C.R.S. 10-4-609: what the statute requires
Colorado auto insurers must provide coverage protecting people insured under the policy who are, in the statute's words, "legally entitled to recover damages from owners or operators of uninsured motor vehicles" (C.R.S. 10-4-609(1)(a)(I)).
You can turn that coverage down, but only in a specific way. The statute permits rejection only if the named insured rejects it in writing. A rejection that does not meet the statute's requirements may be invalid, which can mean coverage you believed you did not buy is still there. We read the rejection language before anyone assumes there is no policy to draw from. Drivers working for a transportation network company cannot reject the coverage at all during a prearranged ride.
On the underinsured side, the statute says the coverage "shall cover the difference, if any, between the amount of the limits of any legal liability coverage and the amount of the damages sustained." It then adds a sentence that matters enormously: "The amount of the coverage available shall not be reduced by a setoff from any other coverage." In plain terms, Colorado UIM sits on top of what the at-fault driver's carrier pays, and is not reduced by it.
Whether limits from more than one vehicle or policy can be combined is a separate, fact-specific question. The statute allows a single policy or endorsement issued for a single premium covering multiple vehicles to be limited to applying once per accident, so the answer turns on the declarations pages, how premiums were charged, and the policy wording.
The four situations where UM/UIM applies
The at-fault driver had no liability insurance at all. Your UM coverage can become the only practical source of recovery.
Hit-and-run. The driver left before you could identify them. Under C.R.S. 10-4-609(6), an alleged tortfeasor is treated as uninsured where the tortfeasor cannot be located for service, or where insurance coverage cannot be identified through reasonable effort.
A driver who caused the crash without touching you. Someone forces you off the road or into another lane and keeps going. Recovery may be available, though corroborating evidence such as an independent witness or video is typically expected.
An underinsured driver. The other driver carried coverage, but the limit is below your documented losses. Their carrier pays what it owes, and the UIM claim addresses the gap up to your own limit.
The filing deadline and comparative fault
Colorado UM/UIM claims run on C.R.S. 13-80-107.5, the statute the Colorado Supreme Court applied in Pham v. State Farm Mutual Automobile Insurance Co., 2013 CO 17. The general period is three years after the cause of action accrues. The statute also supplies extensions tied to the underlying claim: for UM, two years after the insured knows the particular tortfeasor is not covered; for UIM, two years after the insured received payment of a settlement or judgment. It sets a floor as well, providing that in no event shall the insured have less than three years after the cause of action accrues.
Accrual is not automatically the crash date. Subsection (3) ties it to when both the injury and its cause "are known or should have been known by the exercise of reasonable diligence."
Which deadline governs a particular claim depends on its procedural history, and your policy may impose a shorter contractual notice requirement on top of the statute. Missing a notice provision can hand the insurer a defense, so the deadlines should be identified early, never assumed.
Colorado also applies modified comparative negligence under C.R.S. 13-21-111. Recovery is permitted where the claimant's negligence "was not as great as the negligence of the person against whom recovery is sought," so a claimant found 50 percent or more at fault recovers nothing, and a lower percentage reduces the award proportionally. On a UM/UIM claim your own insurer is the party arguing your fault share upward, which is one of the things that makes these claims different.
