Uninsured vs. Underinsured Motorist Coverage in Colorado

By the FigureMyTax Editorial Team · How we calculate

Colorado's uninsured motorist coverage includes underinsured coverage. It pays the difference between the at-fault driver's liability limits and your damages, up to your limit, and the named insured can reject it in writing.

One coverage

C.R.S. 10-4-609(4) says uninsured motorist coverage includes coverage for damage for bodily injury or death an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle, and an underinsured motor vehicle is a land motor vehicle insured or bonded for bodily injury at the time of the accident. There is no separate underinsured purchase.

How much it pays

The coverage is in addition to any liability coverage and covers the difference, if any, between the limits of that liability coverage and your damages, up to the maximum coverage you bought, excluding exemplary damages (subsection (1)(c)). It is not reduced by a setoff from liability insurance, medical payments, health insurance or other UM/UIM insurance.

The offer and the rejection

A liability policy delivered in Colorado must provide UM coverage in at least the limits set in C.R.S. 42-7-103(2), which are $25,000 per person and $50,000 per accident for bodily injury, unless the named insured rejects it in writing. Before issuing or renewing, the insurer must offer UM coverage equal to your bodily injury liability limits, though it need not offer higher (subsection (2)).

When a driver counts as uninsured

Under subsections (6) and (7), an alleged tortfeasor is deemed uninsured, only to let you receive UM payment, if the tortfeasor cannot be located for service of process after a reasonable attempt and service on the insurance carrier is determined ineffective, or the police report fails to disclose the insurer and the insurance is not actually known to you. That does not void the tortfeasor's policy if they were actually insured.

Excess UIM and exhaustion

In USAA v. Wenzell (2026 CO 25), the Supreme Court held that all UIM insurers, primary or excess, have a duty to evaluate a claim, and that an exhaustion clause in an excess UIM policy is enforceable only when exhaustion is based on the policyholder's undisputed damages. Do not assume you must collect from another UIM policy first.

Deadlines and next steps

The tort claim against the at-fault driver for a motor vehicle injury has a three-year limit (C.R.S. 13-80-101(1)(n)); ask an attorney how deadlines apply to your claim against your own insurer. Stacking is a separate question; see our statute and case post and the stacked versus unstacked explainer, then use the Colorado UM/UIM stacking calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Colorado's rules apply to your specific case with a licensed Colorado attorney.