Final answer:
The minimum liability coverage required in Colorado for bodily injury or death of more than one person in any one accident is d) $50,000, according to state law. This demonstrates how insurance coverage works based on shared risk among policyholders.
Step-by-step explanation:
The question is asking for the minimum amount of liability coverage required in Colorado for bodily injury or death of more than one person in any one accident. According to Colorado law, the minimum liability coverage for bodily injury or death of more than one person in any one accident is $50,000. This type of coverage is part of what is typically known as a split-limit insurance policy. The policy provides different amounts of coverage limits per person injured and per accident, as well as for property damage.
To understand how this works in practice, consider a simplified example with 100 drivers. Suppose that in one year, 60 drivers have minor damages costing $100 each, 30 drivers have medium-sized accidents with costs averaging $1,000, and 10 drivers have large accidents costing $15,000 each. The total damage would amount to $186,000. If each driver pays a premium of $1,860 annually, the insurance company collects the necessary funds to cover the accidents for that year, demonstrating the shared risk mechanism of automobile insurance.