If a Colorado driver were going to fix one thing on their auto policy, this is the one that matters most.
Not the deductible. Not roadside assistance. Uninsured/Underinsured Motorist coverage — UM/UIM — because it’s the one part of your policy that pays you when someone else wrecks your life and can’t pay for it. And in Colorado, the odds of that happening are worse than almost anywhere in the country.
The short answer
Uninsured Motorist coverage steps in when the driver who hit you has no insurance, doesn’t have enough, or takes off before you get a plate number. It pays your medical bills, your lost wages, and your pain and suffering — the things the at-fault driver’s liability policy was supposed to cover but can’t.
Carrying the maximum limit a carrier will offer — often well over $1,000,000 — is not an extravagance in Colorado. It is a direct response to how many drivers on the road cannot pay for what they cause.
Colorado’s uninsured driver problem is bad. The underinsured problem is worse.
Most people have heard that one. It’s the smaller half of the problem.
Underinsured means they have a policy. It just isn’t big enough to cover what they can do to you. And Colorado isn’t just leading this category — the Insurance Research Council found Colorado’s underinsured rate climbing faster than any other state’s, up more than 24 percentage points over their study period.
Put those two numbers together and close to six out of ten Colorado drivers either can’t pay you or can’t pay you enough.
That’s not a statistic about strangers. That’s the car next to you on C-470 right now.
What uninsured motorist coverage actually pays for
When another driver injures you and can’t cover the damage, your UM/UIM coverage can pay for:
- Medical bills — the ER visit, imaging, surgery, follow-ups, physical therapy
- Future medical care — the treatment you’ll still need a year from now
- Lost wages — the paychecks you miss while you’re recovering
- Lost earning capacity — income you’ll never earn again if you can’t return to the same work
- Pain and suffering — the non-economic damages you’d have recovered from the at-fault driver
It also follows you further than most people realize. UM/UIM generally protects you and your household family members when you’re driving your own car, riding as a passenger in someone else’s, on a bicycle, or on foot.
Your own vehicle damage is a separate conversation — in Colorado that’s normally handled by your collision coverage, not by UM.
Uninsured versus underinsured
These sit on the same line of your declarations page, usually written as “UM/UIM Bodily Injury,” but they solve two different problems.
Uninsured is the dramatic case: the driver has no liability policy at all, or it’s a hit-and-run and there’s nobody to collect from. Your UM coverage stands in for the policy they should have had.
Underinsured is the common one: they have insurance, it pays out, and it isn’t close to enough. Your UIM coverage pays the gap between what their policy covers and what your injuries actually cost.
In practice, UIM is the one that saves people. Everybody worries about the uninsured driver. It’s the minimum-limits driver who does the real damage.
For a shorter read on the same question, see Do You Have Enough Uninsured Motorist Coverage?
The Colorado rule most people get wrong
Here’s a piece of Colorado law worth knowing, because it catches most policyholders by surprise.
Under C.R.S. § 10-4-609, your underinsured motorist coverage is not reduced by what the at-fault driver’s insurance pays you. The statute says your limit “shall not be reduced by a setoff from any other coverage, including, but not limited to, legal liability insurance, medical payments coverage, health insurance, or other uninsured or underinsured motor vehicle insurance.”
That matters enormously. In some states, if you carry $250,000 of UIM and the at-fault driver pays you $100,000, you only get $150,000 more. In Colorado, your $250,000 sits on top of their $100,000. Your health insurance paying the hospital doesn’t reduce it either.
Colorado’s version of this coverage is genuinely better than most states’. Which is exactly why it’s worth buying real limits of it.
What the state minimum actually buys
Colorado requires drivers to carry at least $25,000 per person for bodily injury, $50,000 per accident, and $15,000 for property damage.
Run the math on $25,000.
A single night in a Denver-area hospital, an ambulance ride, and an ER workup can eat most of it before anyone has set a bone. Add a surgery and you’re multiples past it. Add three months out of work and it isn’t close.
Here’s what that looks like in practice.
A driver carrying exactly the state minimum runs a red light and puts you in the hospital for a week. You need surgery. You’re out of work for four months. Your total damages come to $300,000.
Their policy pays $25,000. That’s everything it can do. You can sue them personally, but you can’t collect what they don’t have.
If you carry $250,000 of UM/UIM, your own policy pays up to $250,000 more — and because Colorado bars any setoff, it does not subtract their $25,000. You’re covered to $275,000 of that $300,000.
If you rejected UM/UIM to save a few dollars a month, you’re holding a $25,000 check against a $300,000 problem. The rest comes out of your savings, your retirement, or never gets paid at all.
Why Colorado makes you sign a waiver to reject it
Colorado doesn’t require you to buy UM/UIM. But the state doesn’t let you skip it quietly either.
Under Colorado law, UM/UIM is included in your policy by default and comes off only if you reject it in writing. Your carrier also has to offer you UM/UIM limits equal to your bodily injury liability limits before issuing or renewing.
Think about what that signals. The legislature could have treated this like any other optional coverage. Instead they built in a default-on rule and a paper trail, because too many people were finding out about the gap after the crash instead of before it.
If someone sold you a policy and had you sign a UM waiver without explaining what you were giving up, that’s worth a second look.
How much should you carry?
The honest answer: as much as the carrier will offer.
Three things worth knowing about how the limits work.
Your carrier isn’t required to offer UM/UIM higher than your bodily injury liability limits. If you’re carrying 25/50 in liability, 25/50 is the ceiling on your own protection too. Raising your liability limits is usually the first move, because it lifts both at once.
The price is not the obstacle people expect. UM/UIM is one of the least expensive lines on the policy relative to what it does. Going from state-minimum limits to real limits is typically a small change to your premium and an enormous change to your outcome.
Look at it as a wage earner, not a car owner. The question isn’t what your car is worth. It’s what happens to your household if you can’t work for a year. That’s the number this coverage is protecting.
Don’t forget your umbrella policy
This is the part that gets missed most often.
An umbrella policy adds liability limits above your auto and home policies. But UM/UIM on an umbrella is a separate question. Some carriers include it. Some exclude it entirely. Some will offer it, but only if you ask.
That’s a genuinely confusing spot for consumers, because if you bought a $1,000,000 umbrella you’d reasonably assume you’re protected for $1,000,000 in either direction. Often you’re not. The umbrella protects everyone else from you, and does nothing for you when an uninsured driver is at fault.
Umbrella UM/UIM is also how you get past the ceiling your auto liability limits impose — and dollar for dollar it’s some of the cheapest coverage in personal insurance.
It is worth asking an agent directly whether the carrier offers UM/UIM on the umbrella. If the agent doesn’t know the answer, that’s the answer.
Take a look at your limits
Pull out your declarations page and find the UM/UIM line. If it says $25,000, or if it says “rejected,” it’s worth a conversation.
Premier Mountain Insurance is an independent agency in Littleton with access to 13+ carriers, and can tell you quickly what raising those limits actually costs — and which carriers will put uninsured motorist coverage on an umbrella policy.
Call Premier Mountain Insurance at 303.922.1002 or start a quote below.
