If you’ve been in an auto accident recently, the CNN report “Auto Insurers Play Hardball in Minor-Crash Claims” probably sounds like business as usual. The report, published in February 2009, highlights the insurance industry strategy of deny, delay, defend.

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As we learned in parts one through four, Colorado Revised Statute 10-4-609, effective January 1, 2008, addresses uninsured motorists (UM) and under-insured (UIM) motorist claims and closes the loopholes that prevented consumers from receiving the full benefits they thought they were buying when purchasing UM/UIM coverage in Colorado.

What Should You Do?
Call your insurance company today! This act takes effect January 1, 2008, and it applies to any policy issued or renewed on or after January 1, 2008. It does not automatically update or retro activate an existing policy. You must notify your insurance company and write a new policy or renew your existing policy.

What Else Do I Need to Know?
The new law requires insurance companies to provide consumers with the option of carrying equal limits of UM/UIM as up to the bodily injury liability limits. So, what that means is; if your liability coverage is $100,000 then you are eligible for $100,000 in UM/UIM coverage.

Saving Money by Dropping the Premiums on Additional Cars is Not a Good Idea.
Your insurance agent may try to talk you into dropping coverage on additional cars is not a good idea and here

Now that we know about liability insurance and uninsured and under-insured coverages and how insurance companies used “set-off” and “anti-stacking” together to lessen your coverage, let’s talk about how insurance companies used “set-off” and “anti-stacking” together.

Could “Set-off” and “Anti-Stacking” be Used Together?
Prior to January 1, 2008, insurance companies could reduce your compensation by “setting off” and “anti-stacking” your compensation at the same time. The law now prohibits that practice.

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In parts one and two, we learned about liability and uninsured and under-insured coverages and how insurance companies can no longer “set-off” reduce the amount of your UM coverage.

What is “Anti-Stacking”?
Another change in the law stops insurance companies from using “anti-stacking” language when writing a policy. Prior to the new law, insurance companies could collect premiums for UM/UIM coverage on multiple policies covering multiple cars in the same household. However, they would not allow the policy holder to use these multiple coverages at the same time.

Example:
Andrew and Samantha were both driving on the interstate when Samantha rear-ended Andrew’s car because she was distracted while talking on her cell phone. Samantha was uninsured. As a result of the accident Andrew had medical expenses and lost wages totaling $250,000. In addition to his liability coverage, Andrew had purchased and paid premiums on three separate $100,000 UM/UIM policies for each of his three cars for a total of $300,000.

Conclusion Before January 1, 2008:
Andrew’s insurance policy contained anti-stacking language which allowed the insurance company to limit Andrew’s coverage to only $100,000 of UM/UIM benefits on one car policy despite the fact that Andrew paid for UM coverage on 3 different vehicles, paying premiums for $300,000. His coverage was $150,000 short.

Conclusion After January 1, 2008:
Under the law change, Andrew was able to combine or “stack” his three policies for a total of $300,000 which was more than enough to cover his $250,000 in medical expenses and lost wages.

To be continued. Next up: Can “Set-off” and “Anti-Stacking Be Used Together?

In part one we learned about how Colorado Revised Statute 10-4-609 effects your insurance coverage and about thedifferent types of coverage; liability and uninsured and under-insured insurance.
Here’s how it all fits together.

What is “Setoff”?
Prior to January 1, 2008, your insurance company would be able to “setoff” or reduce the amount of UM coverage they would have to pay you by the amount of liability insurance available from the at fault driver.

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The newly revised Colorado Revised Statute 10-4-609, effective January 1, 2008, addresses uninsured motorists (UM) and under-insured (UIM) motorist claims and closes the loopholes that prevented consumers from receiving the full benefits they thought they were buying when purchasing UM/UIM coverage in Colorado.

What is Liability Insurance?
Property damage liability coverage pays for the physical damage to the vehicle damaged in the accident by the at-fault driver. Bodily injury liability coverage provides compensation for injuries sustained in a motor vehicle collision. The State of Colorado requires that every owner of an car have at least $25,000.00 in bodily injury liability insurance coverage.

What is Uninsured (UM) or Under-Insured (UIM) Insurance?
Despite the fact that Colorado law requires every automobile owner in Colorado to maintain insurance on their vehicle, many drivers who cause accidents do not have car insurance and are therefore “uninsured motorists.” In other cases, the driver who caused an accident may be insured but may not have enough coverage to pay for all of the injuries caused in the accident and is “under-insured.” We are frequently asked, “What happens to my case if the person who caused the accident is uninsured or doesn’t have enough insurance?”

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