Legislative/Case Law Developments

C.R.S. § 10-4-635

Mandatory Med-Pay...Sort of

C.R.S. § 10-4-635 is Colorado's new Mandatory Med Pay Offer statute. The law requires at least $5,000.00 in med pay coverage be offered on all automobile insurance policies issued after January 1, 2009. Consumers can decline the coverage but must do so in writing or "in the same medium in which the application for the policy was taken."

Ambulance companies and medical providers giving trauma care generally have a priority to be paid first. All other providers, including chiropractic physicians, can receive payment thirty days after the insurance carrier has received notice of the accident.

The unanswered question at this point is whether insurance agents will encourage their clients to purchase med pay coverage. I have heard mixed stories from agents on this issue and unfortunately, only time will tell. One thing is clear, this new law combined with the laws discussed below would lead any well informed consumer to conclude med pay coverage is a "must have."

C.R.S. § 10-3-1115 and § 10-3-1116

Insurance Fair Conduct Act

On August 6, 2008, the Colorado Insurance Fair Conduct Act went into effect. See C.R.S. § 10-3-1115 and § 10-3-1116. Generally speaking, the Act provides that an insurance company which "unreasonably" delays or denies paying a claim is liable for twice the amount of the claim plus attorney fees and costs. Importantly, this law only applies to "first-party" claimants and would not include insurance companies defending the at-fault party in a traditional auto accident case. The law does, however, apply to first-party claims like uninsured and underinsured motorists (UM/UIM) cases. The law also applies to med-pay claims. The easy way to keep this straight is the insurance company must only be reasonable to the person that has the contract with them. This new law provides an obvious incentive for insurance companies to do the right thing in the first place. We shall see what effect, of any, the law has on how insurance companies operate in Colorado.