The Colorado Senate Appropriations Committee is scheduled to vote on Friday on a bill that insurance associations say would force drivers to pay for mandated coverage that most consumers now choose to reject.
Senate Bill 193 would require an auto policy issued or renewed on or after July 1, 2007 to contain medical payments coverage for payment of medically necessary and accident-related health care expenses and rehabilitation for bodily injury arising out of the ownership, maintenance or use of a motor vehicle. Required coverages would include legal liability coverage for bodily injury or death of $25,000 to any person in any one accident, and $50,000 to all persons in any one accident and for property damage.
"This government mandate translates into a rate hike for most consumers of an extra $200 per car, per year," according to the American Insurance Association, National Association of Mutual Insurance Companies and Property Casualty Insurers of America, which issued a joint statement criticizing the bill. "For some, that adds up to as much as a 40 percent increase. For most people, this extra coverage duplicates their health insurance -- for seniors and military personnel, it requires them to buy insurance that is available to them for free through the federal government."
The associations said that because the bill automatically renews the extra coverage, consumers would have to reject the coverage in writing, so some might pay for extra coverage without realizing it is on their policy.
"Legislators got rid of no-fault in 2003 due to its out-of-control costs -- pushed by high mandated coverage and treatment abuses," said Tiffany O'Shea, public affairs director for the AIA. SB193 basically says all drivers should pay extra, whether they need it or not, to help fund the state's trauma system that was built in large part on Colorado's old no-fault auto insurance system, she said.
Source: Colorado General Assembly, AAA Colorado, AIA, PCI, RMIIA
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