Do your homework on new car insurance law |

Do your homework on new car insurance law

Industry observers expect automobile insurance rates to drop 17 percent in many cases due to Colorado’s recent change in insurance law. But for some motorists, rates may increase.”Consumers United Association encourages consumers to compare new coverage with their old no-fault policy coverage, and examine their potential asset losses before making a decision about how much coverage they need,” said association spokesman Ken Scott.Consumers United Association is a nonprofit consumer advocacy association serving consumers in Colorado.Scott said the association offers consumers the following tips when deciding how much auto insurance to purchase.-Bodily injury liability coverage: Mandatory state requirements are $25,000 per person, and $50,000 per accident. This coverage protects policy holders if they cause an accident where someone is killed or injured. “Weigh the additional premium charges against the need for added protection, when making a decision about the necessity of bodily injury coverage in excess of mandatory amounts,” Scott said.-Property liability coverage: The mandatory state requirement is $15,000. This coverage pays for damage done by the policy holder’s car to another car, building, garage, door, home or other structure. “Just as with bodily injury, you may purchase additional coverage,” Scott said.-Collision coverage: Colorado does not mandate collision coverage. However, when financing a vehicle, the lender usually requires collision coverage on the vehicle being financed. Collision covers damage to a car when that car’s driver is at fault in an accident.-Comprehensive coverage: Colorado does not mandate comprehensive coverage, but it is required by most lenders. Comprehensive coverage protects vehicles against damage that is not accident related, including flood, hail, fire, theft, earthquake, explosion and falling objects that are included in covered risks.-Uninsured motorist coverage: This is available in property damage or medical coverage. “If you have a personal health insurance policy, you will not likely need the medical coverage,” Scott said.-Medical payments coverage or MPC (formerly PIP): This is an option for purchasing additional medical coverage similar to what was required under no-fault insurance. “This covers medical expenses for you and your passengers, regardless of fault,” Scott said.Colorado repealed its 30-year-old no-fault auto insurance law during the last legislative session, and the new regulations went into effect July 1.”Many citizens are being bombarded with notices from their auto insurance companies, and do not understand the choices available to them under the new system, or the potential financial consequences of those choices,” Scott said.Consumers United Association director Renee Beauregard said it has been reported that under the new insurance system, parties must sue in court to be compensated for injuries. “This is not true in the majority of cases,” Beauregard said.

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