The Driver Who Hit You Carried $25,000. Your Own Policy May Be Holding Several Times That.
Colorado requires very little liability insurance. The state minimum is $25,000 for bodily injury to one person and $50,000 per accident. A single ambulance ride, an emergency room workup, and an MRI can consume most of that before anyone has discussed a surgery or a missed month of work.
So the practical question after a serious crash is rarely whether the at fault driver was negligent. It is whether there is anything to collect. And the answer frequently sits in a policy people forget they own, in coverage they may have more of than they think.
Uninsured and underinsured motorist coverage is the part of your own auto policy that responds when the person who hit you carried nothing, fled, or carried a limit too small to matter. Colorado law shapes how that coverage behaves in ways that favor policyholders more than most people realize, and in ways insurers do not always volunteer.
You Probably Have It Even If You Do Not Remember Buying It
Colorado does not require UM or UIM coverage. It does require every auto insurer in the state to offer it, in an amount equal to your bodily injury liability limits, and it requires that any rejection be made in writing by the named insured.
That written rejection requirement does real work. If nobody ever signed a valid rejection, the coverage is generally in the policy regardless of what you remember discussing at the time you bought it. Rejection forms that were never signed, or were signed by the wrong person, or were buried in a stack without the required language, get scrutinized closely for that reason.
There is a limit to that argument. The Colorado Supreme Court has held that an agent acting with apparent or implied authority can reject the coverage on a principal’s behalf, so a rejection signed by someone you asked to handle the purchase may bind you. But the starting assumption should be that the coverage exists until the rejection is examined, not the reverse.
One more feature worth knowing. Under the statute, buying uninsured motorist coverage brings underinsured motorist coverage with it automatically. They are not separately purchasable products in Colorado. If you have one, you have both. Our page on uninsured and underinsured motorist claims in Colorado covers how the two coverages differ in application.
The Setoff Rule Is the Provision That Changed Everything
For years, Colorado insurers reduced UIM payments by whatever the at fault driver’s carrier had already paid. If you carried $100,000 in UIM and collected $25,000 from the other driver, your carrier treated its exposure as $75,000. The coverage you had purchased was effectively being spent by somebody else’s policy.
The legislature ended that. C.R.S. 10-4-609 now provides that the amount of coverage available under the section shall not be reduced by a setoff from any other coverage, including legal liability insurance, medical payments coverage, health insurance, or other uninsured or underinsured motorist insurance. The change took effect on January 1, 2008, and the statutory text is available through FindLaw’s copy of section 10-4-609.
Read that list again, because the breadth is the point. Not just the other driver’s liability coverage. Your own medical payments coverage does not reduce it. Your health insurance does not reduce it. Other UM or UIM coverage does not reduce it.
In the example above, the post 2008 answer is that you collect $25,000 from the at fault carrier and your $100,000 of UIM sits on top of it rather than absorbing it. That is a $25,000 swing on a modest policy and a much larger one on a serious claim.
Stacking Is a Genuinely Fact Specific Question
Stacking means combining the UM or UIM limits from more than one vehicle or more than one policy to create a larger pool. It is the part of this subject that generates the most confident and least reliable writing online, so it is worth being precise about what the statute actually permits.
The statute says that a single policy or endorsement for uninsured or underinsured motor vehicle coverage issued for a single premium covering multiple vehicles may be limited to applying once per accident. That is a conditional sentence and the condition is the premium structure. Where one premium covers several vehicles, the insurer may restrict the coverage to applying once. Where separate premiums were charged for separate vehicles, the analysis is different, and anti stacking language becomes considerably harder for the carrier to enforce.
Colorado case law has also drawn a distinction between policies issued to you and policies that merely cover you. Anti stacking provisions in a policy issued to you or a resident relative operate differently from limits under a wholly separate policy from an unrelated insurer that happens to cover you as an additional insured.
What all of that means practically is that nobody can tell you whether stacking applies to your crash without reading the declarations pages. Not the summary page, the declarations, showing how premiums were allocated across vehicles. Two households with the same nominal limits can have very different answers depending on how their policies were written. Our page on stacking uninsured motorist coverage in Colorado works through the scenarios in more detail.
Look Beyond the Car You Were Driving
The instinct after a crash is to think about the policy on the vehicle involved. That is one policy among several that may respond.
Consider the policy on every vehicle in your household, since resident relative provisions frequently extend coverage across them. Consider the policy of the vehicle owner if you were driving someone else’s car. Consider the policy of the driver if you were a passenger. Consider whether you carry an umbrella policy, since some umbrellas include UM and UIM coverage and most people who own one have never checked. Consider a commercial policy if the vehicle was being used for work.
The exercise is unglamorous. It amounts to collecting every declarations page anyone in the household can find and reading all of them. It is also the step that most often changes what a claim is worth, and it costs nothing but an afternoon.
If you cannot locate a policy or the carrier is slow to produce a certified copy, the Colorado Division of Insurance can answer coverage questions and take a complaint if an insurer will not produce documents you are entitled to. That is a free channel most people never use, and it occasionally resolves in a week what a phone tree has been failing to resolve for a month.
Be careful about one shortcut in particular. Adjusters sometimes summarize your coverage over the phone and people take that summary as settled. Verbal descriptions of coverage are not reliable and they are not binding. Ask for the declarations page and the full policy in writing, including any UM and UIM endorsements, and read the endorsements rather than the summary. Endorsements are where the anti stacking language usually lives, and a summary that says nothing about stacking is not evidence that the endorsement says nothing about it either.
Settling With the Other Driver Too Fast Can Cost You the UIM Claim
This is where an otherwise strong claim gets damaged by a decision made in the first month.
Most UM and UIM policies contain consent and subrogation provisions. Your carrier, having paid you, wants the right to pursue the at fault driver. If you settle with that driver and sign a release without your own carrier’s consent, you may have destroyed the subrogation right your policy required you to protect. Carriers do assert this.
The rule of thumb is simple and worth following even when the liability settlement looks obviously correct. Notify your own carrier in writing before you accept anything from the other driver’s insurer, and get the consent question resolved before you sign a release. A limits tender that seems like an easy decision in month one can become the reason a six figure UIM claim gets denied in month nine.
Your Carrier Becomes an Adversary the Day You Make the Claim
There is an emotional adjustment in a UIM claim that catches people off guard. You have been a customer for a decade. Now you are asking the company to write a check, and the file gets handled the way any adversarial claim gets handled.
Expect a request for a recorded statement. Expect an independent medical examination. Expect a close reading of your medical history for anything that can be characterized as pre existing. None of that is improper on its own. It is the ordinary shape of a first party claim.
What is not ordinary, and what Colorado law addresses separately, is unreasonable delay or denial of a covered benefit. If the handling crosses that line, the statutory remedies for first party claims come into play and they are substantial. That is a different analysis from the coverage question, but the two often arrive in the same file.
Have Someone Read the Policy Before You Sign
Most of the value in a serious underinsured motorist claim is decided by paperwork nobody reads until it is too late. Todd Travis and Jordan Travis go through declarations pages, endorsements, and rejection forms looking for coverage clients did not know they had. Before you accept a limits tender from the other driver, or sign anything a carrier puts in front of you, talk to our Castle Rock office first.
