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Car Insurance Opt-Out Scheme in Colorado

November in Colorado is looking to widen its horizons with a new car insurance programme from insurers giving customers the chance of a new 'opt-out' requirement due to a new Colorado Law that will be effective from January 2009.

As a result of the fast moving reform many insured customers looking to renew their car policy will be sent notifications 60 days in advance to introduce them to the revised premiums along with an optional rejection form to the Rocky Mountain Insurance Information Association (RMIIA).

However, the Rocky Mountain Association has stated that it is important for all drivers to understand how the new legislation will affect their car insurance cost.

New Car Insurance Policy
Colorado Senate Bill 08-11 has created a compulsory opt-out policy of $5,000 in medical payments coverage (MPC). Medical payments cover is presently optional in car insurance cover which is affected in many different prices ranging as low as $1,000 and to as high as $100,000. This is all extra coverage on the car policy that pays for the passengers and drivers medical bills if they are in a car accident.

If the state population do decide to purchase this coverage it is in addition to health insurance and settlement money from an at-fault driver.

Colorado lawmakers passed a bill during the 2008 Legislative Session that will require car insurance companies to add $5,000 of medical payments coverage to every car insurance procedure. This is of course unless the customer rejects the amount in writing or in the same way it was sold to them.

The added $5,000 medical pay coverage will be automatically rolled on for policies that go into effect after January 1st 2009. However, a new premium will be required for the customers who do not carry medical pay.

Lower limits will no longer be accepted under the new scheme so the customers who purchased less than $5,000 will still be offered the maximum amount. Therefore, drivers will have to purchase the higher limit or reject medical coverage by sending back the rejection form.

Colorado insurance companies are taking the correct steps to ensure that their clients understand the new options and the opt-out legal requirements. Companies are also enforcing educational campaigns to help customers stay informed.

RMIIA has also started new educational aids 'Colorado Car Insurance GPS' which helps direct motorists through their coverage choices.

Carol Walker RMIIA executive director advised that it is paramount that insurers talk to their customers so they know what protection they have and stated: "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."

It is thought that around 32% of Colorado residents currently opted to purchase some amount of medical payments coverage on their car insurance policy.

Catherine has more articles pertaining to car insurance and other insurance articles.

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