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Denver Attorney's Guide to Bodily Injury and Underinsured Motorist Coverage

You may have seen terms like “bodily injury” and “underinsured motorist (UMI) coverage” in your insurance contract. Insurance companies are required by Colorado law to provide UMI coverage unless it is waived by the policyholder. But what do all of these terms actually mean, and more importantly, how do they affect your claim? Here is a Denver Attorney’s guide to help you understand the details.

Denver Attorney's Guide

Third-Party Coverage

Third-party, or bodily injury coverage, comes from the at-fault driver’s insurance company. In other words, this is the insurance policy of the person that hit you. Their policy dictates the amount of money available to recover (the “policy limits”). 


Colorado law requires that you carry $25,000 in liability insurance per person and $50,000 in liability insurance per crash. In other words, the minimum policy limits available are $25,000 per person, and $50,000 allocated to everyone in one particular crash with no one person exceeding $25,000. 


When an at-fault driver carries insurance as required by Colorado law, their insurance company “steps into their shoes” to defend the case. So when your attorney is negotiating with the defendant, in practice he or she is negotiating with the insurance company to try to find a settlement within the policy limits. 

If your damages are greater than the third-party policy limits, the case then turns to your own insurance coverage. 

First-Party Coverage

First-party, or underinsured/uninsured motorist (“UIM”) coverage, is your own insurance policy. Colorado law requires insurance companies to provide UIM coverage unless it is waived by the insured. That means that you will be offered UIM coverage, and unless you affirmatively turn it down, it is part of your policy. This is additional money available if your damages exceed the at-fault driver’s policy limits. 

UIM coverage is a good idea to carry. If you’re in a crash through no fault of your own, you may have damages that exceed the at-fault driver’s policy limits. Unfortunately, this is all too common. A person hurt by another’s carelessness or negligence causes serious injuries, but the at-fault driver is only required to carry $25,000 in liability insurance. Without UIM coverage, you may not be able to recover more than $25,000, leaving the victim in a difficult position. 

This can be a complicated area of law, which is why it is important to have an experienced personal injury attorney on your side. At Prager Law, we’re ready and willing to fight for you to get you all the compensation you deserve. 

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