The Colorado Legislature has killed two automobile insurance bills this month that would have kept the no-fault automobile accident laws in effect. Without a change, Colorado will revert to a tort system in which accident victims must go to court to collect damages.
Both bills were aimed at reforming the state's no-fault system, in which insurers pay for damages regardless of fault and motorists give up some rights to sue.
The issue affects millions of Coloradans and $2.5 million worth of insurance premiums.
Neither solution is the ideal one, local insurance agents say.
"We're trying to get away from no-fault because it's so costly," said Sue Lyster with Farm Bureau Insurance in Craig. "I know we need something to bring our automobile premiums down, but I don't know what the solution is."
Colorado is ranked 11th in the nation for automobile insurance premiums and, according to E.J. Bunk with Farmer's Insurance, Craig is among the highest in Colorado, beating out Steamboat Springs, Meeker and Grand Junction.
"No fault is way out of hand and we, the consumers, are to blame for that," he said. "It's a very serious situation. If we go back to a tort system, I don't know. Maybe it will be better. I'm not seeing this work."
House Bill 1321, the second of the proposals to fail, died on the House floor after opponents argued it would deprive drivers of too many rights and did not guarantee insurance rates would drop.
Colorado's premiums are expected to increase to double the national average this year.
There is still time to introduce a late bill. The Legislature has until May to pass a bill before the state returns to a tort system, in which all automobile accident claims are settled in courts.
"So we're back to square one and we still have nearly two months of the session left," said Dan Hopkins, spokesman for Gov. Owens. "The governor is still hopeful that there can be a bill that can provide meaningful reform to no-fault but, short of that, he is fully prepared to let the state revert to a tort system."
A straight tort system is expected to lower premiums.
HB1225 would have allowed people to choose an option not to sue for economic or non-economic damages in return for lower premiums. It also would have allowed for special medical treatments such as chiropractic care and limit what qualified as medical and rehabilitation benefits.
The bill's importance was not underrated by the state Legislature, which called all members to the House floor and locked the doors to secure more votes for the first bill on insurance reform -- HB 1225.
The bill died 27-37 with opponents saying it deprived drivers of too many rights and there were no guarantees with that bill either that insurance rates would drop.
"I'm not sure what needs to happen," Bunk said. "At this point, I don't see anything happening. We're probably going to have to go back to
a tort system."
Lyster said several states have a cap on what insurance companies have to pay for medical care. Now, insurance companies pay up to $50,000 for medical care, loss of wages, loss of services and up to $50,000 for rehabilitation.
Some states limit that to a certain amount, leaving the remainder to be covered by a person's health insurance.
"There are pros and cons to that," she said. "You know now that by paying your automobile insurance, your medical bills will be paid. People who have health insurance and pay high premiums are would be getting double billed."
Changing the law to a tort system would be good for insurance companies, but not good for consumers, Lyster said.
And it may not be good for the judicial system.
Moffat County Court Judge Mary Lynne James said changing automobile insurance to a tort system could increase a workload for judges who already are overworked due to state budget cuts.
"We're not really sure what the effect will be," she said. "We're concerned it will mean an increase in civil cases and that's a problem because there's a freeze on."
The freeze means no more judges can be hired in the midst of the state's budget crunch and there are cutbacks in judicial services.
"It appears the current values on what it takes to originate a case into the tort system are so low, we're seeing a lot of cases anyway," James said.
Costs will increase because people will have to hire a lawyer to get a settlement after an accident and costs will increase to customers who bear the insurance company's cost of defending a case.
One solution, Bunk said, is for consumers to take the lead in reducing insurance claims, therefore reducing premiums.
He said his office paid more than $1.5 million in claims in 2001 and $800,000 in 2002 -- for the Craig area alone.
"That's too much money for a small area like this," he said. "We need to get rid of anything bogus. I think some people are just milking the system."
Bunk said he's been complaining about insurance rates for several years.
"Insurance agents don't get any breaks on rates either," he said. "It's embarrassing to tell people it's going to cost them 'X' amount and people look at you and call you a crook."
He recommends people call their legislator and share their opinions.
Christina M. Currie can be reached at 824-7031, or by e-mail at firstname.lastname@example.org.