Despite the fact that Colorado law requires every automobile owner in Colorado to maintain insurance on their vehicle, many drivers who cause accidents do not have car insurance and are therefore "uninsured motorists." In other cases, the driver who caused an accident may be insured but may not have enough coverage to pay for all of the injuries caused in the accident and is "under-insured." We are frequently asked "What happens to my case if the person who caused the accident is uninsured or doesn't have enough insurance?"
If the at-fault driver doesn't have insurance, or does not have enough insurance, we look to your automobile insurance policy for uninsured or under insured coverage Uninsured or under insured (UM/UIM) coverage is a separate coverage that provides coverage to you and your passengers if injured in an accident caused by an uninsured or under-insured driver. This coverage "steps into the shoes" of the at-fault driver and pays you the same kind of damages you could have recovered from the at-fault driver's insurance had the driver been insured. Uninsured motorist insurance coverage may be available to pay your claim if any resident in your household owns a car that has uninsured motorist coverage regardless of whether you were occupying the car at the time of the accident. In fact your uninsured motorist coverage will even cover you if you are a pedestrian hit by an uninsured driver.
The newly revised Colorado Revised Statute 10-4-609, effective January 1, 2008, addresses uninsured motorist (UM) and under insured (UIM) motorist claims and closes the loopholes that prevented consumers from receiving the full benefits they thought they were buying when purchasing UM/UIM coverage in Colorado. Every uninsured and/or under insured (UM/UIM) automobile insurance policy issued or renewed in Colorado on or after January 1, 2008 is affected by this change.
What is Uninsured (UM) or Under Insured (UIM) Insurance?
“NO TO SETOFF”. Your insurance company is not permitted to setoff or deduct the amount of money paid by the at-fault driver's insurance company against the amount of money available under your own UM policy.
Prior to January 1, 2008, your insurance company was able to "setoff" or reduce the amount of UM coverage they would have to pay you by the amount of liability insurance available from the at fault driver.
Example: Emily was driving home and was hit by Kendra who ran a red light. Emily was severely injured. Kendra had insurance but her maximum insurance coverage was only $100,000. Emily had purchased $250,000 in UM coverage on her own policy.
Before January 1, 2008, after Kendra’s insurance company paid Emily the $100,000 policy limits, Emily’s insurance company was then able to deduct or "setoff" that $100,000 from her UM coverage, leaving her with only an additional $150,000 in coverage. Her total compensation was limited to $250,000.
After January 1, 2008, Kendra’s insurance company paid Emily the $100,000 policy limits. Emily’s insurance company may not deduct the $100,000 from her UM coverage and is legally obligated to pay her the maximum UM insurance coverage of $250,000. Her total compensation is $350,000.
“YES TO STACKING.” Your insurance company is not permitted to include "anti-stacking" language in the UM policy that prevents consumers from adding (stacking) the UM coverage on each separate policy together in order to maximize coverage.
Prior to January 1, 2008, insurance companies could collect premiums for UM coverage on multiple policies covering multiple cars in the same household. However, they would not allow the policy holder to use these multiple coverages at the same time.
Example: Emily was driving home and was hit by Kendra who ran a red light. Emily was severely injured. Kendra was completely uninsured. Emily had purchased and paid premiums on three separate $100,000 UM policies for each of her three cars for a total of $300,000.
Before January 1, 2008, Emily’s insurance policy contained anti-stacking language which allowed the insurance company to limit Emily’s recovery to only $100,000.
After January 1, 2008, Emily is able to combine or "stack" her three policies for a total of $300,000.