Six months after Colorado's legislators repealed no-fault auto insurance laws, insurance agents and motorists alike are realizing they've been fooled.
Under the new tort law system, the insurance agency of the person responsible for the accident pays medical and damage bills incurred in the accident.
Most people expected this meant insurance rates would decrease, because motorists would no longer have to purchase personal injury protection coverage to pay for medical bills, as they had to under the no-fault insurance system.
"The general public was misled," E. J. Bunk of Farmers Insurance Group said. "We'd get a nice decrease in rates, we heard in the media and from the Denver television stations, and we were dumb enough to believe this, because we were hoping for something good."
When insurance laws were changed May 1, insurance agencies had to file new rates for medical payments. Most agencies had no reference point for adjusting rates, so rates are all over the place, said Sue Lyster of Colorado Farm Bureau Insurance.
She said under the old system, if a motorist was involved in an accident, their insurance would pay medical bills for them and any passengers in their car.
Most people are at the highest risk for injury when they're at work and in their cars, Lyster said. Most people have workers' compensation to cover injuries at work. Many people used to count on auto insurance to cover their medical bills if they were in a car crash.
But under the new tort system, an at-fault motorist's medical bills won't be covered, unless they have health insurance or medical payments coverage.
That means any money saved by auto insurance rate decreases will be negated by health insurance payments.
Even if a driver has health insurance, uninsured passengers in that person's car will not be covered. Lyster recommends that drivers who frequently have passengers buy some form of medical payments coverage.
"People aren't seeing big rate decreases," Lyster said. "If they choose not to have health insurance then they see a rate decrease. Some are saying flat-out, I can't afford it and I have to skinny rates down as much as possible."
Lyster said it's still too soon to see what effect the new law will have on health insurance rates. Rates are adjusted every 12 to 18 months.
Lyster estimated that 35 to 40 percent of Moffat County drivers are driving without any auto insurance. Bunk put that number closer to 25 percent.
But even Bunk's lower estimate means that when a driver is involved in an accident, there is a one in four chance that the other driver in uninsured. Drivers can purchase uninsured motorist coverage for this eventuality.
Thirty-eight states have tort insurance laws.
Bunk said that the tort laws may prove to be a superior insurance system over time.
"In the long run, it could be a much better thing, because it can help stabilize rates," he said.
Rob Gebhart can be reached at 824-7031 or by e-mail at firstname.lastname@example.org.