Uninsured/Underinsured motorist coverage provides financial help when the careless driver caused more harm than his or her liability coverage. Since August 2008 Colorado enables insureds to "stack" the amount of their Underinsured (UIM) coverage on the amount of the careless driver's coverage limit. If the careless driver has no liability coverage, then the injured insured qualifies for Uninsured (UM) coverage designed to pay the insured for whatever damages the insured could recover against the careless driver, except for punitive damages. UM/UIM coverages are not mandatory but insurers must give insureds the opportunity to buy the coverage on a dollar-for-dollar basis for whatever bodily injury (BI) coverage they buy in case they make a mistake and hurt others.
Here is an example of how UM/UIM coverage works. If the at-fault party has no coverage, then the injured insured seeks full amount of UM benefits from the insurer. If the careless driver has for example $25,000.00 in coverage, the insured can "stack" whatever amount of UIM limit purchased onto that amount. If the damages for example, exceed the $25,000 limit, if that is the policy limit, then the insured seeks recovery up to the UIM benefit limit. Colorado law caps damages for non-economic losses at $468,010 currently, with no cap for economic losses. The insured can let the insurer know the insured's opinion for how much harm ensued and invite the adjuster for an explanation in return for how the carrier reaches its decision on the claim. The insurer should obey the Unfair Claim Settlement Practices statute, C.R.S. §10-3-1104 (1) (h) and C.R.S. §10-1-101 and treat the insured in good faith by explaining the claim decision based on the law, facts of case and policy language.
If the insurer neglects to follow that industry standard, then the insured may seek for the unexplained claim denial and obtain twice the covered amount plus attorney fees or more. If the insurer violates the industry standard with a material indifference to available information, the insured can seek recovery for the emotional harm caused from the bad faith delay or denial of benefits.
If you have questions or concerns about UM/UIM coverage, insurer claim handling behavior or conduct, please call or email today. The highly skilled attorneys at the Kaudy Law Firm are experts in handling automobile injury cases and are here to help.