GUIDE TO COLORADO MOTORCYCLE INSURANCE
Colorado's minimum insurance required for your motorcycle is called "Compulsory Liability Insurance." That breaks down to every rider needing at least Bodily Injury Liability insurance of $25,000 per person and $50,000 per accident and Property Damage Liability insurance of $15,000.
WHY YOU NEED UIM COVERAGE!
Every rider should also carry UIM coverage. UIM Coverage is "Uninsured, or under-insured, motorist coverage." This insurance offers additional protection to riders. Uninsured Motorist Coverage protect you if you are injured and the at-fault driver does not have any insurance to pay for your resulting injuries. While, Under-insured Motorist Coverage protects you if you are injured and the at-fault driver does not have enough insurance to pay for your resulting injuries. Furthermore, UIM is crucial for coverage in tragic Hit & Run scenarios.
WHY YOU NEED MEDPAY COVERAGE!
Medpay insurance is personal insurance that specifically covers the cost of the medical care sought as a result of an accident. The relatively small premium charged is well worth the security of having your medical bills paid up to the amount of coverage you choose.
INFORMATION REGARDING UIM COVERAGE!
Changes to Colorado Insurance Law: Consumers Receive the Coverage They Pay For When Injured by Uninsured Drivers
C.R.S. 10-4-609 addresses UM/UIM claims and makes it possible for consumers to receive the full coverage they believed they were purchasing when buying their UM/UIM coverage in the State of Colorado. All UM/UIM policies issued or renewed in Colorado on or after January 1, 2008, are subject to the newly revised statute. Please take note of the two most important changes to the law:
1. Before January 1, 2008, your insurance company was allowed to “offset” the amount paid by the at-fault driver’s insurance company against the amount available under your own UM policy.
What is “Setoff”?
Before January 1, 2008, your own insurance company was allowed to reduce (“setoff”) the UM coverage they would have to pay you by the amount of liability insurance available under the at-fault driver’s insurance policy.
Example: Charlie was driving home from work and was hit by Wayne, who had been out all night drinking with his buddies. Wayne’s blood alcohol level was above the legal limit and he was cited for driving under the influence. Charlie was severely injured, unable to work during his recovery, and had medical expenses and lost wages totaling $150,000. Wayne had insurance but his bodily injury liability policy limit was only $50,000. Charlie had purchased $100,000 in UM/UIM coverage on his own policy.
Outcome Before January 1, 2008: After Wayne’s insurance company paid Charlie Wayne’s policy limits in the amount of $50,000, Charlie’s insurance company would then have been able to deduct or “setoff” the $50,000 payment from Wayne's UM/UIM coverage, leaving Charlie with only an additional $50,000 in coverage. His total compensation would have been $100,000. Charlie would have been left to pay the remaining $50,000 out of his own pocket.
Outcome After January 1, 2008: Wayne’s insurance company paid Charlie Wayne’s policy limits in the amount of $50,000. Charlie’s insurance company is now legally obligated to pay the total of Charlie's UM/UIM policy limits of $100,000. Charlie’s total compensation under the new law would be $150,000, which would cover all of his medical expenses and lost wages.
2. Before January 1, 2008, insurance companies could include “anti-stacking” clauses in their UM policies, which kept those who purchased multiple policies on multiple cars within the same household from obtaining UM coverage on each separate policy to maximize potential coverage.
What is “Anti-Stacking”?
An additional change in the law prevents insurance companies from using “anti-stacking” language when writing insurance policies. Before the new law became effective, insurance providers were able to collect premiums for UM/UIM coverage on multiple policies covering multiple vehicles in the same household. However, the insurance companies would not allow policy holders to simultaneously use these multiple coverages. Since the new law became effective on January 1, 2008, however, policy holders have been able to combine (“stack”) UM/UIM policies.
Colorado Uninsured Motorist Law in a Nutshell
Before January 1, 2008:
- Insurance companies were allowed to set-off the amount paid under the at-fault party’s BI liability insurance against the insured’s UM/UIM liability coverage.
- Insurance companies could include “anti-stacking” clauses in their policies.
After January 1, 2008: (Applies to policies issued or renewed in CO on/before this date)
- Insurance companies are not allowed to set-off the amount paid under the at-fault party’s BI liability insurance against the insured’s UM/UIM liability coverage, allowing for potentially higher recoveries.
- Insurance companies cannot include “anti-stacking” clauses in their policies. If your insurance agent informs you that you may be able to save money by dropping additional premiums for your multiple vehicles, know that you may also limit your coverage and your insurance company’s UM/UIM liability in the event that you are involved in an accident.