Most states, including Colorado, require all drivers to carry at least a minimum amount of liability coverage for their automobiles before they can drive legally and obtain registration. In Colorado, drivers must carry a minimum of $15,000 in property damage liability coverage per accident. Property damage liability coverage provides compensation for damage an accident causes to someone else’s property when you are at fault for an accident.
Drivers must also carry at least $25,000 worth of bodily injury liability insurance per person per accident and at least $50,000 in bodily injury liability insurance per accident. Bodily injury insurance coverage provides compensation for injuries you cause to other drivers or passengers when you are responsible for an accident.
Colorado does not require drivers to carry uninsured/underinsured motorist coverage, which is insurance that pays medical and property damage expenses when you are in an accident with a motorist who is not carrying the proper amount of insurance coverage, However, Colorado law does stipulate that all insurance companies must offer this type of insurance to motorists in the same coverage amount as their bodily injury liability insurance. Drivers can only waive this option if they reject it in writing.
Colorado requires drivers to show proof of their auto insurance coverage when they apply for new registration or renew their existing registration for a vehicle. Motorists who do not possess the proper coverage will be denied registration. Motorists who are found to be driving without proper insurance coverage may have the registration for their vehicle suspended.
Though Colorado requires minimum amounts of coverage for each vehicle, drivers can choose to purchase more insurance coverage for their vehicles. Leased vehicles in Colorado may require higher amounts of coverage. In addition, vehicles that are being financed by a third party will often require coverage amounts that are higher than the state’s minimum limits. If a driver is in an accident and causes damages or injuries that are not covered under his automobile insurance policy, the injured party can file a lawsuit against him to receive compensation for the amount that is not covered.