covers and your actual damages, up to your own UIM limit. It does not pile on top of the other driver’s payment.
Say your total damages are $100,000, the at-fault driver carries the $25,000 state minimum, and your UIM limit is $100,000. The at-fault driver’s insurer pays $25,000. Your UIM pays up to $75,000 to fill the gap. It does not pay a full $100,000 on top of the $25,000, because its job is covering the shortfall, not doubling your recovery.
One protection worth knowing: your UIM insurer must cover the difference between the at-fault driver’s liability limit and your damages regardless of what you actually collected from that driver.1Justia Law. Colorado Code Title 10 Section 10-4-609 – Insurance Protection Against Uninsured Motorists – Applicability If you settle with the at-fault driver for less than their full policy limits, your UIM coverage still applies. Any policy condition requiring you to first exhaust every dollar of the at-fault driver’s limits is unenforceable in Colorado.
Stacking Coverage From Multiple Policies
Stacking means combining UM/UIM limits from more than one policy or vehicle to boost total coverage after a single accident. Colorado allows it in some situations and lets insurers block it in others.
An insurer can include anti-stacking language that prevents you from combining limits across multiple vehicles on the same policy, or across multiple policies issued by the same insurer or insurers under common ownership. What anti-stacking language cannot do is block stacking across policies issued by unrelated insurance companies.4Colorado General Assembly. SB17-182 Uninsured Motor Vehicle And Medical Coverage A policy with Company A and a separate policy with unrelated Company B can potentially be stacked.
Resident relatives add another wrinkle. Colorado case law distinguishes between policies issued directly to you and policies that cover you as an additional insured through a family member. Anti-stacking provisions apply to policies issued to the insured, not necessarily to policies covering the insured through a family member’s unrelated policy.5Justia Law. Colorado Code Title 10 Section 10-4-609 (2021) – Insurance Protection Against Uninsured Motorists – Applicability Stacking disputes turn on specific policy language, so read the anti-stacking clause closely if a denial is on the table.
The No-Setoff Rule
One of the strongest protections in Colorado’s UM/UIM statute is the ban on setoffs. Your insurer cannot shrink your UM/UIM payout because you received money from another source. The statute specifically forbids setoffs from health insurance, medical payments coverage, workers’ compensation, other liability insurance, or other UM/UIM policies.5Justia Law. Colorado Code Title 10 Section 10-4-609 (2021) – Insurance Protection Against Uninsured Motorists – Applicability
If your health insurer already paid $30,000 of your medical bills, your UM/UIM carrier cannot subtract that $30,000 from your claim. The same goes for workers’ compensation benefits. Colorado courts have consistently rejected these offsets as inconsistent with the purpose of UM/UIM coverage.
Deadlines for Filing a Claim
Colorado sets a three-year statute of limitations for both uninsured and underinsured motorist claims, running from when the cause of action accrues, which is usually the date of the accident.6Justia Law. Colorado Code Title 13 Section 13-80-107.5 (2024) – Limitation of Actions for Uninsured or Underinsured Motorist Insurance – Definitions
Two narrow extensions exist. For uninsured motorist claims, if you preserved your underlying bodily injury claim on time and later discover the at-fault driver was uninsured, you have two years from the date you learned they were uninsured, with a floor of three years from when the cause of action accrued. For underinsured motorist claims, if you preserved the underlying claim on time, you have two years from the date you received payment of the settlement or judgment against the at-fault driver, again with the same three-year floor.
These deadlines apply to lawsuits and to arbitration demands equally. Many Colorado UM/UIM policies include mandatory arbitration clauses, and the statute of limitations treats both forums the same. Missing the deadline ends the claim, no matter how strong it would have been.
When Your Insurer Delays or Denies the Claim
Colorado has a statutory remedy aimed squarely at insurers who stall or wrongly refuse valid first-party claims. Under CRS 10-3-1115, insurers may not unreasonably delay or deny payment of benefits owed to a first-party claimant.7Justia Law. Colorado Code Title 10 Section 10-3-1115 (2021) – Improper Denial of Claims – Prohibited – Definitions – Severability A delay or denial counts as unreasonable when the insurer had no reasonable basis for the decision.
If you can show your insurer acted unreasonably, CRS 10-3-1116 lets you recover two times the covered benefit, plus reasonable attorney fees and court costs.8Justia Law. Colorado Code Title 10 Section 10-3-1116 (2021) – Remedies This is a separate remedy from a common-law bad faith claim, and it carries a lower burden of proof than the traditional bad faith tort, which makes it a more accessible route for most policyholders. The protections do not apply to workers’ compensation, title, or life insurance claims.