Insurance is not an easy subject to understand, but if you live in Colorado, you need certain minimums of coverage for auto insurance in order to be compliant with the law. Homeowners insurance doesn’t have the same required minimums, but it’s still a good idea to have it.
Minimums for auto insurance
If you own a car and you live in Colorado, you have to have at least liability insurance in the amount of $25,000 per person or $50,000 per accident for bodily injury coverage, and $15,000 minimum in property damage coverage in order to be compliant with the law. This protects you in the event you’re in an accident and are deemed at fault. Your insurance company will cover you for damages up to those amounts. Insurance experts recommend that you carry $100,000 per person or $300,000 per accident for bodily injury coverage if you can afford it, to further protect yourself.
Optional extras in regard to auto insurance
In addition to the above-mentioned liability insurance minimums, there are also two other types of auto insurance, comprehensive and collision insurance. If your car is newer than 10 years old, it’s a good idea to carry these types of coverage; they’re optional, in that you don’t have to have them by law, but if your car is damaged in an accident and you deemed at fault, collision insurance will cover you for repair or replacement of your car up to its current market value. Comprehensive insurance covers you in the event your car is damaged by a non-accident event like hail or vandalism.
You’re not required by law to carry homeowners insurance in Colorado, but if your home is financed, your lender may require it of you as a condition of offering you a mortgage. As with auto insurance, homeowners insurance protects your property against disaster like fire, hail, wind damage, theft, or vandalism. Liability insurance is carried as part of your homeowners’ insurance policy and protects you in the event someone is injured on your property and sues you for damages.