What is uninsured or underinsured coverage?

Most people may carry vehicle insurance, but they don’t understand what it is. Uninsured Motorist (UM) or Underinsured Motorist (UIM) coverage is special insurance coverage on your own car policy that can protect you when the other driver is either uninsured or underinsured.

Required insurance coverage in Colorado

Basically, your “bodily injury” (BI) liability coverage pays for the injuries and medical bills of other drivers, while UM / UIM coverage pays for your own injuries and medical bills. Colorado law requires that you carry at least $25,000 in BI coverage to pay for the injuries of other drivers, but does not require UM / UIM coverage if you reject it in writing.

Recommended coverage for Colorado drivers

It makes very little sense to carry BI liability coverage which pays for other people’s injuries but not carry some type of coverage that pays for your own injuries. That is why we strongly recommend that all our clients carry at least $50,000 - preferably more if you can afford it - of UM / UIM insurance coverage on your car policy at all times. You may be surprised at how little it changes your monthly premiums, usually less than $10 per month, depending on how much UM / UIM coverage you want.

Your rates will not increase

Some people worry that if they try to make a claim for their UM / UIM coverage, their insurance rates will go up. This is not the case. If someone else makes a claim against your insurance because you are at fault for causing an accident, your rates may be raised.

However, if the accident was not your fault, your insurance company cannot raise your rates for simply using the insurance that you pay for.

Insurance companies must be fair about claims

Your own auto insurance must treat you reasonably and in good faith when you make a claim for your UM / UIM insurance benefits. If they act in bad faith, deny your rightful insurance benefits, or delay in paying your rightful insurance benefits, they may be liable to you for much more than just your policy benefits according to new Colorado laws.

Let an attorney protect your right to fair recovery

If your insurance company is not living up to their contractual expectations, you may need to speak with an attorney who will represent your right to a fair settlement. Gama Law Firm in Aurora, CO offers a free consultation for motorists who are not being treated fairly by their own insurance company.