Tips About Car Insurance, What Does Car Insurance Cover?

Mar 19, 2019 | Car Insurance

Insurance companies spend a lot of money persuading consumers that they’re paying too much for the car insurance offered by their competitors. When it comes to insurance headaches, perhaps the only thing worse than the sneaking suspicion that you’re paying too much is finding out too late — after an accident, in other words — that the policy you have doesn’t provide the coverage you need.

Shopping for car insurance can be confusing and frustrating. Here are a few tips about the basics of coverage that can help you decide what you truly need to protect yourself and your loved ones. Finding the right kind of insurance for your situation can greatly increase your peace of mind, without taking a huge bite out of your wallet — and could very well save you money in the long run.


1. Liability insurance protects you in the event of a car accident that is determined to be your fault.

Liability insurance addresses two types of claims, those for bodily injury (such as medical bills) and property damage. Most states require a minimum amount of liability insurance that all drivers are expected to carry; in Colorado, that amounts to a limit of $25,000 per person for bodily injury, with a maximum of $50,000 per incident, and another $15,000 in coverage for damage to another’s property.

But medical costs and vehicle damage for higher-end models can easily exceed those limits. What’s known as 100/300/100 coverage ($100,000 bodily injury, up to $300,000 per accident, $100,000 property damage) is becoming standard.

2. Collision coverage pays for repairs to your car after an accident. If your car is totaled, it pays what the insurance company determines is the value of the car (less any deductible, of course). This coverage is usually required if you have an auto loan or some other form of lien on the vehicle.

3. Comprehensive coverage is for damage to your car that isn’t caused by a traffic accident — for example, the car is stolen, vandalized, or damaged by hail.

4. Uninsured/underinsured motorist coverage covers your losses from being hit by a driver who doesn’t have insurance. It also helps make up the difference if the at-fault driver is underinsured, meaning that the costs of the accident exceed that driver’s liability coverage.

In Colorado, insurance companies are required to offer uninsured motorist coverage for bodily injury, unless you formally waive that coverage in writing. The total amount of uninsured/underinsured motorist coverage you carry can’t exceed the limits of your own liability coverage.

5. Medical benefits coverage pays medical expenses for you and your passengers in the event of an accident, regardless of who is at fault. The terminology and conditions of this coverage vary from state to state; as with uninsured motorist coverage, it’s coverage you have to decline in writing in Colorado if you elect not to carry it.


Individual circumstances will determine which options are best for you, but there are certain essentials that all drivers should take into account. It makes no sense to skimp on liability coverage.

For example, when it typically costs just a few extra dollars a month to get the 100/300/100 coverage, which would protect your personal assets from being at risk in most accident scenarios.

There are also compelling reasons to carry uninsured/underinsured motorist coverage; the Insurance Research Council estimates that as many as one in eight drivers is on the road without insurance, putting others at risk of not being able to recover their losses unless they have such coverage.

Medical benefits coverage, or MedPay, can be a good idea, too. Many decline the coverage, figuring that their personal health insurance will cover any medical expenses they may incur. But MedPay can provide a welcome cushion if your arrangement with your health carrier involves high deductibles or out-of-pocket limits; just one trip to the emergency room could more than justify the additional premium cost.

If you’re looking for ways to save money — and who isn’t? — there are other ways to reduce the costs of your premiums. If your car is getting up there in miles and years, you might consider reducing or eliminating collision or comprehensive coverage; some experts suggest doing so when the cost of such coverage exceeds ten percent of the car’s book value. If you have another car at your disposal, you may not need rental reimbursement or other extras.

To sum up: Cost is important, but it shouldn’t be the only factor involved in determining what kind of car insurance you buy, or what company you choose. Getting the right coverage is crucial, and customer service and responsiveness should count, too.

One resource is the National Association of Insurance Commissioners, which provides information on its site regarding the financial health and rate of complaints for many insurance companies.


For more than thirty years the attorneys at Franklin D. Azar & Associates have helped thousands of injured people obtain complete and timely compensation for their losses. Our proven track record and expertise have allowed us to grow into the largest personal-injury law firm in Colorado, with offices in Denver, Aurora, Thornton, Fort Collins, Greeley, Grand Junction, Colorado Springs, and Pueblo. If you’ve been injured in a car, truck, or motorcycle accident, you may be entitled to compensation.  Please call the car accident attorneys at FDAzar day or night at 800-716-9032 or contact us here for a free consultation and no-obligation evaluation of your case.