Picture this. You are driving down Camino del Rio, traffic is moderate, and you are driving the speed limit and giving the car ahead of you plenty of space. The light at the next intersection turns red, and you slow down. Unfortunately, the driver behind you decides to respond to a text message and crashes into you at 45 mph.
Durango Fire and Rescue responds, and you are loaded into an ambulance and brought to the emergency room. The hospital runs numerous, expensive, diagnostic tests to figure out if you suffered a brain injury. Fortunately, you are discharged from the hospital later that day with instructions to see your primary care doctor for further treatment, and the next day you contact the negligent driver’s insurance company.
After that, you assume everything is taken care of so you can focus on getting treatment and healing. Three days later, the insurance company calls: Bad news, the person who was texting stopped paying their monthly premium five months ago and was not insured at the time of the crash.
Now what?
While automobile insurance is compulsory in Colorado, after you purchase a policy and provide proof of insurance to register your vehicle, the state has no mechanism to prevent you from canceling your policy or from falling behind on your monthly premiums. According to the Insurance Research Council, in 2015, 13.3 percent of motorists in Colorado were uninsured.
Fortunately, you can protect yourself from irresponsible drivers by purchasing uninsured/under-insured motorist (UIM) coverage. If you purchase a UIM policy in the scenario presented above, you would file a claim with your insurance company to receive compensation for your bodily injuries. Clients often feel it is unfair for their insurance company to pay for damages caused by an uninsured driver, but UIM coverage is designed to protect you from losses caused by uninsured drivers. Given the number of uninsured drivers on the road, UIM coverage is critical.
In Colorado, all insurance carriers must offer their insureds the option to purchase UIM coverage, and the minimum amount of coverage offered must be at least equal to the insured’s bodily injury liability policy limits. While UIM coverage is optional, in order for a rejection of coverage to be binding, it must be done in writing. Moreover, your insurer has a statutory duty to explain the purpose of UIM coverage and to provide you with information on the price at which different levels of UIM coverage can be purchased.
While the Colorado Supreme Court has stressed the importance of an insurer providing sufficient information to allow a purchaser of insurance to make a well-educated decision on whether to purchase UIM coverage, an insured’s ability to make an informed decision became more complicated with the advent of online policy shopping.
Many people go online, click through various policy options, realize they can save a few bucks a month by rejecting UIM coverage, and without fully understanding the extreme risk they are exposing themselves to, reject UIM coverage. Do not fall victim to uninsured drivers by clicking a box and electronically signing a document you do not understand.
If you purchased a policy online, call your insurance company and find out what type of coverage you have, or better yet, make an appointment with an agent who can explain your options in person and help you make an informed decision.
Another important fact to consider when purchasing UIM coverage is that Colorado requires motorists to carry only $25,000 per person and $50,000 per crash of liability coverage. This means that if you suffer catastrophic injuries in an automobile accident and the driver who caused your injuries had a state minimum policy, there will be only $25,000 available to compensate you, which could be less than the total cost of your medical treatment. This scenario becomes more complicated if multiple people are injured. If, however, you have UIM coverage, you do not have to worry about underinsured drivers, and in this scenario, you would file a claim for underinsured motorist benefits with your insurance company.
There are many scenarios to account for in purchasing automobile insurance. As a personal injury attorney, some of the most difficult conversations I have with clients involve inadequate insurance coverage.
Please protect yourself.
Meg Foley is a personal injury attorney with Downs, McDonough & Cowan. Reach her at meg@swcolaw.com.
