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Auto Insurance for Colorado Drivers

In the state of Colorado as with virtually every other area of the country, auto insurance is required by state law. Drivers in the state are compelled to abide by financial responsibility standards set forth by requirements put into place by the state legislature. Auto liability insurance is required of all drivers. Liability insurance takes care of the property damage and bodily injury expenses incurred by other parties involved in an accident for which the insured driver is held responsible. Having an adequate liability auto policy safeguards a driver from having to directly bear these expenses, costs that can sometimes reach many thousands of dollars.

CO Auto Liability Insurance

In many states, liability auto insurance is available in split or single limit form, but usually not both. In the state of Colorado, however, drivers can choose either one of the two basic options for their liability coverage. To begin with, it is useful to explain the components of a split limit auto policy. It contains the same areas of coverage found in a single limit policy, but divides them up into component parts each with its own limit of coverage and deductible.

Split limit auto insurance policies have three parts. The first two are devoted to bodily injury liability expenses, and the third is set aside for dealing with property damage liability costs. It is important to note that liability protection is always earmarked for paying the costs borne by other Colorado drivers and passengers, and never the expenses incurred in the covered vehicle itself. Liability policies only pay the expenses of the other drivers and not the covered driver.

Advantages of Single Limit Policies

Single limit policies cover the same types of expenses, but provide drivers with only one pool of available financial coverage. This difference is important in two ways. First, it allows drivers to respond to at fault accidents by only paying one deductible instead of three. And second, it is much easier for drivers to get the best out of their maximum coverage limit because there is only one kitty set aside, so they can draw from it as needed to take care of any of the three areas in any proportion to one another. By contrast, split limit plans have a separate deductible and separate coverage limits for each of the three areas.

Of course, it must also be pointed out that single limit plans cost more for consumers to purchase. A Colorado driver purchasing a state minimum liability split limit policy will spend less than that same driver would to get a single limit policy with the same minimum coverage limit. The single deductible and the ease with which drivers can access all available funds means insurers pay out more for accidents with these policies even though the limits are the same between the two.

Minimum CO Liability Insurance Limits

In the state of Colorado, the minimum combination of coverage for a split limit auto insurance liability policy is 25/50/15, with each number representing in thousands of dollars the minimum required coverage for each of the three parts of a policy. The numbers in order are the minimum limits for bodily injury single victim, bodily injury multiple victim, and property damage. Single limit policies, therefore, must be at least $65,000 in value [1]. An accident with multiple victims would only use the multiple victim bodily injury coverage and not the single victim coverage, so $65,000 makes these plans equivalent in their maximum value to split limit policies.

The state of Colorado does not require motorists to be covered with comprehensive or collision insurance. However, insurers are required to offer collision policies to their policy holders. When drivers borrow money toward the purchase of an automobile, they are generally required by lien holders to include collision and comprehensive insurance until the loan is paid off. This protects the lender's investment in the vehicle while it is still being financed.

Medical payments and uninsured/underinsured motorist protection are not required in Colorado as they are in some states, but insurers are required by law to offer uninsured/underinsured motorist policies to drivers in an amount equal to the drivers' bodily injury liability policies or $100,000 per person and $300,000 per accident, whichever is the lesser of the two amounts [1]. Lessees in CO and elsewhere around the country are often required to carry auto insurance in excess of state requirements, whether it includes additional liability insurance or collision and comprehensive coverage.

Motorists in the state of Colorado have many choices when it comes to their auto insurance plans. There is very little specifically mandated, but many options available according to state law. Motorists must make their choices based on their own preferences and the constraints of their individual family finances.

[1] documents/autoins04.pdf Retrieved 2010-05-14.



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