The defeat yesterday of a Colorado State bill to mandate auto injury medical payment coverage was one of the nation's latest legislative skirmishes over the merits of the no-fault system of auto insurance coverage.

Legislation to modify or repeal no-fault will also face lawmakers in Florida and Minnesota.

In Colorado, House Bill 1036 was defeated by one vote. It would have required insurers to provide $5,000 medical payment coverage unless it was rejected in writing by the consumer.

The issue has been debated by Colorado lawmakers every year since 2003 when the state reverted to a court adjudicated system for auto insurance claims. Kelly Campbell, regional manager for the Property Casualty Insurers Association of America, said passage of the legislation would have been the first step back toward a no-fault system “with its high costs and unnecessary coverage.”

She said under the present litigation system drivers are given the choice whether or not to include medical coverage because they may already have it under their insurance.

Florida lawmakers this year will consider Senate Bill 7094, which proposed major changes to the existing no-fault system, set to expire next year unless the legislature reenacts it.

David Reddick, regional manager for the National Association of Mutual Insurance Companies, said the industry is divided on the issue of the Florida no-fault law, “with most NAMIC member companies preferring to see it sunset.”

The proposed reenactment law would contain a provision that would list diagnostic tests deemed not medically necessary for use in treating persons sustaining bodily injury covered by personal injury protection benefits.

In addition, providers' attorney fees will not be recoverable if the provider did not accept a valid assignment of benefits.

Minnesota lawmakers will consider repeal or reform of the state's auto insurance no-fault law.

Steve Schneider, American Insurance Association regional vice president, said chief among the problems in the Minnesota no-fault system is the low $4,000 medical cost threshold for lawsuits. “This has created an incentive for unscrupulous medical providers and trial lawyers to exploit the system and go to court,” he said.

The legislation would also prohibit uninsured motorists from filing lawsuits in motor vehicle crash cases for things such as pain and suffering damages.

“It is unfair for an uninsured motorist, who is driving illegally, to sue someone and reap a financial windfall by collecting noneconomic damages,” Mr. Schneider said.

Special Reports /

No-Fault Debated In 3 States

Related Stories

Recommended For You