Drivers in Colorado are required to carry a minimum amount of insurance to protect both themselves and other drivers from the high cost of a car accident. The state mandates liability insurance coverage to pay for injuries as well as for property that is damaged as the result of an accident.
Mandatory Insurance Coverage
Colorado state law requires that you have a basic level of coverage in the form of a liability insurance policy. This policy is designed to make sure all drivers are financially responsible for accidents in which they are found to be negligent and thus responsible for paying out damages to another driver and any injured passengers.
The law requires only that drivers carry a low level of liability, the limits of which may not be enough to cover all of the damages, especially in a serious accident. As a result, many drivers choose to carry much higher limits. The legal minimums for liability are:
- Bodily Injury Liability Coverage – $25,000 per person and $50,000 total per accident
- Property Damage Liability Coverage – $15,000 to pay for damage to another person’s vehicle or any other property that is damaged as the result of a car accident
In addition to liability, Colorado law also requires all insurance policies to include $5000 of medical payments coverage, or Med-Pay. Although this is considered a mandatory coverage, Colorado drivers can choose to opt out of having it on the policy, but must reject the coverage in writing. If the insurance company does not receive a written rejection, they must add Med-Pay to the policy.
Optional Insurance Coverage
Colorado drivers have many options to expand and improve their auto insurance coverage. In addition to increasing liability limits, which is highly recommended by most insurance companies, drivers can choose to further protect themselves from the high cost of collisions and other risks.
Insurance companies in Colorado can put together policy packages to meet each driver’s needs, from the following possible options, among others:
- Collision Coverage – Pays for damage to the policyholder’s vehicle in the event of an accident either involving another driver who is not at fault or a single-vehicle accident where there is no second driver and thus no other insurance company involved. Collision coverage is usually accompanied by a deductible, which the driver can select to help lower insurance rates.
- Comprehensive Coverage – Pays for damages or loss that occur as a result of any event other than a collision such as theft, vandalism, storm damage, or fire damage. This coverage often includes glass-only claims, and also has a deductible in most cases.
- Uninsured/Underinsured Motorist Coverage– Pays for damage caused by another driver who is either uninsured or whose insurance coverage is not sufficient to pay for the entire loss. These limits usually match the policy’s liability limits.
- Rental Reimbursement Coverage – Pays for a rental car during a covered claim.
- Towing and Labor Coverage – Pays for roadside assistance and towing to a repair show after a breakdown.
Proof of Insurance and Colorado Law
Colorado insurance companies report all policies to a state database, which will notify drivers if there is no policy on file matching the VIN of a registered vehicle. If a notice is received, the owner of the vehicle must respond immediately with insurance information in order to keep the vehicle registered and legal.
Although the electronic database is available to law enforcement, Colorado drivers are still required to carry proof of insurance at all times while driving. Police officers can write a ticket for failure to provide proof of insurance, and the driver may be required to appear in court.
Driving without insurance in Colorado is a serious offense for which penalties will increase with each violation:
- First violation carries a $500 fine and a license suspension until proof of insurance is provided
- Second violation carries a $1000 fine and a 4-month license suspension
- Third violation carries a $1000 fine and an 8-month license suspension
- Each violation results in 4 points against the driver’s license
- Up to 40 hours of community service may also be required
After a license suspension drivers must pay a $40 fee to reinstate the license, and will be required to provide an SR-22. This proof of financial responsibility document is filed by the insurance company on the driver’s behalf and must remain in force at all times. Lapse or cancellation of the insurance policy will result in further penalties.
Shopping for Car Insurance in Colorado
Car insurance rates in Colorado fall just above the national average, according to a 2015 Insure.com study of rates across the nation. At number 16, Colorado’s average rate for the study sample was $1393.
The Division of Insurance for the state provides sample rates for drivers to compare on their Auto Insurance Premiums Report, which allows drivers to select one of three sample coverage levels and four driver profiles in order to compare rates in several Colorado cities. This service can help Colorado drivers to compare insurance rates and determine what they can expect to pay for varying levels of insurance coverage.
Colorado insurance rates have seen a downturn over the past decade, likely as a result of the repeal of the no-fault insurance law in 2003. The decrease in rates was noted in 2007, a few years after the no-fault law was repealed.
Colorado allows the use of credit scores as one of the factors insurance companies can use to determine rates. Although credit can and does impact rates, things like driving history, type of vehicle, driver experience, and the vehicle’s use are all major factors that generally have a bigger impact on premiums.
High-Risk Drivers in Colorado
Although Colorado drivers pay rates near the national average, high-risk drivers are still likely to find rates extremely high. In some cases, individuals with poor driving records or major credit issues – or both – may find it very difficult to obtain an auto insurance policy.
Colorado’s Motor Vehicle Insurance Plan is in place to make sure that even the highest-risk drivers can obtain the insurance they require to legally drive. This program is an assigned risk system that will assign each driver who qualifies to a particular insurance company. The program is run through the Western Association of Auto Insurance Plans, a processing center that puts high-risk drivers in touch with insurance companies to provide a policy. Policies through this plan cannot be turned down, but are still very expensive.
Teen Driver Licensing
Colorado’s graduated licensing program takes teens through several stages during the process of obtaining a license. Each stage allows the teen driver to learn new skills and practice them within safety restrictions.
The requirements for the graduate licensing program depend on the age of the teen when first applying for a permit.
The learner’s permit allows teen drivers to start practicing behind the wheel. Teen drivers can obtain a permit as young as 15 years old, but there are requirements that must be met:
- For teens under 15 years and 6 months of age, a 30 hour driver’s education course is required prior to applying for a permit
- For teens over 15 years and 6 months of age, either a 30 hour driver’s education course or a 4-hour classroom driver awareness program must be completed to get a permit
- Teens 16 or over can apply for a permit without any prior requirements
When driving with a permit, regardless of age, the teen must have a fully licensed driver of at least 21 years old who is either a parent, guardian, instructor, or appointed by a parent or guardian in the passenger seat at all times.
In order to obtain a license to drive unsupervised, teens must pass a road test, hold a permit for at least 6 months, and complete certain other requirements depending on age.
If the teen is between 16 and 16 years and 6 months of age, they must complete 50 hours of practice time and complete a 6-hour behind the wheel training course.
If the teen is over 16 years and 6 months, the 50 hours or practice driving are required, but the 6-hour behind the wheel training is optional.
During the restricted license phase, teens must obey the following rules:
- For the first six months, no passengers under the age of 21 are permitted unless there is a parent or approved driver over 21 in the passenger seat, or the passengers are siblings
- For the second six months, only one passenger under the age of 21 is permitted, except when an approved driver over 21 is in the passenger seat or if the passengers are siblings
- No cell phone use of any kind is permitted while driving
- For the first year, driving is not permitted between midnight and 5 a.m., unless for school, work, in an emergency, or in the case of an emancipated minor
At 18 years old, teen drivers can graduate to a full license. At this time all restrictions are lifted.
Teen drivers are required to have insurance that meets the legal minimums as soon as they obtain a license. Most teens are covered under the policy of a parent or guardian, but they must be specifically added to the policy when they pass the road test for their license. A teen driver can stay on the policy of a parent or guardian even while away at school.
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