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Insurance Companies Fight Against Victim Rights

March 3, 2017
Colorado Legislature insurance companies

The insurance industry is at it again. But this time, they aren’t trying to avoid paying their clients; they are trying take away client rights entirely by creating new laws that benefit the insurance industry, not victims. Auto insurance companies are already notorious for not paying victims of car and motorcycle accidents in Colorado, something they are legally obligated to do. Now they want to make it legal for them to pay victims less than they need.

There are three bills going through the Colorado legislature right now and I urge you to call your representatives, telling them to vote NO on all three:

SB17-181 – Collateral-Source Rule Evidence of Insurance (The At-Fault Party Gets To Take Advantage of You Because You Were Smart Enough to Have Health Insurance Bill)

Language from the bill itself:

The bill modifies the collateral-source rule, which generally states that in a civil action for damages the jury should not be told about your health insurance coverage, whether it is private insurance, Medicare or Medicaid and/or other sources from which the you have received or may receive health insurance coverage (collateral sources). The bill allows the at-fault party to tell the jury that you have health insurance (they want this because the health insurance companies pay the doctors less than you would if you walked in and paid cash, because this can make your case look like it has less value) and reduces what you can receive as an award by the lesser of:

  • The amount paid or available to the plaintiff from collateral
  • sources; or
  • The amount of premiums or other contributions the
  • plaintiff paid to those collateral sources.

What it means for victims:

This bill rewards wrong-doers at the expense of injured people.  Current Colorado law ensures that the careless person bears the full financial burden of any injury, regardless of whether the victim has insurance or not.  SB17-181 would change the law and allow wrong-doers to profit from the insurance for which injured parties have paid.

SB17-182 – Uninsured Motor Vehicle and Medical Coverage (The “You’re Not Fully Covered Even Though You Paid For Full Coverage Bill”)

Language from the bill itself:

Current law forbids uninsured and underinsured medical coverage to take a setoff when medical insurance pays a part of the damages caused by a crash. The bill clarifies that this does not require the insurers to pay more than the actual damages caused by the crash.

An insurer is authorized to prohibit stacking the limits of more than one uninsured motorist coverage policy if the provisions are included in a single policy covering multiple vehicles or in multiple policies issued by one insurer or by insurers under common ownership or management. But this provision must not prohibit stacking of the uninsured or underinsured policies issued to an insured by different companies or to an unrelated person.

The maximum liability under the uninsured motorist coverage is the lesser of the policy limits and amounts paid by a legally liable person or the amount of damages sustained but not recovered.

What it means for victims:

The bill applies to uninsured and underinsured motorist coverage (UM/UIM) which most Colorado consumers purchase as part of their auto insurance package.  Under current law, injured persons can receive benefits from their own UM/UIM coverage in order to cover the full damage amount.  SB17-182 limits these benefits you currently receive.

Example: If you have $150,000.00 in medical bills and the at-fault driver only has $25,000.00 in insurance coverage and you have $100,000.00 in UIM insurance coverage, the total amount of insurance coverage that you would be entitled to would be $125,000.00. Under the proposed law, your UIM insurance company gets to deduct the at-fault insurance company limits. Under this example, your UIM insurance carrier would deduct $25,000.00 from your UIM policy limits and the most you could receive from all insurance carriers would be $100,000.00. This law would essentially allow your insurance company to steal from you by reducing your $100,000.00 in UIM coverage to $75,000.00 in UIM Coverage.

SB17-191 – Market-based Interest Rates On Judgments

Language from the bill itself:

The current rate of post judgment interest is 2% over the Kansas City discount rate with a floor of 8%. The bill eliminates the floor.

The current interest rate for judgments for personal injury damages caused by a tort is 9%. The bill ties this interest rate to the current rate of postjudgment interest.

What it means for victims:

The bill reduces the amount of interest insurance companies owe to injured people and takes away their incentive to make timely payments.

Example: Can you get a loan for slightly above market rate? No. But that is exactly what the insurance companies want to be able to get away with. If you had to take out a loan to pay for all your medical bills, lost wages, and other expenses because of a car or motorcycle accident, the banks (who would never loan you the money) would charge you credit card rates. Why should the at-fault party’s insurance company pay only slightly above the discount rate?

Contact your legislators, tell them to VOTE NO

These bills are up for a vote in the Senate Judiciary Committee on Tuesday, March 7. Please call your legislators and tell them to Vote NO!

I already called my legislators. It was easy to find their contact information using this link. Then enter your address in the white search bar on the map.

We are up against another big-money, deep pockets campaign to strip car and motorcycle accident victims of their rights. Please fight the insurance companies and call your representatives now.

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