No-Fault Colorado Auto Insurance Costs Drivers More
Tuesday, February 3rd, 2009
Auto insurance companies warn that a new bill in the Colorado state legislature could increase rates for motorists, claims Bob Mook of the Denver Business Journal. In 2003, the state switched to a tort system (where insurers pay a percentage of costs based on whose fault the accident was, going to court to settle disputes), but the Colorado No-Fault Motor Vehicle Insurance Act would reverse that change.
Governor Bill Ritter says that the tort system saves drivers about $322 per year on average, a 35% decrease from auto insurance rates under the no-fault system. A representative of the Rocky Mountain Insurance Information Association claims that Colorado auto insurance premiums have dropped from being the ninth-highest in the nation to 23rd-highest since the reform. According to Bob, insurance companies believe that no-fault insurance, where each insurer pays all expenses for their driver without assigning blame, is easily defrauded.
9 News Colorado reports that a new state law (which came into effect on January 1st) is likely to increase auto insurance rates for Colorado drivers. The law requires insurance companies to automatically enroll policy-holders into a MedPay plan that provides an additional $5,000 in medical coverage. Ever since Colorado repealed its no-fault auto insurance law in 2003, there have been many problems surrounding the reimbursement of medical costs caused by an accident. This program is intended to fix many of these issues. Consumers can only opt out via a written form.
