Another change in the law stops insurance companies from using "anti-stacking" language when writing a policy. Prior to the new law, insurance companies could collect premiums for UM/UIM coverage on multiple policies covering multiple cars in the same household. However, they would not allow the policy holder to use these multiple coverages at the same time.
Example: Andrew and Samantha were both driving on the interstate when Samantha rear-ended Andrew's car because she was distracted while talking on her cell phone. Samantha was uninsured. As a result of the Denver uninsured Car Accident, Andrew had medical expenses and lost wages totaling $250,000. In addition to his liability coverage, Andrew had purchased and paid premiums on three separate $100,000 UM/UIM policies for each of his three cars for a total of $300,000.
Conclusion Before January 1, 2008: Andrew's insurance policy contained anti-stacking language which allowed the insurance company to limit Andrew's coverage to only $100,000 of UM/UIM benefits on one car policy despite the fact that Andrew paid for UM coverage on 3 different vehicles, paying premiums for $300,000. His coverage was $150,000 short.
Conclusion After January 1, 2008: Under the law change, Andrew was able to combine or "stack" his three policies for a total of $300,000 which was more than enough to cover his $250,000 in medical expenses and lost wages.
Many Colorado insurance companies continued to sell multiple policies of UM coverage in a single household and continued to use and enforce "anti-stacking" provisions even after the Colorado Supreme Court ruled this essentially unnecessary in DeHerrera v. Sentry Insurance Company, 30 P.3d 167 (Colo. 2001). In DeHerrera, the Supreme Court held that Sentry Insurance was incorrect in its reading of Colorado Revised Statutes 10-4-609. The Supreme Court instructed Sentry Insurance (and by implication all of the other insurance companies writing policies in Colorado) that UM/UIM benefits follow the person and not the vehicle. Additionally, the Court stated that one premium is sufficient to cover an entire family of drivers compared to one premium per car.