Answers to "Auto Insurance" Frequently Asked Questions about

Q: What is “no-fault” auto insurance?
A: No-fault insurance, also known as PIP or Personal Injury Protection, provides coverage for certain medical and rehabilitation expenses from injuries sustained in an automobile accident. It pays benefits for injuries whether or not the insured person is negligent or “at fault”. (Property damage is the responsibility of the at-fault party.) The no-fault law expires on July 1, 2003. All policies with an effective date on or after July 1 will be issued under a “tort” auto insurance law...


Q: What is “tort” auto insurance?
A: A “tort” is a civil wrong, but not a crime. In auto insurance, a tort system means that a determination of fault in an automobile accident is made. The party at fault or his or her insurance company pays medical and rehabilitation expenses to the injured party, as well as property damage. An injured party may also sue for other losses including lost wages and pain and suffering.

Q: What is “liability” insurance?
A: Liability insurance is generally defined as coverage for bodily injury you cause to another person or for property damage you cause to another person’s property through negligent use of your vehicle. The minimum amount of liability insurance required by Colorado Law is as follows:
! $25,000 per person for bodily injury;
! $50,000 per accident for bodily injury; and
! $15,000 per accident for property damage.

Q: What happens to my auto insurance policy on July 1, 2003?
A: The current no-fault law expires on July 1, 2003. That means that all policies that are issued or renewed on or after that date will be written as tort policies. However, if you have a policy that was written before that date but expires after that date, you will still receive the benefits of your “no-fault” policy. For example: Mary has a no-fault policy that was issued on April 15th and expires on October 15th. She is injured in an accident on August 20th. Her medical and rehabilitation expenses will be paid under her no-fault auto insurance policy, regardless of the fact that the no-fault law expired on July 1st. These benefits will be paid regardless of who was at fault in the accident.

Q: Why would my no-fault benefits be paid if the law has expired?
A: Your current auto insurance policy is a contract. It was written under the laws of Colorado at the time you entered into that contract and prior to the expiration of no-fault. The new law does not interfere with your contract and the insurer is required to pay all benefits as outlined in your policy.

Q: If my policy continues until after July 1, can my insurer cancel my no-fault policy on July 1?
A: Not unless you approve of the change. Your auto insurance policy is a contract and cannot be changed mid-term unless you agree to such change.

Q: I don’t want to continue PIP coverage after July 1. Can I buy a tort policy even if my current no-fault policy continues past July 1?
A: Yes, as long as both you and your insurer agree to the change. As the policyholder, you may contact your insurance agent to discuss whether changing from a no-fault to a tort policy is the best thing for your individual needs.

Q: Will I be able to purchase coverage for medical expenses under a tort system?
A: Most, if not all, auto insurance companies will offer limited “medical payments coverage” to their policyholders. This provides coverage for medical bills incurred by you and your immediate family if you are at fault and injured in an auto accident. Check with your agent about the availability of medical payments coverage.

Q: What happens if I am at fault in an accident, and my medical expenses exceed the limits of my medical payments coverage?
A: Under a tort system, it is assumed that the negligent party is responsible for damages. Either you or your health insurance will pay for your medical expenses that exceed the limits on any medical payments coverage under your auto insurance policy.

Q: What happens if I am injured by a negligent driver? Do I have to go to court to get my claims paid?
A: In the vast majority of cases, the answer is no. Typically, the auto insurance companies settle on a determination of fault in a particular accident, and benefits are paid accordingly. Only in few cases where there is a dispute about who is at fault or to the extent of the damages will court action be necessary.

Q: What happens if I am injured by an at-fault driver who does not have auto insurance?
A: If you have purchased uninsured and underinsured motorist coverage, your insurance company will cover your medical expenses. If you have not purchased uninsured and underinsured motorist coverage, you or your health insurance will likely pay for your medical bills. You may of course sue the at-fault driver, but uninsured motorists typically do not have substantial assets from which to recover damages.

Q: How much liability insurance should I carry?
A: You should speak with your agent about your particular circumstances to ensure that you have enough insurance to protect your assets in the event you are sued for damages. Under the old PIP law, if you injured another person in a motor vehicle accident, that person’s PIP coverage would cover their medical expenses. Under the new law, your bodily injury liability coverage will cover those same expenses if you are at fault.