NEWS RELEASE

Media Contact:
Renee Beauregard 303-400-3456
Ken Scott 713-682-1382, pager 1(800) 901-4418

3 Things Consumers Need to Know About New Tort Auto Insurance

Denver, CO - July 9, 2003 - Colorado repealed its 30-year-old no-fault auto insurance law July 1, 2003. The state, along with 37 others, is now under a tort or fault-based auto insurance system. Many Colorado citizens are being bombarded with notices from their auto insurance companies and do not understand the choices available to them under the new system or the potential financial consequences of those choices.

"The change in law is confusing to many consumers and the information out there is often contradictory and adds to the confusion," said Renee Beauregard, executive director, Consumers United Association. "CUA encourages consumer to get all the facts before making decisions about auto insurance coverage under the new tort system."

1. Get the facts. Misinformation abounds about how tort insurance will work when a person is involved in an automobile accident. It has been reported that under the new insurance parties will have to sue in court to be compensated for injuries and this is not true in the majority of cases.

2. Evaluate your coverage needs. Many people are concerned about protecting their assets from lawsuits spurred by an auto accident. Work with your insurance agent to assess what is the right amount of coverage for you and do not purchase more than you need.

3. Insurance costs are expected to decrease by an estimated 17 percent with the change from no-fault insurance. However, depending on the amount of coverage consumers purchase, their rates may actually increase. CUA encourages consumers to compare new coverage with their old no-fault policy coverage and examine their potential asset losses before making a decision about how much coverage they need.

CUA offers consumers the following tips when deciding how much auto insurance to purchase:

• Bodily injury liability coverage - Mandatory state requirements are $25,000 per person and $50,000 per accident. This coverage protects you if you cause an accident where someone is injured or killed. Weigh the additional premium charges against the need for added protection when making a decision about the necessity of bodily injury coverage in excess of mandatory amounts.
• Property liability coverage - Mandatory state requirement is $15,000. This coverage pays for damage done by your car to another car, building, garage door, home, etc. Just as with bodily injury liability, you may purchase additional coverage.
• Collision coverage is not state mandated, however, when financing a vehicle, the lender usually requires that collision coverage be carried on the vehicle being financed. Collision covers damage to your car when the accident is your fault.
• Comprehensive coverage is not required by the state but is required by most lenders. Coverage protects your vehicle against damage that is not collision related. Flood, hail, fire, theft, earthquake, explosion and falling objects are included in covered risks.
• Uninsured motorist coverage is available in property damage and/or medical coverage. If you have a personal health insurance policy, you will not likely need the medical coverage.
• Medical payments coverage or MPC (formerly PIP) is an option of purchasing additional medical coverage similar to what was required under no-fault insurance. This covers medial expenses for you and your passengers regardless of fault.

The vast majority of insurance agents will work with consumers to balance coverage needs with what the consumer can afford to pay. However, do your own research and make sure you are not purchasing more insurance than you need before agreeing to a policy. You may also want to shop around for the best rates for the amount of coverage that you decide is best for you.

Consumers United Association (CUA) is a nonprofit consumer advocacy association serving consumers in Colorado. Our mission is to improve the financial lives of consumers by providing financial education and advocacy. CUA offers services and resources to aid consumers in the resolution of consumer problems and provides a united voice for consumers in the legislative arena. For more information visit www.cuacolorado.org.