Colorado § 10-4-620 - Required coverage.

§ 10-4-620. Required coverage.

Subject to the limitations and exclusions authorized by this part 6, the basic coverage required for compliance with this part 6 is legal liability coverage for bodily injury or death arising out of the use of the motor vehicle to a limit, exclusive of interest and costs, of twenty-five thousand dollars to any one person in any one accident and fifty thousand dollars to all persons in any one accident and for property damage arising out of the use of the motor vehicle to a limit, exclusive of interest and costs, of fifteen thousand dollars in any one accident.

Source: L. 2003: Entire section added, p. 1561, § 3, effective July 1.

Editor's note: This section was originally numbered as § 10-4-617 in House Bill 03-1188 but has been renumbered on revision for ease of location.

ANNOTATION

Law reviews. For article, "The Enterprise Liability Theory of Torts", see 47 U. Colo. L. Rev. 153 (1976). For article, "The Responsibility of the Insuror Once a Driver is Given Initial Permission", see 15 Colo. Law 1041 (1986). For article, "Über Problems: Ride-Sharing Exclusions in Personal Automobile Insurance Policies", see 47 Colo. Law. 46 (Aug.-Sept. 2018).

Annotator's note. Since this section is similar to § 10-4-706(1)(a) as it existed prior to the 2003 repeal of part 7 of article 4 of this title, relevant cases construing that provision have been included in the annotations to this section.

Nothing in this section suggests the general assembly considered loss of consortium to be a separate bodily injury that must be insured against in all insurance policies. Thus an insurer need not offer either liability or uninsured motorist insurance which separately covers a loss of consortium claim to be in compliance with this section. Spaur v. Allstate Ins. Co., 942 P.2d 1261 (Colo. App. 1996).

An insurance policy is a contract that should be interpreted consistently with principles of contract law. A reviewing court should give the words of an insurance policy their plain and ordinary meaning unless the intent of the parties, as expressed in the policy, indicates a contrary intent. However, when the provisions are ambiguous, they are construed against the drafting party. Farmers Ins. Exch. v. Wiglesworth, 903 P.2d 659 (Colo. App. 1994), rev'd on other grounds, 917 P.2d 288 (Colo. 1996).

"Household exclusion" clause against public policy. A household exclusion clause, excluding coverage of family members residing in the same household, is void as against public policy. Meyer v. State Farm Mut. Auto. Ins. Co., 689 P.2d 585 (Colo. 1984) (decided prior to 1986 enactment of § 10-4-418 (2)(b)).

Physical damage waiver contained in automobile rental agreement was so significantly restricted it was unconscionable, and lessor could not enforce a limitation on such waiver which excluded damages caused when driver was under influence of drugs or intoxicants when it brought action against lessee to recover for total destruction of automobile which occurred while lessee was intoxicated. Davis v. M.L.G. Corp., 712 P.2d 985 (Colo. 1986).

Automobile lessor impermissibly attempted to limit the statutory requirements of subsection (1) which requires automobile liability coverage by conditioning its compulsory liability coverage for property damage on compliance with its lease's provisions. Davis v. M.L.G. Corp., 712 P.2d 985 (Colo. 1986).

Common-law obligations by contract may be altered by parties to bailment or lease of an automobile, provided such contract does not contravene public policy or violate a statute. Davis v. M.L.G. Corp., 712 P.2d 985 (Colo. 1986).

Initial permission from the primary insured to use the vehicle is all that is required to confer coverage. Wiglesworth v. Farmers Ins. Exch., 917 P.2d 288 (Colo. 1996).

The clause "exclusive of interest and costs" must be given meaning and therefore the minimum legal liability coverage mandated by this section means $25,000 of benefits plus any interests and costs attendant thereto. Bjorkman by Bjorkman v. Steenrod, 762 P.2d 706 (Colo. App. 1988), overruled in Allstate Ins. Co. v. Allen, 797 P.2d 46 (Colo. 1990).

Prejudgment interest is subject to the policy limits. Prejudgment interest is an element of damages included within the damages coverages of an insurance policy and subject to the policy limit for such coverage. Allstate Ins. Co. v. Allen, 797 P.2d 46 (Colo. 1990) (overruling Bjorkman by Bjorkman v. Steelrod, 762 P.2d 706 (Colo. App. 1988)).

Mandatory coverage of $25,000 exclusive of interest and costs establishes minimum applicable to initial amount of damages suffered and not exclusion from liability. Garceau v. Iowa Kemper Ins. Co., 859 P.2d 243 (Colo. App. 1993).

Where each of three identical vehicle insurance policies contained language limiting the insurer's liability to the maximum amount recoverable under any one policy, such provisions prohibited the "stacking" of liability coverage under the three policies. The fact that separate premiums were paid on each policy is not dispositive and does not alter the plain wording of the policies. Am. Standard Ins. Co. v. Ekeroth, 791 P.2d 1220 (Colo. App. 1990).

The provisions of this section and § 10-4-705 do not mandate a minimum coverage for every policy. Rather, the purpose of these statutes is to impose upon motor vehicle owners a mandated level of insurance coverage for their vehicles. Since the insurer limited its total liability under all three identical vehicle insurance policies to the requisite statutory minimum and since each policy therefore complied with the insured's statutory obligation, there was no conflict with this section and § 10-4-107. Am. Standard Ins. Co. v. Ekeroth, 791 P.2d 1220 (Colo. App. 1990).

This section and § 10-4-623 (1) deal with mandated minimum liability coverages and have no application to the crime exclusion in the insurance policy because the exclusion applies to supplemental coverage that is in addition to, and separate from, the mandatory coverage. Lincoln Gen. Ins. Co. v. Bailey, 224 P.3d 336 (Colo. App. 2009), aff'd, 255 P.3d 1039 (Colo. 2011).

Any construction of the policy's exclusion, if inconsistent with the Act, renders the exclusion void. Great Plains Ins. Co., Inc. v. Angerman, 833 P.2d 810 (Colo. App. 1991).

Exclusion in insurance policy for bodily injury or property damage caused intentionally by or at the direction of an insured does not violate the mandatory liability insurance statute or the state's public policy. Gov't Employees Ins. Co. v. Brown, 739 F. Supp. 2d 1317 (D. Colo. 2010).