From Mo Keller in email: "No Fault/Tort Auto Insurance Proposals"

[eleny]

No Fault/Tort Auto Insurance Proposals


The No Fault to Tort Auto Insurance Interim Committee has completed its deliberations for the year, and has adopted several bill proposals for the following legislative session. (The legislature convenes on Jan. 11, 2006.) While there is interest both in the public and with legislators to repeal tort and return to no fault, the governor has promised a veto of any such legislation. Thus, the committee is not proposing a complete reversal back to no fault. (while the committee has not endorsed such a bill proposal, a single legislator could introduce a bill to repeal tort. I do not know of anyone doing this, however.)

Below is a summary of the committee meetings and the legislative proposals that will be coming forward next year:


EXECUTIVE SUMMARY

Committee Charge
The Committee on Auto Insurance was created pursuant to House Joint Resolution
05-1026 to study the Colorado auto insurance system, specifically the impact of switching
from a no-fault system to a tort-based system.

Committee Activities
The committee held six meetings over the interim in an effort to understand the impact
on the auto insurance market, the health care market, and consumers of repealing
Colorado's no-fault auto insurance law and replacing it with a tort-based system. No-fault
required an individual's insurer to immediately pay for injuries and damage resulting from
an auto accident regardless of who caused the accident. Under tort, financial responsibility
lies with the person who caused the accident or their insurer, and payments to victims need
not be made until fault is determined. The committee heard testimony from auto insurance
companies and their agents; first-responders and other trauma care providers; health
insurers, hospitals, and other health care providers; consumers and consumer advocates;
and the state's Commissioner of Insurance. The committee also received presentations from
organizations such as the Insurance Research Council and the National Conference of State
Legislatures.

A key discussion item was how to measure the impact of switching from no-fault to
tort. Information provided by the Insurance Commissioner supported assertions that the
tort system has reduced premium rates, expanded consumer choice in the types of policies
available, and increased industry competition as more insurers entered the Colorado market.
Experts with knowledge about the auto insurance industry confirmed that these outcomes
should be expected in moving from no-fault to tort. However, committee members and
others raised several questions and concerns about whether data from Colorado actually
supported these conclusions. Multiple discussions in the committee attempted to clarify
how premium rates had changed after repealing no-fault.

The committee heard repeated testimony that consumers may not have fully
understood how repealing no-fault would affect reimbursement of injury-related costs
resulting from an auto accident. In many cases, the testimony came directly from
individuals involved in auto accidents who had assumed that costs would be covered in the
same manner as they were under the no-fault system. Consumer advocates and others
testified that many consumers are still unaware of or unfamiliar with the coverage choices
available to them and the appropriate level of coverage. For example, consumers appear
unfamiliar with the benefits of medical payments coverage which can pay coinsurance or
deductibles for medical care received as a result of an auto accident, regardless of fault.

The committee considered several options designed to help consumers know more about
the coverage they are buying.

The committee also heard testimony from accident victims and medical care providers
expressing concern that medical claims resulting from an auto accident are not being paid
in a timely fashion. In large part, these delays were simply the result of insurers waiting
until fault is fully established before paying claims. Representatives of the state's trauma
system testified about the delays they experienced in obtaining reimbursement for their
costs, leading the committee to consider additional funding sources for trauma care.

Committee Recommendations
As a result of committee discussion and deliberation, the committee recommends six
bills for consideration in the 2006 legislative session.

Bill A - Requiring that emergency medical care coverage be included in
automobile insurance policies. Bill A would require that all insurance policies issued in
the state provide coverage for reasonable, necessary, and accident-related emergency
medical care, regardless of who is at fault. Once fault is established, the at-fault driver
would be liable to reimburse the insurer of the other driver for these costs. This new
coverage would apply before medical payments coverage or health insurance benefits for
auto-accident-related injuries and would also apply to coinsurance or deductibles.

Bill B - Requiring that automobile insurance carriers offer medical payments
coverage in connection with an automobile insurance policy issued in Colorado. Bill B
would require a minimum amount of medical payments coverage to be included in any auto
insurance policy issued in the state, unless rejected by an individual in writing. The bill
would add the availability of medical payments coverage benefits to the list of disclosures
that must be made to consumers purchasing auto insurance.

Bill C - Requiring that an insurer make certain disclosures to consumers
regarding the content of automobile insurance policies. Bill C would require auto
insurers to use a uniform disclosure form when issuing policies to Colorado consumers.
The bill also requires the insurer to provide a clear explanation of the individual's policy
and obtain written consent when issuing optional coverages.

Bill D - Applying health insurance prompt pay provisions to claims made as a
result of a motor vehicle accident. Bill D would require that prompt pay provisions for
health insurance expenses apply to claims made as a result of injury from an auto accident.
The bill further permits health insurers to seek reimbursement from the at-fault party.

Bill E - Creating of the Colorado consumer insurance board. Bill E proposes a
Consumer Insurance Council to advise the Division of Insurance and the Insurance
Commissioner on policy issues, prepare information for legislative hearings, and annually
review the performance of the commissioner.

Bill F - Claims practices for bodily injury to a third-party claimant arising out of
the use of a motor vehicle. Bill F adds provisions to state law regarding third-party
claimants in motor vehicle accidents including: benefit disclosure requirements, prompt
determination of liability, presumptive liability when payment for property damage is made,
and fair and consistent methods for determining bodily injury loss. The bill creates a
penalty for the willful nonpayment of third party claims and allows the assignment of legal
liability coverage for third-party bodily injury to a hospital or other health care provider.
Finally, the bill adds the violation of these requirements to the unfair claims settlement
practices act.

Thank you to all the citizens who came to the committee and testified for a change. We appreciate your input.


Please let me know if you have any questions or wish to be kept updated on any of these bill proposals. Thanks, Sincerely, Sen. Moe Keller


--------------------------------------------------------------------------------
Senator Moe Keller
Web: www.knowledgemessenger.com/prod/?app=senkeller
Email: [e-mail]

[Contradistinction]

1. Why in the world would anyone want to go back

to no-fault? I personally thought the no-fault system was the dumbest thing, other than having stadium taxes...

[newyawker99]

2. Hi Contradistinction!!

Welcome to DU!! :toast:

[MissMarple]

4. Emergency services and health providers aren't being paid.

Under no-fault they were paid by the injured party's insurance company. Now, fault must be established and that gets tied up in litigation. Hospitals and ambulance companies are feeling the pinch. Also, the promised drop in insurance cost has been a no show.

[Robb]

5. I don't know about other health providers...

...but I can't imagine EMS bills not getting paid on that basis; where there's an ambulance (in my experience), there are police issuing criminal citations.
The one that always makes me chuckle is the ever-present "driving faster than conditions would safely allow" ticket, which is impossible to beat, especially if your car's in a ditch. :)

[MissMarple]

6. It seems to be a health insurance problem.

It looks like it goes right back to the unavailability of affordable health care and is not specifically related to the tort system. Vehicle repair costs are covered but health care is not, as it was under no fault. This is just another consequence of our overpriced, inefficient, schizophrenic health care "system".

http://www.denverpost.com/search/ci_3249974

"But in Colorado, 767,000 people, 19 percent of the population, have no health insurance, according to the U.S. Census Bureau.
Now people are not required to have health insurance that would automatically pick up their emergency health care costs.

Taxpayers have picked up part of the difference because hospitals must, by law, provide emergency care regardless of whether the patient can pay.

With more people lacking health insurance, Medicaid, the government insurance for the very poor, has had to pay more of the bill.

Between 2001 and 2004, the share of ambulance trips in Colorado paid for by Medicaid more than tripled.

Denver Health, the city's public hospital, has lost about $8.5 million a year because of the change in auto insurance, according to chief financial officer Peg Burnette."

[Samurai_Writer]

3. I had an accident in a No Fault state in Sept.

Florida, to be exact. I was sitting in traffic, and some idiot in a Dodge Ram pickup rear-ended me going about 35mph. I was injured, and am still going through rehabilitation. For this pleasure, I discovered that:

I only get 60% of any time missed from work (which is considerable)
I have to pay 20% of all the medical bills associated, plus a $250 deductible.
I had to pay a $500 deductible, two months of rental car expenses, AND $800 to transport my truck after it was repaired (I moved to CO a week after my accident.. the move had been planned before the accident). Not to mention my moving costs increased from $400 to $1800... the difference between a U-Haul trailer and a 14 foot truck. I had planned to haul the trailer behind my Toyota Tacoma for my move. But no pickup truck, because it was sitting in a body shop with $7500 worth of damages, so I had to rent a U-Haul truck.

What did the guy who hit me have to pay? NOTHING. And I can't sue him for these several thousands of dollars I am having to pay out of my own pocket because of HIS idiocy. Not to mention I've been in pain for the past 2 months and probably will have problems with my ankle now for the rest of my life.

Am I bitter? Hell yes. No Fault is for greedy insurance companies. Period.