It now could be your fault | SummitDaily.com
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It now could be your fault

State Rep. Keith King and State Sen. Andy McElhany

Colorado’s auto insurance consumers cried out for rate relief this year, and the Republican majorities in the House and Senate responded.

New legislation, which we sponsored, will replace Colorado’s current no-fault auto insurance, which has given us some of the highest premiums in the country, with a “tort” or fault-based type of insurance.

When Coloradans renew their auto-insurance policies after June 30, they will see substantial reductions in premium costs. Some insurance companies are predicting a 20 to 25 percent drop, which would be a savings of about $250 per year for the average policyholder.



When you consider that no-fault premiums skyrocketed by 25 to 30 percent in the last year, and there could well have been another huge increase next year had no-fault remained in place, the savings are even more dramatic.

The Legislature adopted no-fault in 1974 with the best of intentions. Time has proven this to be a failed experiment. Instead of a fairer system and fewer lawsuits, no-fault in practice led to sky-high premiums, claims abuses, lawsuits and constant legal wrangling over the interpretation of the law.



In effect, we had a dual system that was the worst of both worlds. An injured person could collect no-fault benefits and also file a lawsuit against the driver who caused the accident.

As a result, policy holders were required to pay for $130,000 in extra health coverage. In theory, this should have reduced lawsuits and sped up the claims process. In practice, it did the opposite.

During the time Colorado had no-fault, our auto insurance premiums moved from 10th lowest in the nation in 1972 to 11th highest in the nation in 2000. During the last year, many auto no-fault rates increased another 20 to 30 percent and personal injury protection costs (PIP) have risen by as much as 60 percent since 2001.

This, of course, was unacceptable. So, more than a year ago Gov. Bill Owens challenged the General Assembly to repair the no-fault law to halt double-digit increases, or scrap no-fault altogether. When it became apparent that special interests would not reach the necessary compromises to fix no-fault, we passed House Bill 1188. The bill, which was started in the House by state Rep. King and carried in the Senate by state Sen. McElhany, switches Colorado to tort as of July 1. Colorado thus joins 37 other states with a fault-based type of insurance.

The biggest difference for the average consumer is that the insurance company of the driver who caused the accident will be held responsible for the victim”s medical bills.

Here are some facts about our new auto insurance system:

– Consumers won’t be forced to purchase extra medical coverage they may not need (PIP). Medical payments coverage to pay for your own injuries when you’re at fault in an accident will still be available.

– Most auto insurance coverages will remain the same: liability (still required by law to protect accident victims when the insured driver is at fault), comprehensive and collision (optional), uninsured motorist coverage in case you’re in an accident with an uninsured motorist (optional), medical payments coverage (optional).

– There should be little if any increase in lawsuits (less than 10 percent of all injury claims actually go to trial in tort states).

There is little evidence that health care or hospital costs will be dramatically impacted by the new auto insurance system. Those systems have their own difficulties that are independent of auto insurance. And because the consumer has more choices in the type of coverage purchased, the cost-shifting will be minimal, if not negligible.

State Rep. Keith King, R-Colorado Springs, is the House Majority Leader. He represents House District 21 in El Paso in Fremont counties. State Sen. Andy McElhany, R-Colorado Springs, represents Senate District 12 in El Paso County. He is chairman of the Business Affairs and Labor Committee; he is also a member of the Transportation, Education and Capital Development committees.


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