If a driver hit you in Colorado and their liability insurance is not enough to cover your medical bills, lost wages, and other losses, your most likely source of additional money is your own underinsured motorist (UIM) coverage. Colorado insurers are required to offer uninsured and underinsured motorist coverage, and unless you rejected it in writing, you may have it on your own policy even if you never thought about it. A UIM claim is made against your own insurance company, but it is not the same as a collision or medical payments claim, and it works differently from the claim you make against the at-fault driver.
What "underinsured" actually means
Colorado sets minimum liability limits that every driver is supposed to carry. Those minimums are low compared to what a serious injury actually costs. A single ambulance ride, an emergency room visit, imaging, and a surgical consult can exhaust a minimum policy before anyone has talked about lost income or future care.
A driver is underinsured when they have liability insurance, but the available limits are less than the value of the harm they caused. That is different from an uninsured driver, who has no liability coverage at all, and different from a hit and run driver who is never identified. Colorado UM/UIM coverage is generally written to address all three situations, though the proof required is not identical in each.
An important detail about Colorado UIM coverage: it is generally structured so that your UIM limits stack on top of what the at-fault driver's insurer pays, rather than being reduced by that payment. In practice, that means recovering the at-fault driver's limits does not automatically wipe out your UIM claim. The specific language of your policy controls, and policies are not all written the same way.
How an underinsured motorist claim in Colorado usually unfolds
Most underinsured motorist cases move through roughly the same stages, though timing varies a great deal depending on how long treatment takes.
- The liability claim comes first. The at-fault driver's insurer evaluates the crash and the injuries. If the losses clearly exceed their policy, that insurer often offers its limits.
- Your UIM carrier is put on notice. Most policies require notice of a potential UIM claim, and many require the insured to give the UIM carrier a chance to weigh in before any settlement with the at-fault driver is finalized. Missing that step can create real problems.
- The at-fault driver's limits are paid. Once that settlement is properly handled, the UIM claim becomes the live issue.
- The UIM carrier evaluates the full value of the claim. It looks at medical records, billing, wage documentation, and the same liability questions the other insurer looked at.
- The claim resolves or it does not. If the carrier's number is acceptable, the matter settles. If not, the dispute proceeds under whatever the policy requires, which may mean arbitration or a lawsuit against the insurer.
The step people most often stumble on is the third one. Signing a release with the at-fault driver's insurer without following the notice and consent requirements in your own policy can jeopardize the UIM claim entirely. That is worth understanding before anything gets signed.
Other coverage that may apply
Underinsured motorist coverage is often the largest additional source, but it is not the only one.
- Medical payments coverage (MedPay). This pays medical bills up to a set limit without regard to fault, and it typically pays early, while treatment is ongoing.
- Health insurance. Health coverage frequently pays crash-related treatment. Health plans often assert a right to be repaid out of a settlement, which affects the net outcome.
- Multiple policies. Depending on policy language and household circumstances, more than one policy may potentially apply. This is a technical area, and the answer turns on the exact wording.
- Other responsible parties. If someone besides the driver contributed to the crash, such as an employer whose worker was driving on the job, there may be another liability policy in the picture.
- The driver personally. Suing an individual for amounts beyond their insurance is legally possible but often practically limited by what that person actually owns.
Deadlines that matter after a Colorado crash
For injury claims arising out of a motor vehicle accident, Colorado law generally provides a two year statute of limitations under C.R.S. 13-80-102, which is shorter than the three year period that applies to many other personal injury claims under C.R.S. 13-80-101. Missing the applicable deadline usually ends the claim no matter how strong it is.
An underinsured motorist claim adds a second layer. A UIM claim is a claim under an insurance contract, so the deadline analysis is not always identical to the deadline for suing the at-fault driver. On top of that, policies themselves contain notice requirements and cooperation requirements with their own timelines. Because two separate clocks can be running, and because one of them is set by a private contract rather than a statute, confirming the specific deadlines early is important. An attorney or a careful reading of the actual policy is the only reliable way to pin those dates down.
How fault and damage limits affect an underinsured motorist claim
A UIM carrier steps into a position similar to the at-fault driver's insurer, which means the same defenses tend to appear.
Comparative fault
Colorado uses modified comparative fault with a 50 percent bar. If an injured person is found 50 percent or more at fault, they recover nothing. Below that threshold, recovery is reduced by the assigned percentage of fault. Insurers, including your own UIM carrier, routinely argue that the injured person contributed to the crash by speeding, by not braking sooner, or by some other choice. Photographs, dashcam footage, witness names, and the police report all matter here.
Limits on noneconomic damages
Colorado caps noneconomic damages, meaning pain, suffering, inconvenience, and emotional distress, at roughly $642,180, which a court may raise to about $1,000,000 on clear and convincing evidence. Economic losses such as medical bills and lost earnings are treated separately. The cap can matter in a serious injury case where the value discussion is not only about coverage limits.
The insurer is still an insurer
Being your own carrier does not make the process automatic. A UIM carrier evaluates, negotiates, and sometimes disputes the claim. Colorado law does impose obligations on insurers regarding how they handle claims, and unreasonable delay or denial of benefits owed can carry consequences for the carrier. Whether that applies in any particular situation depends heavily on the facts.
Practical things that tend to help an underinsured motorist claim
- Locating the declarations page for every auto policy in the household, since coverage that exists is easy to overlook.
- Getting treatment promptly and following through, because gaps in care are the single most common argument insurers make about injury severity.
- Keeping documentation of missed work and reduced duties, not just medical bills.
- Being cautious with recorded statements and broad medical authorizations before understanding what is being asked.
- Not signing a release with the at-fault driver's insurer before the UIM policy's notice requirements are understood.
The bottom line
Being hit by a driver whose insurance is too small is frustrating, but it is not the end of the road. Underinsured motorist coverage in Colorado exists specifically for this situation, and it often stacks on top of the at-fault driver's limits rather than replacing them. The claim is still contested, still subject to comparative fault, and still governed by real deadlines, including the two year period under C.R.S. 13-80-102 for motor vehicle injury claims plus whatever the policy itself requires. Reading the actual policy language and understanding the sequence of steps before settling with the at-fault driver are what keep options open.
This article is general information about Colorado law and is not legal advice. Laws change and every case is different. Talk to a licensed attorney about your situation.