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Publish Date: 8/24/2005

Panel questions auto insurance education


DENVER — There needs to be uniformity in presenting and explaining auto insurance coverage options to Coloradans buying or renewing policies, several members of a legislative panel said Tuesday.

It’s been more than two years since Colorado converted from a “no-fault” auto insurance system to one in which the driver at fault is supposed to be responsible for paying for treatment of anyone else’s traffic-accident injuries.

Many Coloradans, however, appear to remain confused about the implications of going without personal medical coverage as part of their auto insurance package, lawmakers say. Some do that to lower their premiums now that the state no longer requires such “personal-injury protection.”

If Colorado motorists don’t have adequate health insurance that covers vehicle accident injuries, no matter who was at fault, they’re running a risk when they don’t buy the optional medical payment coverage as part of their auto insurance policies.

Representatives and agents from such auto insurance carriers as State Farm, Allstate and Progressive told members of the Legislature’s Interim Committee on Auto Insurance about the steps their companies have taken to try to educate their customers about the insurance system changeover and the pros and cons of choosing insurance packages.

Aurora Democratic Rep. Morgan Carroll, however, said lawmakers have heard that what insurance customers are being told can vary greatly from company to company and even from agency to agency.

Denver Democratic Rep. Fran Coleman, the chairwoman of the committee, said afterward that there may be a need for the Legislature and Colorado’s insurance commissioner to impose a “uniformity-of-disclosure” requirement on auto insurance companies.

“I believe they’re really trying” to get word to customers about what levels of coverage the law still mandates, what levels are optional and what the relative costs and benefits are of those optional coverages, Coleman said in an interview.

But that consumer information has been inconsistent, she said.

Committee members continued to complain Tuesday that auto insurers’ reports of premium reductions in the wake of abandoning the no-fault system do not provide valid “apples-to-apples” comparisons, since they don’t reflect costs that have shifted to driver’s health insurance policies, when they even have such policies.

Sen. Tom Wiens, R-Castle Rock, noted that many health-care providers, including hospital emergency rooms and ambulance companies, have been complaining of late payments or nonpayment for their services after the auto-insurance changeover.

Those providers’ losses, which ultimately are passed along to consumers and taxpayers, may wind up having a greater impact than savings consumers are getting from reduced auto-insurance premiums on policies that no longer include personal health coverage of accident treatment, Wiens said.

One possibility, Wiens suggested, might be for the state to once again require an auto policyholder to also buy medical-pay coverage unless that person can prove he or she already has an equivalent level of coverage through a health-insurance plan or policy.

The Auto Insurance Committee is to meet next in September to continue its study of questions, Coleman said, of such issues as “who’s benefiting” from the two-year-old change, “who’s being hurt, and what kind of mid-course corrections may be needed.”

John Fryar can be reached by e-mail at jfryar@times-call.com.

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