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Colorado Insurance Blog

What is “Broad Form” Auto Insurance and Why is it Risky?

What is Broad Form Auto Insurance?

Broad Form auto insurance is very basic liability insurance that covers only one driver. Only the driver named on the policy is covered, so if anyone else ever drives their vehicle(s), for any reason, they would have no coverage. Essentially; instead of covering most drivers that aren’t excluded by the policy like regular auto policies, Broad Form policies exclude every single driver that’s not listed on the policy.

Since it only covers the one driver, it rates for the person rather that the vehicle(s). You’d pay the same amount regardless of how many vehicles you own and it extends to any vehicle the policyholder operates.

Unlike traditional auto insurance, Broad Form policies don’t cover an entire household. You can’t get a policy with your spouse and your kids, you can only get a policy for one individual driver.

What is NOT covered by Broad Form insurance?

  • Damages to your own vehicle
    • That means you can’t get Comprehensive or Collision coverage for your car, so you’d have no coverage to repair your car from an accident, hail damage, theft, or any other cause of loss
  • Your own medical payments
    • There’s no option to add Uninsured Motorist coverage or Medical Payments coverage
    • You wouldn’t have any coverage for your injuries even if you were involved in a hit-and-run or an accident with an uninsured driver
  • Injuries to your passengers
    • Like with your own medical bills, your passengers wouldn’t have any coverage for their injuries in an accident either
  • Liability payments if someone else drives your car and causes an accident
    • A Broad Form policy only covers the driver listed, so if your spouse, child, friend, co-worker, or anyone else drives your car, they’d have zero coverage
  • Roadside Assistance, Loss of Use (Rental Car Coverage), Gap Coverage, etc.

Who does Broad Form coverage make sense for?

Some people consider Broad Form coverage a good option if they have older cars that they don’t want physical damage coverage on and only need liability insurance. Personally, I disagree. In my opinion, the most glaring coverage gap between a Broad Form policy and a normal auto policy isn’t to coverage for your vehicle, it’s the Uninsured Motorist and Medical Payments coverage.

Those are the coverages that will help pay for your bills if you get injured in an accident. Hospital bills can pile up very quickly and paying those expenses out-of-pocket can cause financial ruin.

Read more in our blogs, What is Uninsured Motorist Coverage? and Do I Need Uninsured Motorist Coverage If I Have Health Insurance?

I would only recommend Broad Form coverage to someone who has enough funds built up to handle those expenses on their own. While Broad Form coverage does provide basic liability insurance and meets the minimum limits required by the state, it’s almost like choosing to “self-insure.” It’s a way to pay the least amount of money, but have the least amount of security in the event of a loss.

Facts About Broad Form Insurance:

Broad Form coverage is so limited it doesn’t meet the insurance requirements for most states

Only 11 states accept Broad Form insurance:

  • Colorado
  • Delaware
  • Idaho
  • Iowa
  • Maryland
  • Mississippi
  • Nebraska
  • Nevada
  • Ohio
  • Tennessee
  • Washington

Most reputable insurance companies don’t offer Broad Form auto insurance

Since Broad Form policies leave large gaps in coverage and aren’t considered good policies, most insurance carriers won’t even offer that type of policy.

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