Few answers to no-fault questions
Post Independent Staff
Insurance agents have fielded gobs of questions about Colorado’s new car insurance law this week, but they haven’t tossed back many answers.
“We don’t have all the details yet,” said Jeff Leonard, a State Farm Insurance agent in Glenwood Springs. “We’ve been taking names, and saying we’ll get back to them.”
Colorado’s legislature scrapped the state’s no-fault auto insurance this session, and some industry experts predicted the change could save consumers at least 15 percent on their premiums each year.
The projected savings come because consumers will no longer have to purchase personal injury protection (PIP), said Colorado Insurance Commissioner Doug Dean.
“Auto insurance premiums have increased an average of 20 percent in this state in the last year alone, primarily because of the increase in PIP premiums,” Dean said.
When no-fault insurance was established in 1974, Colorado residents were promised lower premiums and some compensation no matter who was at fault in an accident. No-fault replaced a tort system, under which insurance companies’ lawyers negotiated to determine who was at fault and how much was owed.
Rates began to increase almost immediately, and Coloradans now pay higher auto insurance premiums than residents of at least 38 other states, according to the industry group Insurance Information Institute.
The new law takes effect July 1. State Farm spokesperson Kelly Campbell said her company hasn’t computed how much car insurance premiums might decrease.
“The amount will vary from company to company, and policy to policy,” Campbell said.
Campbell said State Farm will file its new rates with the Colorado Division of Insurance in June. “Our new rates will take effect after July 1,” Campbell said.
Campbell said when the new rates go into effect will be a good time for consumers to review their policies.
Contact Lynn Burton: 945-8515, ext. 534
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