Auto Insurance Articles:
TYPES OF AUTOMOBILE INSURANCE
When buying car insurance, you will be confronted with the following types of coverage, some of which are required under Colorado law and some of which you can reject. You pay a separate dollar amount for each of these types of coverages:
Liability Coverage - This insurance, which you must have in Colorado, will pay damages to persons injured in an accident that you cause. WHY SHOULD I HAVE LIABILITY CAR INSURANCE?
Medical Benefits or Med-Pay - OPTIONAL Medical Benefits or Med-Pay coverage pays for the medical bills of any driver or passenger in the insured motor vehicle. Med Pay is available in levels from $5,000 to $25,000 per person under most policies.
Even if you do have health insurance, health insurance often has gaps of non-coverage for deductibles, co-pays, other insurance, and limited payments for certain types of care. Your health insurance agent should be consulted regarding these gaps. A good Med-Pay policy will cover many of these gaps of coverage. Your health insurance will also not pay for the medical treatment of unrelated passengers who are injured while in your vehicle. However, Med-Pay coverage will pay (up to the Med-Pay benefit limits) for medical care for such unrelated passengers, thereby giving the policyholder more protection.
Collision - This optional coverage will pay for damage to your vehicle when your vehicle collides with another car or any other object and there is no other insurance, such as for the driver that may have hit your vehicle, that will provide coverage.
Comprehensive - This type of optional coverage will cover damage to your vehicle, or its contents, from causes other than a collision, such as vandalism or theft.
Uninsured/Underinsured (UM/UIM) Motorist Coverage - This will pay for your damages in the event that the driver that caused your accident does not have any liability insurance coverage (uninsured), or does not have enough coverage to pay all of your damages (underinsured). UM/UIM. This coverage is optional, but it is relatively inexpensive and highly recommended due to the large number of uninsured and underinsured drivers, any one of which could cause you personal injuries. For more information on UM/UIM coverage, click here to see UNINSURED AND UNDERINSURED MOTORIST COVERAGE.
You should consult with your insurance agent to determine which coverages you should have and in what amounts. Keep in mind that saving a little money by getting lower amounts of coverage may cost you in the long run. For example, if you cause an accident in which someone is severely injured and you do not have enough liability coverage to pay their damages, the injured person could possibly take away many of your personal assets, such as your home, to cover their damages.
UNINSURED AND UNDERINSURED MOTORIST COVERAGE (UM/UIM)
What happens if a careless driver who causes you or your family members substantial injuries is uninsured or underinsured? In this case, you would turn to your own insurance company, if you were wise enough to purchase uninsured/underinsured motorist coverage. Your uninsured/underinsured motorist (UM/UIM) coverage makes your own insurance company responsible for paying all of your damages up to the UM/UIM motorist coverage policy limit. This UM/UIM coverage is surprisingly inexpensive, yet it is optional and often rejected by consumers. This is a huge mistake. In Colorado, it has been estimated that 1 in 6 motorists on the road are uninsured. Therefore, your chances of being hit by an uninsured or underinsured driver are higher than you might think. Since July 1, 2003, it is more likely that a large number of motorists will be UNDERINSURED as many LIABILITY policies will not be adequate to cover all of the medical bills and other damages of accident victims. There are thousands of accidents each year in Colorado involving uninsured and underinsured motorists. The only sensible way to protect yourself from uninsured drivers is to buy as much UM/UIM motorist coverage as you buy for your liability coverage. Thus, buy $100,000 in UM/UIM if you have $100,000 in liability coverage. If you do not have uninsured motorist coverage and you are seriously injured by an uninsured driver who is judgment proof, you are out of luck.
Also, by buying a sizeable uninsured motorist policy, it also protects you from UNDERINSURED (UIM) drivers. For example, if another driver has only the minimum $25,000.00 policy limits, and seriously injures you, the maximum that you will be able to recover is $25,000.00 from the insurance company of the other driver. This does not help much if you have substantial medical bills or are crippled for life or permanently unable to work. However, if you had a $100,000.00 (or more) uninsured/underinsured motorist policy (UM/UIM), you could recover $25,000.00 from the other driver and the remaining $75,000.00 (or $100,000 for policies issued s or renewed after January 1, 2008) from your own UM/UIM policy if your injuries justify that amount of damages.
For insurance policies with UM/UIM coverage issued or renewed after January 1, 2008, an injured victim will receive the full benefit of the UM/UIM coverage purchased by virtue of a 2007 Colorado law which allows the injured party to also recover from his/her UM/UIM coverage even if it is the same amount of coverage as the at fault driver’s liability coverage. Given legislative changes made in 2003 (eliminating no-fault coverage) that generate more underinsured motorists, it is a good idea to buy at least $100,000 in UIM coverage, and more if you can afford it. It is advisable to purchase UM/UIM coverage that is sufficient to pay all of your medical bills, all of your lost wages, any permanent impairment, as well as your pain and suffering that may occur from an auto accident.
UM- Property Damage - The UM/UIM coverage discussed above involves personal injuries and bodily injury. However, it is possible to purchase insurance to pay for property damage to your car if you are hit by an uninsured motorist. Uninsured motorist coverage for your car is not necessary if you purchase collision coverage for your vehicle. Collision is an optional coverage which will pay for damage to your vehicle when your vehicle collides with another car, or any other object and there is no other insurance that will pay for the damage to your car. Collision coverage also pays for the damage to your car when you are at fault in the accident.
If you are hurt in a car accident, it is advisable that you seek legal counsel who is experienced in personal injury matters.
WHY SHOULD I HAVE LIABILITY CAR INSURANCE?
Colorado Law requires that you carry minimum Liability car insurance. Liability coverage will pay damages to persons injured in an accident where you are at fault. Your failure to carry Liability insurance can cause you to be jailed, fined, required to perform community service, result in the suspension of your driver’s license, and result in the attachment of your assets and garnishment of your wages to pay for the damages of an injured party.
The minimum Liability policy in Colorado pays for damages of up to $25,000.00 for each injured individual with a total of $50,000.00 per accident. This is a 25/50 policy. This means that the insurance company will pay the first $25,000.00 in damages to an injured person and, you are responsible for any damages in excess of $25,000.00. Given that hospital bills and other damages in many car accidents are often well in excess of $25,000.00 or $50,000.00, it is usually wise to protect yourself by purchasing additional Liability coverage (the minimal increase in cost may surprise you).
After July 1, 2003, your Liability coverage must be sufficient to cover ALL of the medical expenses of ALL persons injured due to your fault, PLUS, the Liability coverage must be large enough to cover all past and future wage loss, all permanent impairment, disfigurement, pain & suffering, and all other items of damages of injured victims.
Therefore, to protect your personal assets, it is very important to carry sufficient auto Liability coverage.
It is advisable to check with your insurance agent for the additional cost for purchasing at least a 100/300 policy ($100,000.00 per person/$300,000.00 per accident) or a policy that will provide you with greater protection e.g. $250,000 per person/$500,000 per accident, or $500,000/$1 million, or even an “excess” or “umbrella” Liability policy.
Typically, Liability coverage protects you from claims against you for all economic damages (e.g. wage loss, medical bills, etc.), arising from an auto accident, as well as for all damages for pain and suffering (physical and mental), and any permanent impairment or permanent disfigurement that an injured party may suffer. However, what happens if you suffer from serious injuries due to the fault of another driver? The answer is that you would collect these damages from the driver or drivers who were at fault in the accident. Your damages would be paid from the negligent driver’s Liability insurance policy up to the maximum of the policy limits of that negligent driver. If your damages exceed the Liability policy limits of the underinsured negligent driver, you will be eligible to collect uninsured/underinsured (UM/UIM) benefits from your own policy PROVIDED THAT your UM/UIM coverage is more than the at-fault driver’s Liability policy (for accident occurring before January 1, 2008). For policies issued or renewed after January 1, 2008, your UM/UIM coverage will “stack” on top of the at-fault driver’s liability coverage. Therefore, in order to protect yourself against underinsured drivers, it is important to purchase ample Liability coverage and an equal amount of UM/UIM coverage. (Click here to see UNINSURED AND UNDERINSURED MOTORIST COVERAGE.)
THE HAZARDS OF NOT HAVING CAR INSURANCE
Do you need car insurance? YES! You could end up in jail and/or owing an injured person a lot of money if you don't carry insurance. Also, failure to carry insurance could affect your ability to drive and to recover damages from some other driver who was at fault in creating your injuries.
CRIMINAL PENALTIES - Under Colorado Law, the minimum penalty for a first offense for not having insurance is a $100.00 fine or 10 days in jail, or both. Also, a conviction would result in four points being assessed against your driver's license, and you could be ordered to perform useful public service. Although the Southern Ute Indian Tribe does not have a mandatory insurance law, when Tribal members drive off the reservation, or within the town limits of Ignacio, they would be subject to this law. On the Ute Mountain Ute Reservation, the federal code adopts the Colorado Laws which require car insurance.
CIVIL LIABILITY - In addition to criminal penalties, driving without insurance can subject the driver or owner of a car to civil liability if involved in an accident. A money judgment could be rendered against you by a court for the amount of personal injury damages and property damages incurred by another person where you are at fault. If you have insurance, of course, your insurance will pay for most, if not all, of these damages.
SUSPENSION OF DRIVER'S LICENSE - Also, where an uninsured driver is at fault in an accident, that driver's driver's license can be suspended until such time that the uninsured driver makes restitution to the victim. Then, after restitution, the driver will be required to provide proof of insurance for a period of three years in order to maintain his drivers license.
INJURIES CAUSED BY UNINSURED DRIVERS - Finally, what happens if you are injured by the careless actions of an uninsured driver? If you are insured and have uninsured motorist (UM) coverage, you can collect all of your damages against your own insurance company (up to policy limits). However, if you elected not to carry UM coverage, your claim for damages against the uninsured driver is often not collectable because the uninsured driver often does not have sufficient assets to make it worthwhile to pursue the claim. UM coverage is relatively inexpensive and well worth the modest premium.
In sum, the law requires that drivers and owners have car insurance, and it makes good practical sense to carry ample insurance coverage.
RECOMMENDED LEVELS OF COVERAGE
Buy at least
a 100/300 LIABILITY policy. If you have significant assets, you
should protect yourself with a 250/500 LIABILITY policy or a combined
single limit policy of at least $500,000, and consideration should be
given to purchasing an umbrella policy as well. In other words,
buy as much Liability coverage as you can afford. Shop around, as some companies only offer minimum liability protection.
Increase your Uninsured/Underinsured coverage to match your Liability limits. This is your protection if you are injured by a careless driver.
If
you have health insurance, purchase enough Med Pay to cover your
deductible and co-pays. If you cannot afford health insurance,
remember that Med-Pay only pays for injuries arising from auto
accidents and you should buy as much Med-Pay coverage as you can
afford. Again, shop around, Med-Pay coverage may range from
$5,000 to $25,000 or higher.
Purchase adequate levels of
property damage coverage such as Collision and Comprehensive.
Remember, Uninsured Motorists Property Damage (UMPD) is not necessary if you have Collision coverage.
If you are injured, contact:
Tim LaFrance
Attorney-at-Law
for a FREE CONSULTATION at:
(970) 259-3321
Or
Toll Free: (888) 878-9320
Our mailing and street address is:
150 East 9th Street, Suite
100, Durango, CO 81301
(Red Snapper Building—Street Level)
Or E-mail us at: attorney@lafrancelaw.com
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