As in every other state, drivers and vehicle owners in Colorado are required to purchase and carry active automobile insurance when driving. The state outlines basic minimum levels of insurance that every driver must meet. Individuals are able to select insurance coverage beyond these minimums at their discretion. The reason for such a law is to protect you from unnecessary financial loss in the event of an automobile accident.
One of the ways that the state manages insurance coverage by drivers is through a Motorist Insurance Identification Database. This database is a collaborative effort by multiple state agencies. According to the State of Colorado, the Department of Motor Vehicles submits vehicle registration data to the MIIDB on a daily basis. In addition, all motor vehicle insurance companies submit driver insurance data to the MIIDB on a weekly basis. These two sets of information are cross-referenced to identify gaps.
Insurance companies that fail to provide adequate or on-time reporting as per the law may be liable for financial penalties. As all information is provided, the DMV runs reports that highlight any delinquencies or failures to carry insurance. These reports are provided to the Colorado Department of Insurance.
Law enforcement agencies are also allowed to have access to information from the database. The goal of the database is to reduce or, ideally, eliminate the problems associated with uninsured motorists. While mandating and monitoring insurance coverage is helpful, you should always be aware that other risks can be posed by drivers who are underinsured meaning that their coverage levels fail to compensate for the full cost of an accident they cause.
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