Quick quiz. If a driver with no insurance hits you, who pays your medical bills? If you said “that driver’s insurance company,” you can already see the problem. There is no insurance company to pay.
That is exactly what uninsured and underinsured motorist coverage is for. It is one of the most useful pieces of a Colorado auto policy and one of the least understood. Here is how it works, what Colorado law says about it, and how to find out what you actually have.
What UM and UIM actually cover
Uninsured motorist coverage, or UM, applies when the person who caused the crash has no insurance at all. Depending on your policy language, it can also come into play in a hit and run, when the driver cannot be identified. If that is what happened to you, our guide to hit and run accidents in Colorado Springs covers the steps to take.
Underinsured motorist coverage, or UIM, applies when the at-fault driver has insurance, but not enough. Colorado’s minimum liability limits are modest, and a serious injury can blow past them quickly.
A simple example
Say you are rear-ended on your way home and you end up with a broken wrist, weeks off work, and physical therapy. Your medical bills and lost income add up to well over what the other driver’s policy can pay. If that driver carries only the state minimum of $25,000 for bodily injury per person, their insurer pays up to that limit and stops. UIM coverage on your own policy can help cover the gap between what their policy pays and what you actually lost, up to your UIM limit.
Now picture the same crash with a driver who has no insurance at all. Without UM coverage, you would be left chasing a person who may have no money and no assets. With it, you have a policy you already paid for.
What Colorado law requires
Insurance companies in Colorado must offer UM and UIM coverage with limits equal to the bodily injury liability limits you choose. They only have to offer it, not force it on you. If you decide to turn it down, the rejection has to be in writing. If you never signed a rejection, you may have more coverage than you realize.
Why people skip it, and why that is a gamble
It adds to the premium, and nobody loves paying for something they hope never to use. But the math looks different after a crash. If you or a family member ends up with a serious injury and the other driver has little or no coverage, your own policy may be the only money on the table. The extra cost is often small next to what it protects.
It also matters beyond driving. Depending on the policy, UM and UIM coverage may apply to you as a passenger, a pedestrian, or a cyclist hit by a car, and to family members on your policy. That is a lot of protection for something many people never think about until they need it.
How to check your own policy
You do not need a law degree for this. Pull out your declarations page and look for these things:
- A line for uninsured or underinsured motorist bodily injury coverage
- How the limit compares with your liability limits
- Whether you ever signed a written rejection of the coverage
- Whether you also carry medical payments coverage and collision coverage
If anything is unclear, call your agent and ask. It is a five minute conversation that can matter a lot later. If you want to raise your limits, ask for a quote. Many people are surprised at how little it costs to move up a tier.
Common myths about UM and UIM
A few ideas float around that can leave people underprotected:
- “The other driver’s insurance will cover everything.” It only pays up to that driver’s limits, and the minimum limits in Colorado are not much when someone is seriously hurt.
- “UM only matters if the other driver has no insurance.” That is UM. UIM covers the situation where the other driver has insurance, but not enough.
- “My health insurance will take care of it all.” Health insurance may pay medical bills, but it does not cover lost income or pain and suffering, and it may want to be repaid out of any settlement.
- “I am covered at whatever level I want automatically.” Your limits are whatever you chose, and a signed rejection means you may have no UM or UIM at all.
Questions to ask your agent
If you have not looked at your policy in a while, here is a short list to bring to the call:
- What are my UM and UIM limits, and how do they compare to my liability limits?
- Did I ever sign a rejection of either coverage?
- Does my coverage apply when I am a passenger, a pedestrian, or on a bike?
- Do I have medical payments coverage, and how does it work with UM and UIM?
- What notice does my policy require after a crash, and by when?
- What would it cost to raise my limits?
How a UM or UIM claim really works
Here is the part that surprises people. When you make a UM or UIM claim, you are making it against your own insurance company. They are on your side when you pay premiums and across the table when you ask them to pay a claim. They still review your medical records, question your treatment, and negotiate the amount. If you have ever wondered why insurance companies try to minimize your claim, this is a good example of it happening with a company you already pay.
UIM claims have an extra wrinkle. Your policy may require you to tell your insurer before you settle with the at-fault driver, or give them a chance to weigh in. Settle the wrong way and you could put your UIM benefits at risk. Talk to your insurer or an attorney before you sign anything with the other driver’s insurance company.
What if your insurer drags its feet?
Insurers owe their customers a duty to handle claims fairly, and that includes UM and UIM claims. If your insurer is stalling, lowballing without explanation, or asking for the same documents again and again, read our post on what to do if your insurance company is stalling. Delays and unfair denials can be signs of bad faith.
What UM and UIM can help pay for
The exact coverage depends on your policy, but UM and UIM claims generally track what you could recover from the at-fault driver if they had enough insurance. That can include medical bills, lost income, and pain and suffering. Our overview of compensation you can recover after a car accident explains the categories in plain language.
Mind the deadlines
Your policy has its own notice requirements, and the deadline to sue the at-fault driver for a car crash is generally three years in Colorado. Report the crash early and keep copies of everything, including emails and letters from the insurer.
If you were injured by an uninsured or underinsured driver in Colorado Springs, Rector Stuzynski Law Firm can look at your policy, explain what coverage may apply, and talk through next steps.
This article is general information, not legal advice, and every case is different.
Frequently Asked Questions
What is the difference between uninsured and underinsured motorist coverage?
Uninsured motorist coverage applies when the at-fault driver has no insurance. Underinsured motorist coverage applies when that driver has insurance, but the limits are too low to cover your losses.
Does Colorado require me to carry UM and UIM coverage?
Insurers must offer it, but you can turn it down. If you reject it, the rejection has to be in writing.
How do I know if I have UM or UIM coverage?
Check the declarations page of your auto policy or call your agent. Look for uninsured or underinsured motorist bodily injury coverage and compare the limit to your liability limits.
Does UM or UIM coverage apply if I was a passenger, cyclist, or pedestrian?
It often can, depending on the policy. Coverage may follow you and your household members even when you are not driving, so it is worth checking the policy language.
Will my rates go up if I make a UM claim?
That depends on your insurer and your situation, so ask your agent. Policies and practices vary, and being not at fault is a common factor in how these claims are treated.
Should I talk to a lawyer before settling with the other driver?
If you may have a UIM claim, yes. Your policy may require notice before you settle, and settling the wrong way can put your UIM benefits at risk.
