The Difference Between At-Fault and No-Fault Auto Insurance Systems
If you have been injured in an automobile accident in Colorado, you need to know how auto insurance laws affect your claim.
The first no-fault insurance law was passed in 1971 in response to perceived inequities of the liability system. According to the Insurance Information Institute, 12 states and Puerto Rico currently have no-fault insurance laws that impose restrictions on the right to sue.
Before 2003, Colorado was also a no-fault insurance state. This means that drivers were required to carry personal injury protection as part of their automobile insurance coverage and to file a claim with their own insurance company after an accident regardless of who was at fault.
To prevent litigation, the no-fault system requires each insurance company to compensate its own policyholders for the cost of minor injuries. The actual extent of coverage varies according to state. In some states, the compensation covers medical bills, lost wages, funeral costs, and other out-of-pocket expenses. Under certain circumstances, drivers may sue for compensation for severe injuries; for example, if death or severe disfigurement has occurred.
Colorado Changes to Tort System
In 2003, Colorado changed from being a no-fault car insurance state to one following a tort system. Since then, persons who sustain an injury or some other type of damage in a car accident have had several options for obtaining compensation.
- They can file a claim with their own insurance company, with the expectation that their insurance company will pay their expenses and then make a claim against the insurance company of the liable party.
- They can file a third-party claim against the insurance company of the at-fault driver.
- They can file a personal injury lawsuit against the negligent party in civil court.
Personal injury claims are based on the legal theory of negligence. Negligence is failure to take proper care in doing something, either by failing to act or by acting in a careless manner. To establish negligence as the basis for a personal injury lawsuit, an injured person must prove that the negligent person (the defendant) owed a legal duty to the injured person, that the offender breached that duty, that the injured person sustained damages, and that the breach of duty was the cause of the injuries.
Other Colorado Insurance Laws
Since 2009, Colorado has required auto insurance companies to offer drivers $5,000 in medical payments (med pay) coverage. Drivers may opt out of this coverage. But if no action is taken, it is automatically added to their policy. Med pay coverage provides for first-dollar compensation for injuries (i.e., no deductibles or co-pays apply), no matter who caused the accident.
In Colorado, insurance companies are also required to offer uninsured or underinsured motorist (UIM) coverage, which covers expenses if the policyholder is hit by someone without adequate insurance. But UIM coverage may be waived in writing by the policy buyer.
If you or a loved one has been injured in an accident, contact Colorado personal injury attorney Dan Rosen at (303) 454-8000 or 800-ROSEN-911 to schedule your free initial consultation.