COLORADO AUTO INSURANCE RATES BEING REVIEWED:

Despite claims by the Colorado’s insurance commissioner, several House Democrats don’t think that auto insurance rates have declined since the state moved from no-fault to a tort system. Insurance Commissioner David Rivera told an interim legislative committee looking at auto insurance rates that since the state went to a tort system last summer, premiums dropped anywhere from 24 to 51 percent, depending upon the chosen amount of coverage. Rivera said motorists who purchased protection against their own vehicles saved about $265 a year. Those who opted for the minimum liability coverage saved even more, approximately $300, he said. However, Rep. Morgan Carroll, D-Aurora, criticized those numbers. Carroll said the figures are based on the largest 24 companies operating in the state, which represent approximately half of the state’s drivers. The Legislature allowed the state’s no-fault system to expire in 2003 because of concerns over ever-increasing rates. Lawmakers were told that rates would stabilize or decrease, if the state stopped requiring all Colorado drivers to have personal injury protection on their policies. Under the new system, drivers who are at fault are left with the tab of paying for the treatment of anyone injured in an accident. Carroll said she studied auto insurance rates based on raw data from Rivera’s office, and determined that of the 200 companies operating in Colorado, 80 increased rates and 48 others made no rate changes despite the reduction in coverage prompted by the tort system. Carroll said that 61 of the companies filed rate reductions after July 1, 2003, when the tort system went into effect, but 30 of those did so only after increasing their rates just before that date. American National General Insurance Co. increased its rates before July 2003, by 31 percent, and then lowered it 14.9 percent after that date. Federal Insurance Co. increased its rates 43.4 percent before no-fault ended, and then lowered its rates 4.5 percent after the tort system started. Carroll called on Rivera to look more closely at the rates to see if the companies were taking advantage of the change in state law to increase their profits. He agreed it is difficult to compare rates under the no-fault and tort systems because they don’t match. A typical driver with full coverage under the old system, with $50,000 in PIP coverage, would pay about $1,130 a year. Under the new system, full coverage policies with $50,000 in medical pay coverage, premiums would be about $100 higher.