Last week Colorado’s auto insurance laws officially changed from a no-fault system to an at-fault system. On July 1, Colorado joined 37 states in having an at-fault insurance system, also called a tort insurance system.
Under no-fault insurance systems, drivers must pay for personal injury protection coverage (PIP). Under at-fault system, PIP coverage is gone and the insured is now libel for injuries to people in his or her vehicle and him or herself.
According to the State of Colorado Department of Regulatory Agencies’ Web site, www.dora.state.co.us, all policies issued or renewed on or after July 1, 2003, will be written as tort policies. However, if one’s policy has not expired, the current benefits are still in place until the time of renewal. It is possible to cancel no-fault insurance prior to renewal if one wishes and the insurance company agrees to the change.
Fort Collins’ Farmer Insurance agent Ben Morgan does not know how he feels about the change in the system, or what will happen in the future.
“I’ll let you know (how I feel) in about two years,” Morgan said.
According to the DORA’s Web site, most auto insurance companies will offer medical payments coverage, which will pay for medical bills incurred if one is at fault and injured in an auto accident. But if one’s expenses exceed the limits of the medical payments coverage, the negligent party (the party at fault) is responsible for all other costs.
Some of the media reported consumers would see a large drop in the cost of auto insurance, but Morgan does not see this taking place.
“Realistically, (the price will go down) 10 to 17 percent,” Morgan said. “And that’s just not including additional medical coverage. You should see about a 15 percent with adding the new medical coverage.”
Although Morgan sees the cost of auto insurance going down slightly, he believes the rise in health insurance costs will greatly make up for the decrease in auto insurance costs.
For senior civil engineering major Brent Good, the cost decrease is not what he looks forward to in the change.
“I think it will be easier to file a claim in an accident,” Good said.
This may be true. According to DORA’s Web site, if a negligent driver injures one, the majority of cases do not need to go to court. Most likely the auto insurance companies will settle on the accident. If the negligent driver does not have auto insurance and one has not purchased uninsured and underinsured motorist coverage, he or she is responsible for his or her medical bills.
With the increase of medical coverage needed Morgan suggests not changing policies before one is forced to.
“I suggest they keep no-fault until their policy renews” suggesting consumers purchase additional medical coverage equal to their health insurance and people without health insurance purchase the maximum amount of medical coverage, Morgan said.
For more information contact your insurance agent or Erin Toll, Esq., Director of Compliance, Colorado Division of Insurance at 303-894-7423 or firstname.lastname@example.org