People injured in Colorado car accidents will have a better understanding of the insurance coverages available to cover their losses after a new state law forces insurance companies to come out of the shadows with their policy coverages.
Previously, some insurance carriers refused to provide plaintiffs with information about the at-fault driver's insurance coverages until the plaintiff filed a lawsuit. This meant that plaintiffs and their attorneys had to negotiate in the dark, guessing at the insurance limits that were available to compensate the injured plaintiff.
This forced plaintiffs to make medical decisions without knowing whether there was enough insurance coverage to pay for a needed surgery, or other treatment that they otherwise would not have been able to afford. The lamentable result is that some plaintiffs declined to get reasonable and necessary medical treatment for fear the at-fault driver did not have enough insurance to cover the treatment.
The Colorado General Assembly addressed this dilemma in the 2019 legislative session by enacting a law that begins to level the playing field.
C.R.S § 10-3-1117 went into effect on January 1, 2020. It forces insurance carriers for at-fault parties to provide the following information within 30 days when requested in writing:
- The complete insurance policy, including any endorsements;
- Each known policy of insurance covering the named insured, including excess or umbrella insurance;
- The name of the insurer;
- The name of each insured party;
- The policy limits of the liability coverage;
- The coverage of each known insurer of the insured party.
The law provides a penalty of $100 per day for every day after 30 days in which the insurer fails to provide the requested information. The new measure also allows the plaintiff to recover attorney fees and costs incurred to enforce the penalty.
Why do plaintiffs need to know this information?
Consider the following example: A driver is rear-ended by another vehicle at 30 mph. The driver who was hit suffers a cervical disc herniation of which there is a recommendation for surgery at an estimated cost of $60,000. The injured person wants to have the procedure but does not have health insurance and cannot afford to pay out of pocket. Before C.R.S § 10-3-1117, the plaintiff may not have been able to find out if there was enough insurance available under the at-fault driver's policy to cover the needed procedure. Without this information, the plaintiff may have held-off on the surgery, living with chronic pain and the risk of greater damage to the spinal cord.
Now that C.R.S § 10-3-1117 requires the insurance carrier to reveal the coverages, the plaintiff will be in better position to make medical decisions based on the amount of coverage that is available. If the injured person in the example above learns that the at-fault driver has $100,000 in liability coverage, the patient would be able to proceed with the needed surgery knowing they would not be incurring crushing debt to do so.
This is a welcome development for plaintiffs in Colorado.
Although insurance carriers will argue that plaintiffs may seek excessive or unnecessary treatment if they learn that the at-fault driver has robust liability coverage, this argument is a red herring. Insurance carriers still have the same due process rights to challenge, refuse and litigate unnecessary and excessively priced treatment.