With the economic downturn that seems to be affecting everyone, drivers need to be even more actively protecting themselves and their families from dangerous uninsured drivers. Recent national articles support the notion that with the ever-worsening economy more and more drivers are expected to forgo auto insurance coverage.
A) Why Coloradans Need Uninsured Motorist Coverage:
A number of states have what is called a no-fault system as part of their automobile insurance laws. A no-fault system is a system where your insurance company has certain obligations to provide medical care reimbursement, temporary wage loss reimbursement, and other such automatic benefits for their insured drivers and occupants involved in an auto accident. In those states, as long as you have basic auto insurance, the chances of an uninsured driver causing you or your family to find yourself without recourse is remote.
In Colorado, however, the situation is much different. Colorado switched from a no-fault system to a tort system in 2003. Basically, this means that in a motor vehicle collision, your own insurance pays nothing. It is the at-fault driver's insurance that must pay for the harms and losses caused to the accident victims. This system works fine as long as everyone is insured. However, more than 15% of Colorado drivers are uninsured. Further, every economic indicator suggests that this figure is bound to increase as the economy continues to tank.
Uninsured motorist coverage makes sense wherever you live. However, given Colorado's tort system, and the increasingly poor economy, I recommend that every Colorado driver call their insurance agent and insist on purchasing as much UM coverage as they will sell you.
B) Uninsured Motorist Coverage Actually Provides YOU A lot More than Protection Against Uninsured Drivers:
This is perhaps the hardest concept for our new clients to understand. Clients call us up and explain that the insurance company for the at-fault party has done this or failed to do that, but shortly thereafter, we start asking them about THEIR uninsured motorist coverage.
At this point, I can often hear a change in the client's voice. It is like the client is not sure if we are paying attention to their story. But actually, we are paying attention and inquiring into their uninsured coverage is imperative.
Under Colorado law, every uninsured motorist policy is also an under-insured motorist policy. C.R.S. §10-4-609
This means that on every occasion that a driver causes an accident that causes injury to a victim where the value of the injuries, harms, and losses exceeds the limits of coverage that the at-fault driver had with his insurance company, then our client's own uninsured/under-insured motorist coverage comes into play. In fact, since January of 2008, we can stack our client's coverage for UM/UIM benefits right on top of the at-fault driver's policy limits. Uninsured Motorist coverage not only protects you against uninsured drivers but also serves as a safety net for when an insured is an accident with an at-fault driver who has deficient insurance coverage.
C) How Much Uninsured Coverage is Enough?
Uninsured Motorist Coverage is some of the best and cheapest coverage available. You will be surprised how little your insurance bill changes even if you add substantial additional UM/UIM coverage to your auto insurance.
Next, consider that major accidents can sideline you from work for a year or more while you rest and receive expensive medical care. My general rule is that if you have good health insurance, you can probably get away with uninsured motorist coverage equal to 1-2 years of your current income. If, however, you do not have health insurance available, in the event of an accident, you would have to pay for your medical care out of pocket. Under those circumstances I would purchase 3-5 years of current salary as your level of uninsured motorist coverage.
The sad fact is, I have seen families devastated financially when the breadwinner gets catastrophically injured and is not sufficiently insured. Uninsured Motorist coverage is reasonably priced, it can be added or increased simply by calling your insurance agent, and most people in Colorado do not have sufficient UM coverage.
Call your insurance agent today and tell her you want to have a discussion about increasing your Uninsured/Under-insured Motorist coverage. Do it TODAY! She will be happy you called, but most importantly, this simple step will better protect you and your family from the unknown future injuries and financial strain associated with serious injuries stemming from uninsured drivers.
At Anderson, Hemmat, & McQuinn, we can ensure you fully utilize all available insurance coverage to best protect you and your family in the event of a serious auto accident. As always, your initial consultation is free.