How UIM Works
Underinsured motorist coverage activates when the at-fault driver's policy limits are less than your damages. Your UIM coverage pays the difference between the at-fault driver's limits and your UIM limits.
Example
Your damages: $150,000. At-fault driver's limits: $25,000. Your UIM limits: $100,000.
- At-fault driver's insurance pays: $25,000
- Your UIM pays: up to $75,000 (the difference between $100,000 and $25,000)
- Total recovery: $100,000
Colorado UIM Rules
- You must exhaust the at-fault driver's policy limits before UIM applies
- Your insurer can require you to settle with the at-fault driver's insurer first
- Good faith requirements protect you against unreasonable delays