Q: I am reading CO Rev Statute 10-4-609 (UM/UIM) as my Insurance Co cannot "offset" what the at vault party's Insurance Co.
has paid in settlement. Am I correct? ie, At fault drivers insurance policy paid full amount of coverage $100,000.00. My future medical cost will be greater than that.
Thank you both for quick responses. So here is my scenario.
At fault party's insurance has paid policy max of $1000,000.00 I have an injury that requires "indefinite" Radio Frequency Ablation for the rest of my life. Our calculations for this is approximately $178,000.00 without inflation.
Then I have another question about anti stacking laws. We had two cars on this policy at the time of the accident....
A: You are correct in that Colorado law does not permit a UM/UIM insurer to offset what it owes to its insured by what has been paid by the liability carrier. I encourage you to visit our website page on UM/UIM coverage here: https://www.cookinjurylaw.com/uninsured-underinsured-motorist.html for some illustrations on how UIM coverage works.
Here a simple illustration:
assume you have $100,000 in Underinsured Motorist coverage (UIM coverage);
assume your damages are $125,000
assume the at-fault driver has $50,000 in liability coverage and they have paid that to you;
under this scenario, the at-fault driver was UNDERINSURED by $75,000. Because you have $100,000 in UIM coverage, your UIM carrier should pay you the remaining $75,000 of your damages. They cannot offset your $100,000 in UIM coverage by the $50,000 in liability coverage so that you only have an additional $50,000 available to you. That is contrary to Colorado law and public policy.
A: I understand why you might think that but unfortunately that is not the case. 1(c) states that UM/UIM "shall cover the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained." The statute recognizes that one may be fully compensated by the third party liability insurance. However, if there is a difference, then you can proceed with your UM/UIM insurance. The amount you can receive from UM/UIM cannot be offset by other coverage like medical payments.
A: For clarification. The maximum you can receive is the third party insurance limits, here $100,000, and your UM insurance limits. If your total damages are $150,000, your insurance can "offset" the amount they pay you by the $100,000 that the third party insurance paid. Your UM will then pay you $50,0000. Like Mr. Bradford said, they can't reduce your coverage, but your UM will only pay the difference between what you've received from the third party and the amount of your damages.
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