Colorado vehicle owners are required to maintain financial responsibility. This financial responsibility comes in two ways only, a) Self-service insurance when you own more than 25 vehicles, this is intended for companies, fleet owners, auto rental businesses, etc. and b) Liability coverage.

For private owner vehicles, the state of Colorado requires the following minimum liability insurance:

• $25,000 for one person bodily injury
• $50,000 for accident for bodily injury
• $15,000 for property damage

Starting in January 1st, med-pay coverage is required by the state (this will cover as much as $5,000 for medical costs after the accident.)

Vehicles that don't require auto insurance or liability insurance are ATVs, go-karts, boats, private planes and snowmobiles.

Proof of insurance is required to be carried with the vehicle at all moments; this proof can be a certificate of self-insurance and/or the proof of insurance card your insurer must provide you with. Also a legal letter from the insurance company can be used as a proving method.

Not carrying with you a proof of liability insurance can result in fines from $500 to $1000 and the addition of points to your driver's license up to its suspension for several months.

In addition, the state of Colorado requires a limit of $15,000 per accident in the concept of Property damage liability. This coverage pays for damage you may cause to other's vehicle and/or property, such as walls, fences, public street lights, stop signs, etc. Property Damage Liability is usually referred to as PD.

Beginning in January 1st 2009, insurance carriers in Colorado are required to offer Medical payments coverage for $5,000. This can be later accepted or rejected in written, internet or phone call. If you don't request it to be removed, it will be added to your coverage. On the other hand, if you request it not to be included, it will be removed.

It is required for insuring companies to offer for Uninsured/Underinsured motorist coverage, the same amount you have selected for bodily injury, therefore, minimum will be 25/50 and go up to the amount you had previously agreed with your insurer.

Colorado vehicle owners may also opt to own Comprehensive and Collision coverage. Comprehensive coverage will pay for those events not related to a driving collision, such as earthquakes, floods, fires, falling debris etc, regarding weather events. Also it covers you from vandalism and accidents with wildlife (very useful for areas with wildlife on the roads). The state of Colorado does not require this coverage, but banks may consider it when your car is under a loan.

Collision coverage, by definition, will help pay for collision damages. But, unlike your Liability policy, which only pays for damages caused to any but the insured, Collision coverage pays for the insured property damage, no matter if it is caused in a car accident or simply by hitting a tree or a static element in the parking lot. Usually when loaning a car, your bank will require you purchase this coverage.