What is underinsured motorist coverage (UIM)?

Underinsured motorist coverage (UIM) is an optional form of auto insurance in Colorado that protects you when the at-fault driver's liability insurance isn't enough to cover your damages. UIM coverage pays the difference between what the at-fault driver's policy covers and your actual losses—up to your policy limits. For example, if you have $100,000 in damages and the at-fault driver only has $25,000 in coverage, your UIM policy (if sufficient) would cover the remaining $75,000. Colorado law requires insurers to offer UIM coverage equal to your liability limits, though you can decline it in writing. Given the number of underinsured drivers on the road, UIM coverage is a smart investment.