Colorado No-Fault Insurance Law

Prior to 2003, Colorado had been operating under a "no fault" automobile insurance system. That means if you were injured in an automobile accident your insurance company, without regard to who was at fault in causing an accident, paid for medical and rehabilitation expenses, as well as lost income and home services if the injuries required you to be off work and/or in need of home services (an insurance package of $130,000 potentially available.) Under that law, it also meant that if your medical expenses exceeded a certain amount you had the right to hold the at fault driver responsible for compensating you for damages not compensated under the no-fault system.

Based on the lobbying efforts of the insurance industry, the legislature repealed the no-fault system. However, some no fault policies still apply. What does this mean? First, it means that any injuries arising out of automobile accidents occurring on or after July 1, 2003, may be subject to a pure fault system. That is, the cost for medical care may no longer be covered by your own automobile insurance unless you have purchased an optional "Medical Payments Coverage" which is offered by insurance companies in various amounts. Medical Payments Coverage pays for medical expenses up to the limits of coverage you purchase. The person injured by an at fault driver will be entitled to seek full recovery against that at fault driver. Medical expenses incurred before resolution of such an injury claim will be covered by the optional medical payments coverage, if purchased, and/or available health insurance coverage.

The best way for you to react to this change is to protect your own financial security by buying the highest possible bodily injury liability coverage and uninsured motorist coverage that you can afford (uninsured motorist coverage is more critical to have at higher levels in the fault based system.) You should purchase Medical Payments Coverage as high as makes economic sense to you. Your insurance agent can best explain to you the cost savings, if any, by the total elimination of no fault coverage and whatever increases you choose in bodily injury liability and uninsured motorist coverage and the addition of medical payment coverage. If you have an automobile injury claim pending, it could be affected by this change.

If you have any questions regarding this quite dramatic switch in how automobile accident injuries are handled, as always, please feel free to give us a call.