February 22, 2004

By: Tom Fredericks
Website: http://www.1st-in-cars.com

Industry Study Released On The Impact Of Colorado's Change In Auto Insurance Law

Colorado Insurance Commissioner Doug Dean today officially released results of an industry study on the initial impact of the state’s transition from no-fault to tort auto insurance. The study shows significant premium relief for Colorado consumers. Commissioner Dean announced the results during an 11 a.m. news conference at the State Capitol.

On July 1, 2003, Colorado’s 30-year old no-fault auto insurance system was not renewed. The system was allowed to sunset, and Colorado reverted to a tort or fault-based system.

Since the transition to tort, many questions have been raised by the public and policymakers as to the actual impact of the transition on Colorado insurance rates. To answer these questions, the National Association of Independent Insurers conducted a survey of 13 auto insurers representing two-thirds of the auto market in Colorado. The data collected illustrate that auto insurance premiums are no longer spiraling upward. The average cost of a liability-only policy, which meets all the state legal requirements and uninsured motorist/underinsured motorist coverage, is now 27.2 percent less than the previously mandated liability, no-fault and UM/UIM coverages. The premium trend graph illustrates the benefit to the average auto insurance consumer; had the old law been continued, the average liability and uninsured motorist premium would have been $691, but is $503 under our new tort system.

The NAII, in conjunction with the Rocky Mountain Insurance Information Association, has prepared this study as a report to Governor Bill Owens and the General Assembly on the impact of the change in Colorado’s auto insurance law. Our study clearly demonstrates that the Governor and General Assembly's goal to give rate relief to Colorado auto insurance consumers and put the brakes on out-of-control costs is being achieved, said Michael Harrold, senior director of state government affairs for the National Association of Independent Insurers. Drivers now have choices to save money and design the coverage that best fits their personal and financial needs.

About The Author:

Tom Fredericks is a successful author and regular contributor to http://www.1st-in-cars.com.  Great car accessories and parts plus financing, insurance and leasing tips.