Is Colorado a No Fault State?

Posted by: Mar 01, 2017By Steve Roberts

is colorado a no fault state

Colorado and No Fault Insurance

Simply put, Colorado is NOT a “No Fault” state. Instead, Colorado has a “traditional tort” liability system for auto insurance. That means fault determines who will pay for injuries resulting from car accidents.

Fault can be determined by negligence and recklessness. Negligence means carelessly driving without reasonable caution, while reckless driving means that the driver was willfully driving without reasonable caution.

What is No Fault Insurance?

Some states have legislation known as “No Fault” laws that govern liability in car accidents. Twelve US states require insurance policyholders to rely on a “no-fault” method of damage recovery. No Fault laws may seem a complex at first – but the concept is easy to grasp.

No fault laws limit injured parties from recovering damages. States with these laws require drivers to carry “no fault insurance.” This covers damages up to a certain amount regardless of fault in the car accident. That means if another driver is negligent and hits you causing damages, you still have to file a claim with your insurance company.

No-fault systems cover two types of losses:

  • Economic. These damages consist of medical bills and lost wages. Most no-fault systems allow injured parties to seek damages only when they exceed available first-party benefits.
  • Pain and Suffering. These are non-economic damages. No fault states only allow claims including pain and suffering when injuries are “serious.” States determine seriousness in one of two ways:
    • Monetary Threshold. A specific dollar amount must be spent before additional recovery is permitted.
    • Qualitative Verbal Threshold. Specific categories of injuries are identified which are considered sufficient for additional recovery

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The History of No-Fault Laws in Colorado

In the 1970s, Colorado enacted no-fault laws. In fact, 24 states put no-fault laws on the books during this time period. However, many states removed these laws throughout the years. Colorado’s repealed no-fault laws in 2003. The reason may be economic.

A study by RAND Corporation found that no-fault systems have a higher cost than traditional systems. The could be due to several reasons:

  • In many no-fault states, medical providers bill auto insurers before they bill standard medical insurance. This shifts costs from the medical insurance system to the auto insurance system.
  • In traditional systems, health insurers have developed methods for reducing costs. Auto insurers do not have this special expertise, and they are serving as medical insurers in no-fault states.

How Colorado Determines Liability

Colorado determines liability using “proportional comparative fault.”

This means that damages are awarded according to the percentage of fault. For example, if the damages come to a total of $200,00 and the victim of the accident is 20% at fault for the accident, their amount is reduced but 20%. So, in total, they receive $160,000. If you are found over 50% at fault, you cannot receive compensation.

However, if the negligent party is found to be over 50% at fault, they don’t receive any percentage of the damages either. Even then, if the victim is determined to be 20% at fault, their compensation will still be reduced by 20%–even if the other party does not get anything.

If both parties are equally at fault (50/50), then neither receive compensation.

Sometimes it’s easier to prove liability. For example, if the other driver was driving drunk, negligence will be easy to prove and can sometimes result in more compensation for you.

This is actually a fairly common phenomenon since 85% of car accidents in Colorado are related to alcohol.

Contact Us Today

Colorado is NOT a no-fault state. That means you are entitled to recover damages when a negligent driver hits you and causes injuries. For a free consultation on your case, contact our Denver car accident lawyers at the Law Office of Steve Roberts today.

Do you have more questions about Colorado car accidents? Download our guide to CO car accidents below!

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