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Colorado Car Insurance Basics

It's easy to purchase auto insurance in Colorado. Simply gather quotes, decide which company will give you the best coverage for your money, and buy your insurance. However, before you purchase any insurance, there are some Colorado auto insurance basics that you should know about. Being familiar with these will allow you to make sure your policy is compliant with state law and will help you determine how much coverage you want to purchase.

Colorado's Minimum Vehicle Insurance Requirements

Like most states, Colorado has minimal amounts of auto insurance that they require each driver to carry. This is to ensure, as much as possible, that every driver on CO's roads has the ability to assume financial responsibility for any accidents he or she may cause.

Colorado only requires liability insurance. This is automobile insurance that pays the cost of damages, medical bills, or a funeral for anything damaged and anyone injured or killed in an accident you cause. Even if you are an extremely safe driver, the state will require you to have these minimal amounts, just in case something extraordinary happens.

The first kind of liability insurance that Colorado requires is bodily injury liability. This insurance pays specifically for physical injuries or deaths sustained in an accident. It will not pay for the guilty driver's injuries, but for those of the people he has injured. In addition, it will often cover their lost wages and any pain and suffering monies they are due because of the accident.

Colorado state law requires that each motorist carry at least $25,000 worth of this type of insurance per person injured in an accident, and at least $50,000 per accident. This means that, if only one person is injured in the accident, the insurance will pay up to $25,000. However, if more than one person are injured, it will pay up to $50,000.

The second kind of liability insurance required in CO is property damage liability. This kind of insurance pays for damage to property as a result of an automobile accident. While this is usually used to cover damages to or replacement of a vehicle, it can also be used to cover damage to buildings, fences, signage, landscaping, or any other kind of property. This insurance does not cover the costs of the driver who is at fault, only those of innocent parties involved in the accident. The state requires that each driver carry at least $15,000 worth of this type of insurance.

In addition, Colorado requires all car insurance companies to offer at least $5,000 worth of medical payments coverage for each policy that it sells. This type of vehicle insurance covers medical payments for the insured driver, and pays whether or not he is at fault in the accident. As of January 1, 2009, $5,000 is the minimum amount in which this insurance can be purchased and all customers choosing to decline the coverage must do so in writing.

Colorado also requires all auto insurance companies to offer drivers uninsured/underinsured motorist coverage with each policy. This insurance is usually purchased with the same minimums as the driver carries in liability coverage. It covers a driver when he or she is in an accident that is caused by a driver who either does not carry insurance or does not carry enough insurance meet the state's minimums and/or cover the damage done in the accident. Again, any Colorado driver choosing to decline this coverage must do so in writing.

Finally, Colorado requires all drivers to follow any insurance requirements made as a result of a vehicle lease or loan contract. Since the vehicle in question is either owned by another party or collateral for a loan, its owner or the lender can require you to carry insurance above and beyond the state's minimums so that their interests are protected in case something happens. Usually, these companies requires some sort of physical damage insurance, like collision or comprehensive, to satisfy their concerns.

Colorado will honor these contracts, so make sure you follow them and purchase the correct types of insurance in the correct amounts. If you do not, the insurance company can purchase insurance for you and bill you for the cost, revoke your lease or rescind your loan, and cause other problems for you.

Note that you may be eligible for an exemption from these auto insurance requirements if you are a member of the military serving somewhere else or are living out of state seasonally or for another short period of time but maintaining your Colorado residency. There are forms you have to fill out to apply for this, as well as special conditions that must be in place. Contact the Colorado Department of Motor Vehicles for more information.

Other Colorado Auto Insurance Basics

Having proof of your insurance coverage is important in Colorado. Usually, this takes the form of a small card generated by your automobile insurance company. You must have this on your person or in your vehicle every time you drive.

If you are caught without proof of your insurance in Colorado, you will be subject to a hefty fine and points will be added to your driver's license, which is sure to cause your auto insurance premiums to go up. If you are caught without this proof a second time, you face an even higher fine and will automatically have your license suspended. The penalties only go up from there each time you're caught without your proof of insurance.

In addition, you must have proof of your insurance to register your vehicle or renew your registration in Colorado. Your proof must match that provided by your insurance company, which is required to notify the state at least once a month of all policy changes it has made. It specifically notifies them of lapsed policies and policies that have slipped below the minimum required amounts of insurance. If your proof does not match the information that the state has from your insurance company, you will not be able to register your vehicle.

Note that, in Colorado, you are not required to carry auto insurance on any vehicle that is not registered and do not plan to operate. But as soon as you plan to drive the vehicle again, you must insure it.

It's important for all drivers to know that Colorado is a tort state. This means that someone is determined to be at fault in every accident and that person or their insurance company is responsible to pay for any damages to other vehicles, property, physical injury, or deaths caused by the accident. This is a fairly recent change, as the state used to be no-fault. Thus, if you owned insurance in Colorado before but left, you might find yourself in a different situation this time around.

Now that you're familiar with these Colorado auto insurance basics, purchasing insurance in the state will be even easier because you have the knowledge necessary to make intelligent decisions about coverage for you and your family. Before you put down any money, make sure you're getting insurance in at least these minimal amounts, so you can drive safely and legally on Colorado's roads.



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