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Colorado Car Insurance Requirements

Colorado car insurance requirements are the regulations put into place by the state government regarding the policies state drivers must carry. Every motorist in the state of CO must be insured according to state law. Liability protection is required for all auto owners, and many other forms of coverage are available to round out the policies of state drivers. If you are a motorist in the state, it is good to be familiar with the mandatory areas of protection all drivers must include in their policies so that you can be sure your plan is in compliance. And it's helpful to be familiar with optional protection available so that you can make intelligent choices on what to include in your plan based on your priorities and budget.

Split vs. Single Limit Liability

Every driver in the state must include liability insurance in their auto policies, even policies like truck driver auto insurance. Liability plans are available in split and single limit formats. Unlike a lot of states that endorse only one option or the other, the state government lets Colorado drivers decide. There are advantages and disadvantages to both, and the final decision rests with individual drivers.

Split limit policies are more common across the country than are single limit plans. These policies essentially divide the liability portion of your auto insurance into three different categories: bodily injury single victim, bodily injury single accident, and property damage single accident. The single victim bodily injury coverage is only used when only one injured party makes a claim against the negligent driver's insurance policy. If there are multiple injuries requiring medical attention, the other bodily injury portion is used. This is an example of the difference between split and single limit plans. In a single limit policy, there is only one limit of coverage and only one deductible. All costs of an accident are paid out of one fund until that fund runs out.

Split limit policies also devote a separate portion for property damage. Again, this is in contrast with single limit plans. The fact that all monies are accessible for every accident regardless of loss type makes single limit plans preferable because it is easier to access the coverage and there is no waste. But split limit policies are cheaper because of the fact that insurance companies tend to pay out less for average accident expenses on these plans. So drivers in Colorado have to decide whether their main priority is savings or coverage.

The minimum limits of liability coverage for a split limit policy in CO are 25/50/15. The first number represents in thousands the minimum acceptable limits for single victim bodily injury, the second single accident bodily injury and the third single accident property damage. The biggest possible payout on these minimum policies is $65,000, the total of the multiple victim bodily injury and per accident property damage limits. This is also the minimum state mandated limit of coverage for single limit liability plans [1].

Colorado Auto Collision and Comprehensive

Collision and comprehensive car insurance are not required by state law, although insurers are required to offer it to drivers when presenting them with a policy proposal. Lenders typically require borrowers to carry these modes of coverage on leased and financed vehicles; so, many motorists are compelled to include collision and comprehensive regardless of the law making it optional. Collision coverage handles property losses to vehicles that come about as a result of accidents. Comprehensive plans handle any other property losses to the covered vehicle, including deer hits, falling trees and other so called "acts of nature".

Optional Colorado Auto Insurance Endorsements

Medical payments and uninsured/underinsured motorist coverage are not required by law, but auto insurance companies selling policies in the state are required to offer these policies to all subscribers. Medical payments coverage provides financial compensation to cover the costs of various expenses related to medical issues stemming from accidents, regardless of fault. These expenses might include rehabilitation and things of that nature as well as hospital bills. Uninsured and underinsured policies provide the coverage that covers expenses normally taken care of by the at fault driver in situations where that driver does not carry any automobile liability insurance at the time of the accident, or the insurance policy of the negligent driver is not enough to handle all expenses.  These optional endorsements are important to factor in when looking for a cheap auto insurance rate.

Motorists in the Rocky Mountain State have many choices when it comes to their auto policies. There are multiple well qualified companies selling policies to local residents, and comparison shoppers can get great deals by soliciting quotes for coverage online. With so many options and not very many restrictions from Colorado insurance law hemming them in on these choices, state drivers have a great deal of freedom to frame their policies in whatever way suits them, depending on preferences and priorities.

[1] http://www.dora.state.co.us/insurance/pb/supporting documents/autoins04.pdf Retrieved 2010-06-08.

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