3.1 Colorado Auto Insurance Requirements

Mandatory Liability Coverage (25/50/15)

Under the Colorado Motor Vehicle Financial Responsibility Act, every owner of a registered motor vehicle must carry a complying liability policy. The statutory minimum bodily injury (BI) and property damage (PD) limits, unchanged for 2026, are 25/50/15.

Exam trap: The split limit applies per accident. If two claimants are each injured $30,000, a 25/50 policy pays at most $25,000 to each (subject to the $50,000 cap), leaving the insured personally exposed for the rest.

Proof of Financial Responsibility

Drivers must show proof at registration and upon a law-enforcement request. Acceptable proof includes a paper card or electronic proof displayed on a phone — Colorado statute expressly authorizes electronic verification. After certain offenses (uninsured driving, DUI, at-fault crashes without insurance), the driver must file an SR-22, a certificate filed by the insurer confirming continuous coverage, typically for three years.

Colorado's At-Fault / Tort System

Colorado is a tort (at-fault) state: the negligent driver (through their liability insurer) pays the injured party. Fault is allocated under C.R.S. 13-21-111, modified comparative negligence with a 50% bar.

• A claimant 0%–49% at fault recovers, but the award is reduced by their own fault percentage.
• A claimant 50% or more at fault recovers nothing.

Worked example: A jury finds damages of $80,000 and assigns the claimant 40% fault. Recovery = $80,000 x (1 − 0.40) = $48,000. If fault were 50%, recovery would be $0. Contrast this with a pure comparative state, where a 90%-at-fault plaintiff still recovers 10%.

Because Colorado is a tort state, the injured party's own collision coverage is not the primary source of recovery; the at-fault driver's liability policy is. This is why adequate liability limits — and UM/UIM to backstop the other driver's inadequate limits — matter so much when advising Colorado clients. Producers should routinely recommend limits well above the 25/50/15 floor, because medical inflation makes $25,000 per person inadequate for a serious injury, exposing the insured's personal assets above the policy limit.

First-Party Coverages: PIP History and MedPay

Colorado operated a no-fault PIP system until July 1, 2003, when the legislature let the no-fault act expire and returned to a tort system. PIP is no longer mandatory and is rarely sold today. The exam may test the historical fact and the current replacement: Medical Payments (MedPay) coverage.

Agents should explain MedPay coordinates with health insurance and fills gaps for deductibles and passengers who lack their own coverage.

Uninsured / Underinsured Motorist (UM/UIM)

Colorado insurers must offer UM/UIM in an amount equal to the policy's BI liability limits. The insured may reject or reduce it only by a signed written rejection; without one, UM/UIM defaults to the BI limit.

Colorado's excess-UIM rule (often called the Jordan result) means a claimant can collect the at-fault driver's full limit and then their own UIM up to its limit, instead of subtracting one from the other.

Penalties for Driving Uninsured

Driving without the required coverage is a class 1 misdemeanor traffic offense: a minimum $500 fine for a first offense (with higher minimums and possible jail on repeats), four license points, and license suspension until proof of insurance and reinstatement are filed. These create real client risk an agent should stress when a buyer considers going bare.

Optional Physical-Damage and Add-On Coverages

Beyond the mandated liability and offered UM/UIM, Colorado drivers commonly buy several optional coverages a producer must be able to explain:

Colorado is hail-prone, so comprehensive is heavily marketed; many carriers offer separate or reduced glass deductibles because windshield damage is so common on Front Range highways. A lender that finances or leases the vehicle will require collision and comprehensive as a condition of the loan, even though the state does not.