Colorado Car Insurance Laws: Minimum Coverage, Penalties and SR-22

Every owner who drives or permits a vehicle to be driven on Colorado highways must have a complying policy with liability limits of at least $25,000 for bodily injury or death of one person, $50,000 for all persons in one accident, and $15,000 for property damage (25/50/15). A person with more than 25 vehicles registered in their name may instead qualify as a self-insurer with a certificate from the Insurance Commissioner. Policies must also include $5,000 of medical payments coverage unless the named insured rejects it in writing (or in the same medium used to apply).

Colorado is an at-fault (tort) state: required liability insurance covers bodily injury to another person or damage to another's property when the insured is at fault for an accident. Medical payments coverage ($5,000 unless rejected) pays the insured driver's and passengers' medical expenses regardless of fault.

Auto liability policies must include uninsured/underinsured motorist (UM/UIM) bodily injury coverage unless the named insured rejects it in writing (a transportation network company cannot reject it for periods when its driver is on a prearranged ride). Before issuing or renewing, the insurer must offer UM/UIM limits equal to the insured's bodily injury liability limits (it need not offer higher). After the insured selects limits or declines, the insurer need not re-offer at renewal, though the insured may request more coverage in writing. UM/UIM pays the difference between the at-fault driver's liability limits and the damages, up to the UM/UIM limit, and may not be reduced by setoffs from other coverage such as medical payments or health insurance.

After an accident, or when asked during a traffic stop or investigation, the owner or driver must present to the officer immediate evidence of a complying policy or self-insurance certificate; this may be shown on a cell phone or other electronic device, and the officer may not look at other contents of the device. Insurers must give insureds a proof-of-insurance card or certificate, which may be paper or electronic. A charge is dismissed if the person produces in court a policy that was in effect at the time; the court clerk may also verify coverage through the state's uninsured motorist identification database.

Driving (or letting your vehicle be driven) without required insurance, or failing to present proof when required, is a class 1 misdemeanor traffic offense with a mandatory minimum fine of $500 for a first offense; the court may suspend up to half the fine if the person shows they have since obtained insurance. A second or later conviction within five years carries a mandatory minimum fine of $1,000 (the statute says this minimum may not be suspended, though it also lets the court suspend up to half of the fine on proof that insurance has been obtained) plus any jail imposed under the misdemeanor traffic penalty statute. The court may also order at least 40 hours of community service. A person convicted of driving uninsured must file proof of future financial responsibility (SR-22) for three years; if it is not filed within 20 days of notice or lapses, the driver's license is suspended until proof is provided.

A person convicted of driving uninsured must file and maintain proof of financial responsibility for the future (commonly an SR-22 filing from an insurer) for three years from the date of conviction. The Department of Revenue sends notice; if proof is not provided within 20 days, or if it later lapses or becomes invalid, the director suspends the driver's license until proof is provided. Proof may be given by a liability policy, a bond, a deposit of money, or securities, and generally must be kept for three years from the date last required (time when the person was not licensed counts toward the three years).

Once a policy has been in effect 60 days (or if it is a renewal), the insurer may cancel only for: nonpayment of premium; suspension or revocation during the policy period (or the 180 days before a renewal) of the license or registration of the named insured, a household member or a regular driver; a knowingly false statement on the application; or a knowingly and willfully false material statement on a claim. Cancellation notice must be mailed or delivered at least 30 days before the effective date, or at least 10 days for nonpayment; the insured may request the reason in writing. To nonrenew, the insurer must give at least 30 days' advance notice, and must give the reason in writing within 20 days if the insured asks. An insurer may not refuse to write or renew required coverage solely because of age, race, creed, color, religion, sex, sexual orientation, gender identity or expression, national origin, ancestry, residence, marital status or lawful occupation (including military service), or solely because another insurer canceled or refused the person.

Colorado permits credit-based insurance scoring but requires disclosure: insurers using new or updated credit information must notify applicants or policyholders, explain on request the main credit characteristics affecting the insurance score, and give Fair Credit Reporting Act adverse-action notices (including the reporting agency's contact information and the right to a free report and to dispute errors). Insurers may not refuse to write or renew required auto coverage solely because of age, race, creed, color, religion, sex, sexual orientation, gender identity or expression, national origin, ancestry, residence, marital status or lawful occupation. State law also provides a premium reduction for drivers 55 or older who complete an approved driver's education course.

Colorado has no fixed percentage: a "salvage vehicle" is a flood-damaged vehicle, a vehicle branded salvage by another state, or a vehicle damaged by collision, fire, flood, accident or similar occurrence (excluding hail damage or theft) to the extent the insurer (or someone acting for the owner) determines it to be a total loss, or the cost to repair it for legal road use exceeds its retail fair market value just before the damage. Insurers must use a fair and consistent method with a credible valuation source to determine a total loss, may not shop among valuation sources only to find the lowest amount, and must pay title fees, sales tax and other transfer or registration fees associated with a total loss.

A seller must deliver the certificate of title, properly transferred, to the buyer; the buyer acquires no ownership right until receiving it. A paper title is required if either party is outside Colorado or the buyer pays entirely in cash. Sellers may voluntarily report the transfer to the Department of Revenue or an authorized agent within five business days. The buyer must register the vehicle within 60 days after purchase. The title application fee is $7.20, in addition to registration fees. For transfers by inheritance or operation of law, a new title may be issued on surrender of any available title and proof of ownership or a court order.

A new resident with a valid license from the previous state is exempt from getting a Colorado driver's license for 30 days after becoming a resident. Vehicles must be registered in Colorado within 90 days after the owner becomes a resident, with documentation of the previous registration and evidence of the date residency began; registering later means paying prorated registration taxes and fees back to the month residency began.