Auto insurance is not required by law in all 50 states. Colorado drivers however are still obligated to carry some form of coverage per the Financial Responsibility Act (FRA). The minimum liability limits for Colorado are set at $25,000 per person and $50,000 per accident in Bodily Injury Liability (BIL) and $15,000 in Property Damage Liability (PDL).
Fine to Drivers:
Drivers may be subject to a fine if caught driving without any insurance or proof of financial responsibility. But more importantly, drivers who lack proper coverage could still be financially responsible for damages resulting from an accident. Auto Insurance can give you peace of mind knowing that no matter what happens on the road, your investment is protected. Not having coverage could result in thousands of dollars of expense to you, not to mention the financial burden associated with any injuries caused by an accident.
Insurance of Colorado Drivers:
Auto insurance is also required for Colorado drivers who use their vehicles as collateral on loans or leases. If your car was totaled in an accident and you still owed money on the loan, the lender would require that you purchase comprehensive and collision insurance to cover the remaining balance on your financed vehicle.
Colorado requires automobile liability coverage even for those driving mopeds or motorcycles Your policy must include uninsured motorist bodily injury (UM) protection of $50,000 per person/$100,000 per accident. As mentioned above Colorado does not require drivers to carry personal injury protection (PIP). However, if you do carry Medical Payments (Med Pay) coverage on your policy, the limits must be at least $3,000 per person.
It is also worth mentioning that Colorado does not require drivers to purchase comprehensive or collision coverage (although lenders may still require it), but it DOES require drivers to carry certain minimum amounts of liability insurance whether they are financing or leasing their vehicles. As mentioned above, this amount is $25,000 in Bodily Injury Liability and $15,000 in Property Damage Liability.
The only way around Colorado’s compulsory insurance laws would be to file an SR-22 form with the DMV certifying that you have acquired sufficient financial responsibility for the given period. Although filing an SR-22 can increase your insurance rates, proving to the state that you are carrying enough liability insurance reduces your risk of receiving a fine.
SR22 Insurance is an enhanced version of a regular car insurance policy because it consists of higher security measures. The SR-22 certificate may also be known as FR-44 in some states along with other names like SR26 or SR-50. However, these terms all stand for the same type of proof that one has purchased high-security coverage. They are required by the Department of Motor Vehicles (DMV) if you have been convicted of certain driving offenses such as Driving Under the Influence (DUI), Driving without Insurance or Driving Without a License, etc. Such violations will leave you with traffic infractions on your driving record and you will have to show proof of financial responsibility for a certain period of time.
Detail of SR22 Insurance:
SR22 Insurance is designed so that the holder has minimum security measures in place, although it is a more costly variation compared to other policies. The SR-22 certificate has extra security measures as well as a higher deductible than regular insurance policy which makes the automobile less vulnerable to damages and robbery. An SR-22 form increases your premium rates since you are being seen as an unsafe driver by insurance companies. It also means that you were charged with driving without any car insurance before which shows negligence on part of the insured person who ignored laws and regulations. Driving uninsured or underinsured can result in hefty fines and even license suspension; those who provide false information could also be charged with perjury in certain states.
An SR22 filing is usually required when you accumulate too many driving violations or when your current insurer wants to cancel your policy due to high risk. This type of insurance has a limited coverage period, depending on the number of violation points you’ve accumulated during the past three years. The SR-22 form is not actually an insurance product that can be purchased in advance; instead, it certifies that you meet state requirements for having secured financial responsibilities by another means (such as car insurance). However, this will only last for a specific time frame and if it expires before you find alternative means of financial responsibility, then the process must happen again.
The most popular misconception about SR-22 Insurance is that its holder is not allowed to be involved in accidents or have moving violations, but that is only true if the insured person is required to maintain an SR-22 for three years. If you are required to have an SR-22 filing for a specific amount of time, it can cost more than your regular insurance policy because it includes higher security measures and extra deductibles. The key difference between the SR-22 filing requirement and purchasing an SR-22 Insurance product is that the latter will last until you find alternative means of securing financial responsibility, while the former requires you to keep making filings with your state DMV office on a regular basis for as long as requested by the Commissioner.
An SR22 form must contain information about vehicle liability limits, the current coverage carrier name and policy number, the name of the insurance company representative who is authorized to sign for your coverage, and information about the policyholder. In some states, SR22 Insurance is also known as FR-44 which stands for “Financial Responsibility” number 44 signifying that this type of liability insurance provides $20K in car accidents and $10K per person/$20K total in bodily injury claims.
The SR22 filing requirement applies when you receive a moving violation or if you were caught driving without insurance or without a license. However, it does not mean that you must purchase an SR22 Insurance product; instead, you can use an existing policy with enough liability limits to meet state requirements (usually $25/50/15). For example, most standard policies provide enough coverage for this purpose unless of course, you have a low liability limit of around $10,000 which might not be enough to cover injuries and damages. In most cases, SR-22 Insurance is used as an extension to the current policy so that it can meet the higher security measures required by your state’s DMV office. Usually, the process is completed online or over the phone and all you need is a proof of insurance letter along with a check for your premium payments.