Colorado requires every car owner to carry car insurance. Most car owners shop for car insurance based on the lowest price. But looking for the lowest price can lead you to "waive" (decline) critical insurance coverage for your car. Declining uninsured motorist coverage is a big mistake—and you won't find out that you made this big mistake until after you have been injured by another driver who was uninsured, or inadequately insured, for his negligence.
By law, car insurance companies must offer, and quote the cost of, your car insurance to include at least $25,000 of insurance to cover you in case you are injured by an uninsured driver. Why would you need this coverage? Statistics show that about 17% of all drivers in Colorado who cause accidents are financially irresponsible and do not carry even the legal minimums of car insurance. Yet, even if the striking driver had the state minimum insurance ($25,000), you may quickly find that $25,000 of coverage does not go very far to pay your medical bills and loss of time from work, much less to compensate you for the pain and disruption of life caused by a car accident. The good news is, if you purchased the recommended $25,000 UN-insured motorist coverage, this coverage will also provide an additional $25,000 coverage on top of what the under-insured striking driver carried, for a total coverage of $50,000 available to you to compensate you for your injuries in a car accident.
When you ask the insurance representative for "full coverage" on your car, especially if you have a newer car, the quoted cost of the insurance may hit you pretty hard. If you ask the agent to break down the coverage, you will find that the biggest cost for your car insurance is the "collision" or "comprehensive" coverage for damage to your vehicle. Many agents will recommend that you decrease the vehicle damage insurance cost by increasing your deductible (from $500 to $1,000 for instance). If you still complain about the costs, some agents may suggest that you consider waiving the uninsured motorist coverage, even though the cost of that coverage is a fraction of your total insurance bill. Big Mistake.
The law requires that uninsured motorist coverage be offered to you in the same dollar amount as your liability coverage on the car. So if you cause injuries in a car accident, and your liability coverage insures you for $100,000 if you injured someone, the person you injured would have access to $100,000 in insurance coverage for your negligence. On the other hand, if your liability coverage is $100,000 but you decide to save money and drop your uninsured motorist coverage, you actually are cutting yourself (and your family and passengers) from the same amount of coverage that you bought for the stranger that you may have injured! Why would you ever want to do that?
Uninsured motorist coverage is such important coverage in Colorado that, legally, you can only decline that coverage in writing—signed by you. A friend who helps you purchase car insurance cannot decline that coverage for you. The Colorado legislature has recognized for years that uninsured motorist coverage is the only coverage that will prevent catastrophic losses to a person injured at the hands of a financially irresponsible driver. Thus it has long been the law of Colorado that the only time an insurance company could issue a policy without uninsured motorist coverage was when every "named insured" in the policy actually, and knowingly, rejects the coverage.
So look carefully at rejecting "optional" uninsured motorist coverage in your car insurance. The risk of being injured by a financially irresponsible driver in Colorado is among the highest risk of any state in the nation. The cost of uninsured motorist coverage is minimal when compared to your potential financial ruin if you are injured by a financially irresponsible driver. You may not be able to control dumb drivers who cause car accidents, but you can be smart to protect yourself from their irresponsibility.