Colorado Uninsured Motorist Coverage: Limits, Stacking, and Deadlines

Colorado uninsured motorist coverage is optional, but every auto insurer in the state has to offer it to you with each new or renewed policy, and if you don’t reject it in writing, it gets added at the same limits as your bodily injury liability coverage. About one in six Colorado drivers carries no auto insurance, which is why this coverage — usually written as UM/UIM to cover both uninsured and underinsured drivers — is one of the most useful protections on a personal auto policy.

Is UM/UIM Coverage Required in Colorado?

No. Colorado does not require drivers to carry uninsured or underinsured motorist coverage. What state law requires is that every insurer offer it before issuing or renewing a policy.¹ If you want to reject it, or take a lower amount than your liability limits, that decision has to be in writing. Without a written rejection on file, your insurer must include UM/UIM coverage matching your bodily injury liability limits.

Colorado’s mandatory minimum liability limits are $25,000 per person for bodily injury, $50,000 per accident for bodily injury, and $15,000 for property damage.² So a driver with state-minimum liability who accepts the default UM/UIM offer ends up with $25,000 per person and $50,000 per accident in UM/UIM coverage. Higher liability limits produce a correspondingly higher UM/UIM offer. You can select a lower UM/UIM limit than your liability coverage, but you cannot select a higher one.¹

What UM/UIM Coverage Pays For

UM/UIM coverage pays bodily injury damages when you or your passengers are hurt by a driver who has no insurance or whose liability limits are too low to cover the harm. That includes medical bills, lost wages, pain and suffering, and other bodily injury losses, up to your policy limits.³

Everyone in the vehicle at the time of the crash is covered, not just the named policyholder. A passenger injured by an uninsured or underinsured driver can make a claim under your policy for their own losses.³

How Underinsured Motorist Benefits Are Calculated

UIM coverage in Colorado fills the gap between what the at-fault driver’s insurance pays and your actual damages, up to your own UIM limit. It does not stack on top of the at-fault driver’s payment to give you a combined total higher than your policy limit.

An example makes it concrete. Your total damages are $100,000. The at-fault driver carries the $25,000 state minimum. Your UIM limit is $100,000. The at-fault driver’s insurer pays its $25,000, and your UIM coverage can pay up to $75,000 to close the gap between what you got and what you lost.

There is an important wrinkle in your favor. Colorado law says your UIM insurer must cover the difference between the at-fault driver’s liability limit and your damages regardless of how much you actually collected from the at-fault driver.¹ If you settle with the at-fault driver for less than the full policy limit, your UIM coverage still applies, and any clause requiring you to first exhaust every dollar of the at-fault driver’s policy is unenforceable.

What UM/UIM Coverage Does Not Cover

UM/UIM in Colorado is bodily-injury-only. It does not pay for damage to your vehicle or other property. The Colorado General Assembly’s own description of the coverage says plainly that “it does not cover damage to the insured’s vehicle.”³ Vehicle damage from an uninsured driver requires collision coverage or a separate uninsured motorist property damage add-on if your insurer offers one.

Some policies also restrict coverage when the vehicle was in commercial use at the time of the accident. And for hit-and-run crashes, coverage applies to unidentified drivers,³ but some policies require physical contact between the vehicles before benefits kick in. A 2001 Colorado Court of Appeals decision upheld physical-contact clauses as valid policy conditions, so if you swerved and crashed to avoid a driver who never touched your car, whether you are covered depends on your exact policy language.

Stacking UM/UIM Coverage Across Policies

Stacking is combining UM/UIM limits from more than one policy or vehicle to increase the total coverage available after a single accident. Colorado allows insurers to write anti-stacking provisions that block combining limits across multiple vehicles on the same policy, or across multiple policies from the same insurer or from insurers under common ownership. Those anti-stacking clauses cannot, however, prevent you from stacking coverage across policies issued by unrelated insurance companies.⁴

Stacking also comes up for resident relatives. Colorado case law distinguishes between policies issued directly to you and policies where you’re covered as an additional insured, such as a family member’s policy. Anti-stacking language reaches the policies issued to the insured but may not reach coverage through a relative’s policy with a different, unrelated insurer.⁵

Because stacking turns on the exact policy wording, read the anti-stacking clause carefully. If your insurer denies stacked coverage and you believe the denial is wrong, this is worth running by an attorney familiar with Colorado insurance law.

The No-Setoff Rule

Your UM/UIM insurer cannot reduce what it pays you because you received money from another source. Colorado’s statute specifically bars setoffs from health insurance, medical payments coverage, workers’ compensation, other liability insurance, or other UM/UIM policies.⁵

If your health insurer already paid $30,000 of your medical bills, your UM/UIM insurer cannot subtract that $30,000 from your claim. Same story for workers’ compensation benefits. Colorado courts have consistently held that letting insurers take those offsets would defeat the purpose of the coverage.

Deadlines for Filing a UM/UIM Claim

Colorado sets a three-year statute of limitations for both uninsured and underinsured motorist claims. The clock generally starts on the date of the accident, when the cause of action accrues.⁶

Two exceptions can extend the window:

For uninsured motorist claims, if you preserved your underlying bodily injury claim on time and later discover the at-fault driver was uninsured, you have two years from the date you learned the driver was uninsured. You always get at least the full three years from when the cause of action accrued.
For underinsured motorist claims, if your underlying bodily injury claim was preserved on time, you have two years from the date you received payment of the settlement or judgment against the at-fault driver. Again, never less than three years from accrual.

These deadlines apply to lawsuits and to arbitration demands. Miss them, and you lose the right to recover UM/UIM benefits no matter how strong the underlying claim is. Many Colorado policies include mandatory arbitration clauses, so check yours to know whether a dispute goes to an arbitrator or to court.

If Your Insurer Delays or Denies the Claim

Colorado gives first-party claimants a specific statutory remedy for insurer misconduct. Under CRS 10-3-1115, insurers are prohibited from unreasonably delaying or denying payment of benefits owed. A delay or denial is unreasonable if the insurer had no reasonable basis for its decision.⁷

If you can show your insurer acted unreasonably, CRS 10-3-1116 lets you recover two times the covered benefit, plus reasonable attorney fees and court costs.⁸ That doubled-benefit penalty is the teeth in the statute. It is a separate remedy from a common-law bad faith claim, with a lower burden of proof, which makes it a more accessible option for most policyholders. These protections do not apply to workers’ compensation, title insurance, or life insurance claims.⁷

1
Justia Law. Colorado Code Title 10 Section 10-4-609 – Insurance Protection Against Uninsured Motorists – Applicability
2
Colorado Division of Insurance. Auto Insurance
3
Colorado General Assembly. Optional Automobile Insurance Coverage
4
Colorado General Assembly. SB17-182 Uninsured Motor Vehicle And Medical Coverage
5
Justia Law. Colorado Code Title 10 Section 10-4-609 (2021) – Insurance Protection Against Uninsured Motorists – Applicability
6
Justia Law. Colorado Code Title 13 Section 13-80-107.5 (2024) – Limitation of Actions for Uninsured or Underinsured Motorist Insurance – Definitions
7
Justia Law. Colorado Code Title 10 Section 10-3-1115 (2021) – Improper Denial of Claims – Prohibited – Definitions – Severability
8
Justia Law. Colorado Code Title 10 Section 10-3-1116 (2021) – Remedies