What Happens If the At-Fault Driver Is Underinsured in Aurora?

A serious collision in Aurora can create financial losses that exceed the insurance coverage carried by the driver who caused the crash. Medical treatment, lost income, rehabilitation, property damage, and other losses can add up quickly after an injury-causing accident.

Colorado requires motorists to carry liability insurance, but some drivers carry only the required minimum limits. When an at-fault driver’s available liability coverage is not enough to pay the damages an injured person may be legally entitled to recover, that driver may be considered underinsured.

In that situation, the injured person’s own uninsured and underinsured motorist coverage, commonly called UM/UIM coverage, may be an important potential source of benefits. Whether UIM coverage applies and how much may be available depends on the facts of the crash, the available policies, the insured’s damages, and the terms of the relevant insurance policy.

Colorado’s minimum auto-liability requirements

Colorado drivers must maintain minimum liability coverage of:

• $25,000 for bodily injury or death to one person in one accident
• $50,000 total for bodily injury or death to two or more people in one accident
• $15,000 for property damage in one accident

These minimum limits are commonly described as 25/50/15 coverage. They are minimum legal requirements, not a guarantee that the coverage will be sufficient after a serious crash.

For example, if one injured person claims $100,000 in damages and the at-fault driver has a $25,000 bodily-injury liability limit, the at-fault driver’s insurer may not pay more than the applicable policy limit. The unpaid portion does not automatically become the injured person’s personal responsibility. Instead, the injured person may need to evaluate other potentially available insurance coverage, other potentially responsible parties, or a claim directly against the at-fault driver.

How UIM coverage may work

UM/UIM coverage is first-party coverage. That means it is purchased through, and typically claimed under, an injured person’s own auto insurance policy.

In Colorado, insurers generally must offer UM/UIM coverage at limits equal to the bodily-injury liability limits selected for the policy. A named insured may reject UM/UIM coverage or select lower limits in writing.

UIM coverage may help pay legally recoverable bodily-injury damages caused by an at-fault driver whose liability coverage is insufficient. It does not automatically pay every claimed loss.

Potential UIM benefits can depend on:

• The at-fault driver’s available liability coverage
• The injured person’s legally recoverable damages
• The UM/UIM limits purchased under the policy
• The policy language and endorsements
• Whether the injured person qualifies as an insured under the policy
• Whether other potentially applicable insurance coverage exists
• Priority-of-coverage, exclusion, and anti-duplication issues
• Compliance with applicable policy requirements

If you are evaluating a possible UIM claim, request a copy of the declarations page, the complete policy, and all applicable endorsements from the insurer.

Colorado’s anti-setoff rule

Colorado law generally provides that available UM/UIM coverage may not be reduced by a setoff from legal-liability insurance, Medical Payments coverage, health insurance, or other UM/UIM coverage.

This rule is important because it can prevent an insurer from simply subtracting money received from another source from the amount of UM/UIM coverage available under the policy.

For example, assume an injured person establishes $100,000 in legally recoverable damages, receives a $25,000 payment from the at-fault driver’s liability policy, and has $100,000 in applicable UIM coverage. The UIM claim may potentially address some or all of the remaining uncompensated damages, subject to the policy, available limits, proof of damages, and other applicable coverage issues.

The anti-setoff rule does not mean an insured person can recover more than the damages they are legally entitled to recover. The amount of any UIM payment remains dependent on the evidence, available coverage, policy terms, and the facts of the claim.

Steps to protect a potential UIM claim

A UIM claim differs from a third-party liability claim because the injured person is seeking benefits under their own policy. Early action may help preserve evidence and prevent avoidable coverage disputes.

Notify your insurer promptly

Report the collision to your own insurer as soon as reasonably possible. Ask whether the policy includes UM/UIM coverage and Medical Payments coverage.

Request:

• The declarations page
• The complete insurance policy
• All endorsements and amendments
• Any applicable written rejection or selection form for UM/UIM coverage
• Any applicable written rejection form for Medical Payments coverage

Review settlement requirements before signing a release

Before accepting a liability-policy-limit settlement or signing a release for the at-fault driver, notify your own UM/UIM insurer in writing.

A policy may contain notice, consent-to-settle, or subrogation-related provisions. Settling without meeting applicable policy requirements could affect a UIM claim.

The exact requirement depends on the policy language and circumstances. Do not assume that every case requires advance written consent. Instead, provide prompt written notice, review the policy, and consider obtaining legal advice before signing a release.

Review Medical Payments coverage

Colorado auto insurance policies are generally presumed to include at least $5,000 in Medical Payments coverage unless the named insured rejected that coverage in writing or in the same medium used to apply for the policy.

MedPay may help pay eligible, accident-related medical expenses regardless of fault. It is separate from liability coverage and UIM coverage.

The availability, amount, covered expenses, coordination with health insurance, and payment timing can depend on the policy. MedPay is not a substitute for liability coverage or UIM coverage, but it may provide a potential source of benefits while other claims are evaluated.

Check whether other coverage may apply

More than one policy or coverage source may potentially be relevant after a serious crash. For example, an injured person may be covered under a household policy or another policy under which they qualify as an insured.

This is highly policy-specific. It may depend on the policies involved, named insureds, resident-relative status, vehicle ownership, accident facts, applicable exclusions, and Colorado law.

Colorado law permits insurers to limit UM/UIM coverage to one payment per accident when a single policy or endorsement covers multiple vehicles for one premium. Whether a separate policy or another available coverage source applies requires review of the particular policies and facts.

Can you sue the at-fault driver?

An injured person may have the right to bring a negligence claim directly against an at-fault driver. A lawsuit may seek damages that exceed the driver’s insurance limits, but collecting on a judgment can depend on the driver’s assets, income, insurance, bankruptcy issues, and other legal considerations.

A person who carries limited insurance may have limited assets, but that is not always the case. A lawyer can evaluate whether a direct claim may be practical and whether other potentially responsible parties or insurance policies may exist.

Insurer duties in UIM claims

A UIM claim is a first-party insurance claim. Although the insurer is the policyholder’s own carrier, the insurer may investigate the collision, review treatment records, question causation, evaluate the medical necessity of treatment, and dispute the amount of damages.

Colorado law prohibits unreasonable delay or denial of covered insurance benefits. Under C.R.S. § 10-3-1116, a first-party claimant whose covered benefits were unreasonably delayed or denied may have a legal claim for remedies that can include reasonable attorney fees, court costs, and two times the covered benefit.

Whether an insurer acted unreasonably depends on the policy, the evidence available at the relevant time, the insurer’s conduct, and applicable law. A disagreement about the value of a claim does not automatically establish unreasonable delay or denial.

Legal help after an Aurora underinsured-driver crash

An underinsured-driver claim may involve multiple insurance policies, liability limits, UIM limits, MedPay benefits, settlements, releases, and deadlines. Reviewing available coverage early can help an injured person understand possible sources of recovery before making important settlement decisions.

If you were injured by an underinsured driver, an Aurora uninsured motorist accident lawyer can review the insurance issues involved and explain potential next steps.

For assistance reviewing a potential claim, contact Matlin Injury Law for a free, no-obligation consultation.