For automobile accidents that occur in Colorado after June 30, 2003, the Personal Injury Protection (PIP) benefits that Colorado’s Automobile No-Fault required became a thing of the past. As a result, in Colorado, your health insurance policy is your primary source of protection if you are in an automobile accident, supplemented by whatever medical payment insurance you buy from your auto insurer.
But, your health insurance likely does not cover many of the things that were provided for in your PIP benefits. Your health insurance may not cover all of your relatives who live in your home and happen to travel in your vehicle. Your health insurance likely won’t cover any uninsured passengers who happen to be traveling with you in your vehicle. Your health insurance will not cover your wage losses if you miss work due to an accident.
SO, WHAT SHOULD YOU DO TO MAKE SURE YOUR AUTO INSURANCE PROVIDES THE COVERAGE YOU AND YOUR FAMILY NEED?
In my view, you should purchase Med Pay as a part of your automobile coverage. It is recommended that you purchase as much Medical Payment (Med Pay) coverage as you can afford, but don’t be fooled into thinking Med Pay will cover everything your old PIP policy covered. When purchasing Med Pay as a part of your auto insurance it will be important to read the fine print. The purpose of your standard Med Pay policy will be to provide medical benefits for everyone in your vehicle for death or injury caused by accident. Insurance companies will differ on the coverage they are providing via Med Pay. Your Med Pay will likely not cover your wage losses if you miss work due to the accident. Med Pay benefits are relatively inexpensive in most auto policies.
Bodily injury liability insurance protects you against liability should your car injure others and you are held liable. Property damage liability protects you against liability up to the stated limit should you, your resident relatives or persons using your car with permission be held liable for causing damage to the property of others while driving your car.
Because most losses fall within lower levels of coverage, higher-limits are proportionately less expensive. Thus, you will find that increasing your liability coverage is one of the cheaper ways to provide yourself with more protection. I would recommend that your liability limits be at least $100,000 per person/$300,000 for two or more persons/$50,000 for property damage.
By statute, here in Colorado, insurers are required to offer UM/UIM coverage up to the limits of the policyholders liability coverage or $100,000/$300,000, whichever is less. UM/UIM coverage pays for damage that you, relatives living in your household and passengers in the insured automobile are legally entitled to recover because of bodily injury or death caused by an uninsured/underinsured automobile driver. Increased UM/UIM coverage will provide you and your household with some of the protection that PIP coverage used to provide when you are injured in a car accident in which you are not at fault and the other driver has inadequate insurance.
In Colorado, for accidents which occur after January 1, 2009, the UM/UIM coverage will stack on top of whatever liability coverage is available. In other words, if your damages in medical expenses, lost wages, and pain & suffering amount to $125,000 and the person who hit you only has $25,000 in liability coverage, a $100,000 UM/UIM policy will ensure you have coverage for the full $125,000 in damages.
Because there are still many people on our roads with minimal liability coverage, I do recommend that you carry at least $100,000 per person/$300,000 per accident in UM/UIM coverage.