Colorado Auto Insurance
Car insurance is not just a smart purchase in Colorado; it is a requirement. When you own a vehicle and drive it around the state, you must be prepared for the possibility of having an accident. Colorado's mandatory auto insurance laws are in place to ensure that if something were to happen to a third-party, you would have the finances to pay for the damages.
Aside from being a mandatory requirement in Colorado, insurance is important because it protects your assets. As a result, all consumers in the state who are shopping for coverage need to understand the insurance requirements and the types of coverage available in Colorado.
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If you are preparing to purchase auto insurance in Colorado, read this guide to learn about the state requirements and coverage types, as well as tips for saving money.
How much insurance are you required to have in Colorado?
Because auto insurance laws vary from state to state, it is important to understand the specific laws within your state. If you are registering your vehicle with the Department of Motor Vehicles in Colorado, you must buy car insurance from a company that is licensed by the Division of Insurance in order to prevent vehicle impoundment and fines.
Additionally, you must buy automobile liability insurance. Liability insurance consists of both bodily injury (BI) and property damage (PD), both of which will pay third parties for damages that you cause in a state that operates under tort law.
Bodily Injury
BI liability provides you with financial protection when you are responsible for an accident in which someone is hurt or killed due to the collision. The coverage will also pay the third party if someone in your household or someone you permitted to drive causes an accident while driving a vehicle listed in your name.
Because it is third-party coverage, BI liability will not provide coverage for injuries that you or those in your household sustain in the accident.
Colorado state law requires you to have $25,000 per person and up to $50,000 per accident in BI liability coverage.
Property Damage
PD liability provides financial protection if you are responsible for damages to property that you do not own. The real property can be anything from a sports car to an iron fence as long as you do not possess ownership. PD liability will also pay to repair utility poles, buildings, and other public property.
The state law in Colorado requires you to have no less than $15,000 per accident in PD liability.
Medical Payments
As of January of 2009, all insurers in Colorado must include medical payments coverage on all insurance policies so that clients have some sort of medical protection.
Medical payments is a unique type of coverage in a tort state because it pays even when fault has not been established. It will pay for your medical expenses as well as the expenses incurred by passengers in your car or household members who are pedestrians.
While medical payments is a requirement, it is the one requirement that can be rejected in writing if you feel that you do not need it. Be sure to check your medical insurance deductibles and stipulations before you decide you have no need for a no-fault benefit.
What type of insurance do you need if your vehicle is financed?
State officials mandate the coverage that is required for all drivers, but drivers who have a contract with a lessor or lender may be obligated to purchase additional coverage to protect the vehicle.
Many people think that buying required coverage options protects them, but that is not the case. Requirements help you pay for damages that you cause, but it does not help with damages that you sustain. Without adding supplemental options, you will be left to pick up the pieces by yourself.
Lenders and lessors have an interest in your vehicle the moment you sign a contract. Most finance companies require you to buy comprehensive and collision coverage so that the vehicle will be repaired when a covered loss happens.
Comprehensive pays for losses when the cause of the loss is fire, theft, vandalism, glass breakage, hail, wind, falling objects, and other non-moving perils. Collision pays for damages to your car when it collides with another object.
Typically, you pay your deductible for collision unless you are not at-fault. You will always pay your comprehensive deductible unless the company has a glass breakage waiver for windshield repairs.
What other types of protection can you buy?
There are also coverage options that can protect your wallet if you have a loss. After an accident, you may have to pay for a replacement vehicle if you do not have a spare vehicle or for towing when your car is damaged on the side of the road. To avoid these expenses, you can purchase towing and rental car coverage.
It is also in your best interest to consider buying additional protection to help you pay for your medical expenses if an uninsured driver hits you. Did you know that 16.2 percent of drivers in the Centennial State do not have insurance? Almost 600,000 people drive their cars with no intentions of paying for damages that they cause.
Luckily, you can buy uninsured motorist protection to fill in the coverage gaps. The coverage will pay for your medical expenses up to the limits that you select.
You may also be able to add uninsured motorist property damage, which will pay for your deductible or a small amount of repairs if you do not carry full coverage. If you do not have this protection, you must pay your deductible or the damage out-of-pocket.
How can you save money on Colorado auto insurance?
Saving money is at the forefront of most consumers' priority lists. If you are shopping for an important product like auto insurance, you do not want to skimp, but you also do not want to spend a fortune on coverage you hope never to use.
There are ways to save without automatically checking the liability-only box. You need to be resourceful and learn about ways to lower your base rate.
The following are some money-saving tips that many people are not aware of:
– Price Before You Buy
You should not buy a new or used vehicle before you know how much insurance is going to cost on that vehicle. One of the biggest rating factors an insurer uses to price the cost of coverage is the safety record of the car. Use the year, make, and model to price the cost of insurance before you make any offers on a car.
– Buy Home and Auto Together
Just as auto insurance is important, property insurance is important as well. If you own or rent a home, you need to cover your belongings.
The best decision is to buy auto insurance from the same carrier that provides your home insurance. In most cases, you will get a multi-line discount on both policies.
– Take Driver Education
Driver education teaches you how to drive safely in various conditions and terrains. If you want to receive a discount on your auto insurance rate, you can take an approved driver's education course for a day and save for three years. There are also special education courses for mature drivers over 55 and young drivers under 25, which are the categories where rates tend to be the highest.
– Shop Around
Not all insurance companies charge the same rates. In fact, rates can vary dramatically because some companies want a different customer base than others. Shopping around among the established companies is essential.
If you want to comparison shop without spending a great deal of time, use an online rate comparison tool. Get instant quotes from your home and make the choice that is right for you.
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