Uninsured Motorist coverage pays for expenses incurred if you’re injured in an accident caused by a driver that is uninsured. It’s generally coupled with Underinsured Motorist coverage, which pays for the same expenses but if the driver is considered underinsured, meaning their liability limits are lower than your chosen Underinsured Motorist limits. Those coverages together are often referred to at UM/UIM coverage.

Are you required to have Uninsured Motorist coverage?

Uninsured Motorist coverage is required in Colorado unless a signed rejection form is signed. You also have to sign a form if you elect to have your Uninsured Motorist limits lower than your liability limits.

So technically, no. You don’t have to have Uninsured Motorist coverage. But it’s recommended and you have to waive and sign away the rights to the coverage if you don’t want it.

If you choose to reject or lower your UM/UIM coverage but you don’t return the signed form in a timely fashion, the insurance company will add that coverage back to the policy and add the premium to your bills. That’s because insurance companies are required by Colorado law to either provide the coverage or retain a signed rejection or coverage selection form.

Who does it cover?

Drivers on the policy
Family members who live in the household
Passengers riding with an insured driver

Why is Uninsured Motorist coverage important?

In 2019, more than 16% of drivers in Colorado were uninsured. That means about 1 in every 6 drivers was driving with no insurance. If one of those drivers were to cause an accident and you, a family member, or a passenger were injured, they would have no coverage to pay for your medical bills, let alone any other expenses you might incur.

Coverage for things health insurance won’t cover

Many people assume they don’t need UM/UIM coverage because they have health insurance. While health insurance may help pay some of the bills, I wouldn’t put all of my eggs in that basket. For one, health insurance has limits of what they will cover and what is considered “in network.” If your ambulance ride or ER doctor isn’t in your network, you could be left covering that whole bill yourself.

Even if your health insurance does cover your medical bills, you’re still responsible for your health insurance deductible. With the rising costs of health insurance, many people are choosing higher deductible plans. That could leave you paying the first $5-10K out-of-pocket before you see your health insurance provider pick up the bill.

There are also some things that health insurance is never going to cover, like your lost wages, funeral expenses, or pain and suffering. Those are all things that Uninsured or Underinsured Motorist coverage can help pay for. If someone loses their life in an accident with an uninsured or underinsured driver, or if they’re out of work for a period of time while recovering, UM/UIM coverage can step in and relieve the financial stress.

You may not know what insurance your passengers have

Do you ask everyone that gets in your car what health insurance they have? My guess is no.

You might let a coworker ride with you to lunch one day, carpool with a cousin to a wedding, or pick up your kids friends from soccer practice. All of those passengers would be covered by your UM/UIM coverage. Without knowing what health insurance they have (if any) or what their deductible is, you’re taking a gamble with their financial future if you don’t have Uninsured Motorist coverage to help protect them.

Not only that, but your passengers may not be able to afford being out of work for an extended period of time if they are injured in an accident. Your UM/UIM coverage can go a long way in helping them get back on their feet.

Who do you or your family members ride with?

Your Uninsured Motorist coverage also follows you and your household members when you’re a passenger in other cars. I know I don’t ask people what coverage they have on their car insurance policy before I get in the car with them, so I feel more comfortable knowing that I at least have coverage for the limits I chose for my family.

Uninsured Motorist vs Underinsured Motorist

You’ll have the same limit for both coverages, but they each have a specific scenario for when they will kick in.

Uninsured Motorist coverage extends when a covered person is injured in an accident that is caused by a driver with absolutely no liability insurance.

Example:
Sally had $100K in medical bills from an accident caused by Bob. Sally’s UM limits were 100/300 ($100K/person and $300K/accident), but Bob didn’t have any auto insurance. Since Bob doesn’t have liability coverage to pay for her bills, Sally’s policy would step in and pay the full $100K. If Sally didn’t have UM coverage, she would have to pay out-of-pocket or sue Bob for the damages.

Underinsured Motorist coverage extends when a covered person is injured in an accident that is caused by a driver whose bodily injury liability limits are lower than the covered person’s selected Underinsured Motorist limits.

Example:
Mary had $100K in medical bills from an accident caused by Jim. Mary’s UIM limits were 100/300 ($100K/person and $300K/accident), but Jim’s liability limits were only 25/50 ($25K/person and $50K/accident). Jim’s policy would only pay up to $25K of her medical bills because that is the per person limit. Since Mary’s UIM limits were higher than Jim’s liability limits, her policy would step in to pay the rest of the $75K of medical bills.

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