Starting this month, the mail and inboxes of Colorado drivers will begin filling up with notices from their car insurance companies informing customers of a new “opt-out” requirement due to a new Colorado Law that takes effect January 1, 2009. Because many car insurance policy renewal notices are sent 60 days in advance, drivers whose coverage renews in January will start receiving revised premium notices — along with an optional rejection form, according to the Rocky Mountain Insurance Information Association. However, it’s important for all Colorado insurance consumers to understand how the legislation affects their insurance, the association advised.
Colorado Senate Bill 08-11 creates a mandatory opt-out of $5,000 in medical payments coverage (MPC). Medical payments coverage is currently optional auto insurance coverage that is offered in many different amounts — ranging from $1,000 to $100,000. This is extra coverage on the auto policy that pays for the driver and passenger(s)’s medical bills regardless of who causes the accident. If Coloradoans buy this coverage it is in addition to health insurance and settlement money from an at-fault driver.
During the 2008 Legislative Session, Colorado lawmakers passed a bill that will require car insurance companies to add $5,000 of medical payments coverage to every car insurance policy, unless the customer rejects the amount in writing or in the same way it was sold to them (i.e. telephone, Internet).
For policies that go into effect after January 1, 2009, the additional $5,000 in med pay coverage will be automatically rolled on. For customers who don’t already carry med pay this will mean a new premium. If drivers purchased less than $5,000 previously, the company is still required to offer a $5,000 limit, since the lower limit amounts will no longer be offered. Bottom line: Drivers will need to buy $5,000, choose a higher limit, or reject all medical coverage by sending back the rejection form, RMIIA explained.
It’s estimated that about 32 percent of Coloradans currently choose to purchase some amount of medical payments coverage on their car insurance policy. “So the implementation of this new law will require the majority of Colorado drivers to again carefully weigh their decision to buy extra medical coverage and take action to reject the coverage if they determine they don’t want or need it,” saidCarole Walker, RMIIA executive director. That’s why it’s important for agents or company representatives to talk aboutinsurance choices and make sure their clients have the protection that’s right for them, she advised.
Colorado insurance companies are taking steps to make sure their customers understand their options and the new opt out legal requirements. Companies are implementing education campaigns that will start this month to inform their customers, agents and employees of the law changes. RMIIA also has new educational guides, “Colorado Car Insurance GPS,” that help steer drivers though their coverage choices. For information, visit http://www.rmiia.org/downloads/RMIIA_CO_auto_insurance.pdf.
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