Chapter 2 - § 2.2 • STATUTORY REQUIREMENT FOR INSURERS TO OFFER UM AND UIM COVERAGE

• Jurisdiction: Colorado

§ 2.2 • STATUTORY REQUIREMENT FOR INSURERS TO OFFER UM AND UIM COVERAGE

C.R.S. § 10-4-609(1)(a) provides that no insurance policy providing liability coverage for automobiles or motor vehicles licensed in Colorado shall be issued unless the policy provides coverage, with the minimum limits set in the Financial Responsibility Act, C.R.S. § 42-7-103(2), for bodily injury, sickness, disease, or death, for the protection of persons legally entitled to recover damages from the owners or operators of uninsured motor vehicles.

There are two exceptions to this requirement to include at least minimum UM coverage in any policy. First, C.R.S. § 10-4-609(1)(a) provides that "the named insured may reject such coverage in writing." Second, C.R.S. § 10-4-609(1)(b) states that "subsection (1) shall not apply to motor vehicle rental agreements or motor vehicle rental companies."

Under the former No-Fault Act, C.R.S. § 10-4-712(3)(b), an insurer was deemed to have complied with the requirements of C.R.S. § 10-4-609(1) "if the named insured . . . rejected the uninsured motorist coverage in writing." Once rejected in writing, UM coverage continued to be excluded "until such time as the insured requests that the insurer provide uninsured motorist coverage." Furthermore, C.R.S. § 10-4-712(3)(b) stated that once UM coverage was rejected in writing, an insurer had no further duty to offer UM coverage even though "vehicles insured under the policy have changed" or the policy is reinstated, substituted, amended, altered, modified, replaced, or renewed. When the No-Fault Act was repealed, the legislature enacted C.R.S. § 10-4-623(3), which is substantially similar to former § 10-4-712(3).

Insurers must also offer their insureds the opportunity to purchase UM coverage with limits higher than the minimum limits required by C.R.S. § 10-4-609(1)(a). Under the former version of C.R.S. § 10-4-609(2), before an insurance policy was issued or renewed, an insurer was required to offer the opportunity to obtain such higher limits, but an insurer was not required to offer UM coverage with limits "higher than the insured's bodily injury liability limits or one hundred thousand dollars per person and three hundred thousand dollars per accident, whichever is less." Under the revised version of § 10-4-609(2), an insurer must "offer the named insured the right to obtain uninsured motorist coverage in an amount equal to the insured's bodily injury liability limits, but in no event shall the insurer...