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What is UM/UIM Insurance?

If you are injured in a car collision where the other party was negligent, one of the most important things for you to have is insurance.  Why is that?  In Colorado having auto insurance is mandatory, but you never know when a person is going to be carrying it or not (believe it or not there are a lot of drivers on the road who don’t have it and I know this from my time spent as a County Court Deputy District Attorney).  Another problem is that even if the other driver has insurance, our legislature has set the minimum amount of insurance a person can have at $25,000.  If you get hit by someone with no insurance, you will need to have a policy which includes uninsured coverage (UM).  If you get hit by someone that only has the minimum amounts of coverage, you may need underinsured (UIM) coverage if your injuries are greater than that person’s policy.  So check your insurance policy carefully.  Usually these types of coverage are included under the designation “UM/UIM” with in your declarations page (it’s a summary of your insurance coverage that you should receive with your bill) of the policy.  If you have the minimum amount of coverage, ie, $25,000, what that means is that if you have an accident and you need to use the uninsured portion of your policy, you will have $25,000 available to you for compensation.  If you have an accident with another person who only has $25,000 of Bodily Injury Liability coverage, you will have an additional $25,000 available to you if your injuries exceed that person’s Bodily Injury Liability Coverage.  With this in mind, you should be aware that it is not unusual for a person’s injuries to exceed a value of $25,000 and if you are one of the unlucky people who end up hospitalized and lose extended periods of time from work, well, $25,000 doesn’t even begin to cover the total harms and losses.  So consider the worst case scenario when buying auto insurance.  I have a policy which covers up to $250,000 in losses and I don’t consider that to be enough in the event of the worst case scenario, but I do think that it is the bare minimum anyone should carry.  Some of you may say “I can’t afford that much insurance” to which I say you can’t afford not to have it!

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