How Much Auto Insurance Do I Need in Colorado?

How much auto insurance do I need in Colorado? Choosing the right amount of car insurance can be difficult. Colorado law requires some coverage, but you may be wondering if it’s enough or if you should buy more.

There’s no easy answer. While you are obligated to purchase the minimum car insurance required for driving in your state, how much more insurance you want to buy is dependent on your personal finances.

I understand how stressful this can be, but if you’re looking for tips to help you figure out what amount of coverage is the correct amount and then follow through with it, then read on below!

The Different Types of Car Insurance

Before you can even begin to measure how much insurance coverage you need, it helps to first understand the different types of car insurance.

Here are the common kinds of auto insurance:

  • Bodily injury liability
  • Medical payments, no-fault or personal injury protection coverage
  • Uninsured/Underinsured motorist coverage
  • Comprehensive physical damage coverage
  • Collision coverage
  • Property damage liability Coverage
  • Rental reimbursement

Bodily Injury Liability Insurance

One of the minimum car insurance requirements under Colorado law is to have bodily injury liability coverage. This type of insurance will pay the medical expenses or medical bills and any other costs incurred by people you injured while driving your vehicle.

Bodily injury liability insurance typically covers up to $50,000 per person for any one accident, plus an additional $100,000 for all people injured in an accident caused by you or a member of your family.

Medical Payments, No-fault or Personal Injury Protection Coverage

This kind of coverage pays for medical and funeral expenses should you or your passengers be injured in an auto accident.

In Colorado, this type of insurance is known as “no-fault,” which means that it will pay out regardless of who was at fault for the accident. This insurance does not apply to other Colorado drivers, but rather to your passengers (or any person inside your car) and you.

Some people choose not to buy no-fault insurance because their health insurance plan covers the costs of traffic accidents. However, many plans may not cover all types of injuries.

For example, if you are hurt in a crash that was caused by another driver’s negligence (such as texting while driving), your health plan might only cover injuries that are directly related to the car accident.

That means you could have expensive medical bills if your health plan does not cover additional costs, such as lost wages and ongoing treatment.

Insurance agents in Colorado can help figure out whether it’s better for you and your family to buy no-fault insurance or rely on a different type of coverage.

Uninsured/Underinsured Motorist Coverage

If you are involved in an accident with a driver who did not carry insurance at all, uninsured motorist coverage will pay for the costs associated with the crash. You might decide to purchase this insurance because most people in Colorado carry car insurance (96 percent do), but statistics show that more than 10 percent of Colorado drivers still don’t have auto liability insurance.

Review your current policy, as it might already include uninsured motorist coverage (known in some states as “underinsured motorist coverage”). If it doesn’t, you can add this feature to your car insurance in Colorado for an additional premium.

Keep in mind that this type of insurance will only cover injuries and damages to the driver and any passengers inside the vehicle—not damage to other vehicles or property. You should also keep in mind that while many people have uninsured motorists coverage on their auto insurance policies, only a small portion of these insurance claims are actually paid out.

Comprehensive Physical Damage Coverage

If you’re involved in an accident and your vehicle is totaled, comprehensive physical damage coverage pays to replace your vehicle. Your car insurance will likely cover any cost of repair to your vehicle after an accident, but comprehensive physical damage coverage will also pay out if a collision causes significant damage that cannot be fixed.

If you want compensation for the value of the car before it was damaged, this insurance can help replace your vehicle without leaving you with large bills.

Collision Coverage

If another driver is at fault in an accident and does not have enough car insurance to cover all of the costs associated with the crash, collision insurance helps pay for major damages to your vehicle — Typical insurance claim payouts can be up to $1,000 per year or up to $5,000 total. This kind of coverage is especially helpful when paying cash for a used vehicle since most vehicles lose their value quickly.

Property Damage Liability Coverage

If your vehicle damages another car, home, or other property, this type of insurance coverage will help pay for the cost of repairs. The amount that you are covered to payout will differ depending on your policy.

If you are found responsible for property damage or bodily injury to another person, your car insurance claim will help pay the other party’s expenses such as property damage, medical bills, or medical expenses. If you don’t carry liability insurance coverage that is enough, it might cause major problems in the event of an accident caused by you or a relative.

Rental Reimbursement

If you are involved in a car accident and your car is being repaired or totaled, it is often necessary to rent or borrow another vehicle. This type of coverage will help pay for the cost of a temporary rental vehicle while yours is being fixed. Most people buy this insurance if they don’t already have it included on their insurance plan, as most plans do not include rental reimbursement unless you purchase a separate policy.

What is Full Coverage Car Insurance?

Full coverage car insurance is the most comprehensive type of car insurance. It will cover all of the potential damages that you might be responsible for in an accident including damage to your vehicle or someone else’s, bodily injury, and even a hit-and-run accident.

If possible, this is the type of car insurance you should purchase — although it does come with a higher premium due to its many features. Check your Colorado car insurance policy to see what kind of coverage it already includes so you can decide if additional full coverage car insurance is right for you.

How Much Auto Insurance Do I Need in Colorado

How Much Car Insurance Coverage Do I Really Need?

When you’re looking for ways to save money on Colorado car insurance rates, the most important thing to help you keep your car insurance costs down is one that doesn’t come up as often as I’d like:

knowing how much coverage do I really need?

Once you have this figured out, it makes it a lot easier for you to find a good deal from Colorado insurers. But how do you go about figuring out what amount of coverage do I really need?

The best way is to check your insurance needs against what you have to see where the gaps might be.

Step 1: Figure Out Your Coverage Needs

Ask yourself a couple of questions about your vehicle and driving habits. For example, do you have any kids or pets that ride with you? If so, are they each covered on separate policies?

In addition to thinking about how well protected everyone might be in an accident, think also about how much risk of property damage you want to carry insurance for the vehicle itself.

Do you drive a car with classic car insurance value (a Chevrolet Chevette, from 1970) or one that would cause major property damage if it were in a crash? How likely are you to get into fender benders?

Step 2: Decide Whether You Need Excess or Compulsory Insurance Coverage

If you have ever been in an accident, or even if a family member has, you know that it can cost thousands of dollars.

On average, Colorado car insurance covers about 50% of the cost of repairs to damage caused by an accident.  So think about how much insurance do I really need if I get into another accident between now and when my policy expires?

If it’s less than 50%, getting additional excess coverage might make sense for your driving habits. But first check with your insurance company to find out what its “deductible” (the amount you have to pay) is before purchasing excess coverage so you don’t overspend your policy.

Step 3: Determine Whether You Need Additional Excess Insurance or Deductible Reductions

Another way to save is to consider additional excess insurance from your current provider. Most companies offer this type of policy, which basically gives you the option of having a lower deductible on your existing auto insurance. 

For example, if an accident totaled my vehicle but I had paid $500 in excess coverage for that year and my car was valued at $2,000, then I’d be reimbursed the remaining charge of $1,500 owed by my own auto insurance company (and not have to pay the full amount out-of-pocket).

Step 4: Make Sure You Have the Right Kind of Car Insurance in Colorado

When you think about how much auto insurance do I really need?  You also have to consider if your policy covers all of the driving that you intend to do. For example, if you’re planning on moving out of state or even temporarily within Colorado for a few months at a time, does your policy allow for this? There may be limits placed on where you can drive and other important details that could make it very difficult to get reimbursed later on down the line.

Some insurance companies will sell policies with restrictions like these included, but others won’t. So before purchasing an additional policy from your current Coloraod car insurance provider, find out if they offer one that will cover not only your needs but also those of your vehicle and its driver.

Step 5: Look for Special Discounts and Benefits

Last but not least, look into any perks your Colorado car insurance company might be offering to get free or reduced insurance coverage. Insurance companies often run promotions that lower the cost of your monthly premium in exchange for a certain amount of time you spend driving without an accident.

In addition, they may offer discounts for things like having anti-theft devices installed in your vehicle at the time of purchase (pressure monitoring system, glass breakage sensors, etc.). Keeping up with these kinds of extra benefits can help you save up to $100 per year on average. 

Most Common Auto Insurance Mistakes to Avoid

Failure To Obtain Multiple Quotes

Many Colorado drivers end up purchasing the plan from the carrier who gives them the first quote. This is a major mistake that can cost you. Even you if only get a handful of quotes, you will find there can be major differences in the premiums. Our agents at Facetime Insurance have a platform that allows us to obtain multiple quotes very quickly.

Not Understanding the Coverage

There is no policy out there that offers you total coverage. It is important to read through your policy or sit down with your agent and discuss what coverage options may be missing based on your current situation. For example, there has been an increased number of break-ins in the Denver, CO area, so you may want to make sure you are insured for theft.

Only Purchasing the State Minimum.

While the state limit policies are the cheapest policies you can buy, they will lack adequate coverage. If you are in an accident with a high-end vehicle, you will likely have to pay out of pocket the difference. You can avoid this by purchasing a higher level of liability coverage.

Choosing a Deductible that is Too Low

People miss out on a significant amount of savings by picking a low deductible. By raising your deductible from $200 to $1,000, you can potentially save around 40%. Of course, you want to make sure you have the amount of the deductible set aside so you can cover it in the event of an accident.

If you are in the Denver, CO area and would like to learn more about auto insurance, please contact Facetime Insurance.