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If you live in Colorado, you probably know that the state has enacted insurance laws to help protect drivers from financial disaster if they are involved in an accident or other vehicle mishap. Driving without insurance could leave you paying for damages or injuries out-of-pocket—and it’s also illegal. Colorado car insurance requirements mean that every driver needs a minimum amount of liability coverage to drive on public roads legally. But there’s more than that to know, and Bankrate’s insurance editorial team did the legwork to help you understand the ins and outs of Colorado car insurance laws.

Car insurance laws in Colorado

Knowing the Colorado car insurance laws is helpful whether you are a current Colorado driver or are planning a move to the state. In Colorado, drivers are legally required to carry at least a minimum amount of liability insurance. If you cause an accident, liability insurance will pay for the other driver’s losses, like vehicle damages and medical expenses. It may also cover legal fees if another driver sues you.

State law requires all Colorado drivers to carry a minimum of:

You may see the Colorado auto insurance requirement expressed as 25/50/15. All Colorado drivers are required to carry proof of insurance in their vehicles and present it when requested by law enforcement. Proof of insurance is also required to register a car with the Colorado Department of Motor Vehicles, along with other documentation.

How can you qualify as a self-insurer in Colorado?

In Colorado, an individual can qualify as a self-insurer if they own more than 25 cars registered in their name. To become a self-insurer, candidates must apply for a certificate of self-insurance from the Colorado State Insurance Commissioner. This allows them to assume all financial responsibility if an accident occurs rather than relying on a traditional car insurance company.

Is Colorado a no-fault state?

Contrary to what some may believe, Colorado isn’t a no-fault state. It operates under ‘fault’ or ‘tort’ regulations, which means that the driver deemed responsible for an accident would be accountable for the damages incurred by the other driver. If you find yourself in a car accident in Colorado, you’d generally file a claim against the insurance policy of the driver who caused the accident to compensate for your damages. In states that follow a no-fault auto insurance system, every driver is required to submit a claim to their own insurance provider after an accident, regardless of who caused it.

Penalties for driving without insurance in Colorado

In the Centennial State, driving without valid car insurance isn’t just a minor oversight; it’s a serious offense with significant penalties. Colorado law is straightforward — motorist must have a current auto insurance policy that meets the minimum state requirements. If you choose to ignore this mandate and are caught, the consequences can be severe and long-lasting.

In addition to having four points added to your driver’s license for driving without insurance in Colorado, these are the other penalties you can expect if caught:

  • First offense: A first offense comes with considerable penalties. Colorado law imposes a minimum fine of $500 and license suspension until you can show proof to the DMV that you are insured.
  • Second offense: Penalties become steeper on a second offense. A second offense may result in a minimum fine of $1,000 and a four-month suspension of your driver’s license.
  • Third and subsequent offenses: If you’re caught driving without insurance for the third time or more, you could face a minimum fine of $1,000 and an eight-month license suspension.

In addition to these fines and suspensions, the Colorado court system may require you to complete up to 40 hours of community service. Furthermore, your vehicle may be towed or impounded.

Remember, these penalties are not just one-time inconveniences. They can have long-term impacts on your driving record, your insurance premiums and even your employability in some fields. To avoid potential penalties, it’s ultimately more cost-effective to ensure that you maintain the appropriate levels of car insurance.

Liability insurance in Colorado

The Colorado auto insurance requirement is 25/50/15. While purchasing liability-only coverage can help keep your insurance premium low, minimum coverage likely won’t offer sufficient financial protection in the event of an at-fault accident. Car accidents can be expensive and can lead to high out-of-pocket expenses.

For example, if you cause an accident that results in $30,000 in property damage, and you only carry the mandated minimum of $15,000 in property damage liability coverage, you would be responsible for paying the remaining $15,000 out of pocket. If you cause an accident that seriously injures another driver and they incur $50,000 or more in medical bills, you would be on the hook for costs that exceed your policy’s bodily injury liability limit.

Another aspect to consider is that minimum coverage does not offer any protection for your vehicle. If you accidentally hit your neighbor’s mailbox and your front bumper falls off, you would be responsible for all of the repairs. Minimum coverage insurance also does not cover hit-and-runs, theft or vandalism.

Additional auto insurance coverage options in Colorado

Colorado insurance laws only require liability coverage. However, many Colorado drivers purchase additional coverage types for more protection. Here are some other insurance coverage options that Colorado drivers can consider:

  • Collision coverage: Collision coverage pays to repair your vehicle after a covered accident. It may also cover damages from hitting stationary objects and rollovers.
  • Comprehensive coverage: Comprehensive coverage pays toward non-collision damages to your vehicle. Examples include theft, vandalism, falling objects, flooding and fire.
  • Roadside assistance: Roadside assistance typically provides towing, fuel delivery, tire replacement and battery services. Roadside assistance is typically inexpensive, and many major car insurance providers offer it.
  • Gap insurance: Gap insurance may be a good option for drivers who have a new leased or financed car. If your new car gets totaled in a covered accident, gap insurance covers the difference between its current value and the remaining loan balance.

Frequently asked questions

    • Finding the best Colorado car insurance company might depend on the type of vehicle you want to insure, the coverage types you need and how much you can afford to pay. It may benefit you to shop around for auto insurance and request quotes from several companies. When comparing quotes, it helps to evaluate each insurer’s coverage types, discounts and rates. It may also benefit you to make sure that each company you’re considering is financially sound.
    • There is not one company that offers the cheapest car insurance in Colorado for every driver. That’s because auto insurance rates vary and are calculated based on numerous factors, such as the type of vehicle you drive, your driving record and your location. A provider might offer low rates to one driver and much higher rates to another based on these individual factors. That’s part of why it is important to shop around.
    • Nationally, drivers pay an average of $2,542 per year for full coverage and $740 per year for minimum coverage. Coloradans pay, on average, $2,605 per year for full coverage and $579 per year for minimum coverage. As car insurance rates are unique to each driver, actual rates may vary from the average.
    • Knowing the right amount of car insurance to purchase can be challenging. One important factor is your budget. No one wants to pay more for their coverage than is necessary, but buying the minimum required for the law can backfire on you if you’re found to be at fault in a serious accident. If your car is on the newer side, or you have a loan or lease, you may want to consider optional full coverage or gap coverage. In the end, finding the best car insurance for your purposes is a matter of balancing your finances against your need to have robust coverage for you and your family.