Auto Insurance remains bane

It's a bit cheaper on average, but the new tort system isn't meeting Coloradans' basic needs, lawmakers are told.

By Christopher Ortiz

Denver Post Staff Writer







Colorado drivers are paying lower auto-insurance rates because the state abandoned no-fault insurance rules two years ago, but the coverage is not meeting basic needs, according to testimony presented to an interim legislative committee Wednesday.



Colorado Insurance Commissioner David Rivera told the panel of skeptical lawmakers that insurers, on average, lowered their rates by nearly 14 percent in the months after the state eliminated no-fault insurance coverage.



With no-fault insurance, each driver's insurance paid his or her medical claims, regardless of who caused the accident. Now, the driver at fault in an accident is responsible for paying the medical claims of an injured motorist.



That allowed drivers to drop their personal-injury protection. But the new lower-rate policies have inadequate coverage, said Richard W. Laugesen, a lawyer and University of Denver professor.



"Insurers should offer what people need," including immediate payment for medical care, lost wages, rehabilitation, funeral expenses and vehicle damage, Laugesen said.



He said victims of traffic accidents should not have to rely on their health-care coverage as a substitute for inadequate motorist insurance.



"Health care is too expensive already," he said.



Republican and Democratic lawmakers on the panel also were skeptical about how well the new system was working.



Sen. Tom Wiens, R-Castle Rock, said policymakers have no way of knowing whether consumers have saved money because of the switch.



"We're getting a presentation here that shows the average decrease of this and maximum increase of this and all these other decreases as if we have some raging success here, but you're not really giving us anything to compare how the value of the policy has decreased," Wiens told Rivera.



Democratic Rep. Morgan Carroll of Aurora asked Rivera for more information on how the reduced rates correspond to reduced protection for drivers.



And Wiens said he wanted more information about how much more health insurers charge to make up for the decreased coverage offered by auto insurers.



Proponents of the no-fault system warned that health-care costs would increase because auto insurance would no longer cover injuries after accidents in the same way.



Laugesen said his key concerns about the new system involve how slowly injured parties are compensated and the problems that arise when the wreck involves only one vehicle.



Despite the shortfalls, Lauge sen said the new insurance system is fixable.



"I liked the no-fault policy (Colorado had)," he said. "It served us well for 20 years, but we don't need to go back to that."