Two Democratic lawmakers are calling on the state insurance commissioner to investigate car insurance companies that have not dropped their rates by 15 percent since the switch from a no-fault system to a tort system.
In a letter to Insurance Commissioner David Rivera, Reps. Morgan Carroll and Fran Coleman cited recent testimony that premiums should have dropped by at least that much since the switch.
“We’re not running into people who have seen these price decreases,” said Carroll, of Aurora, who serves on a legislative committee reviewing auto insurance.
In 2003, the state switched from a no-fault system – where car-accident injuries were paid for no matter who caused the accident – to a tort system, where the at-fault driver pays the damages. The switch meant drivers no longer have to carry additional medical insurance, which promised cost savings.
Rivera said his office reviewed rates during the transition from no-fault to tort and found $3.6 million in excessive rates that were lowered. On average, consumers are saving between 15 and 27 percent, he said.
He said he won’t investigate companies that have not cut rates by 15 percent because, “I don’t think that’s the best use of our resources.
“If the goal is to make sure that consumers aren’t charged excessive auto insurance rates, we already do that up front with our rate-filing process and believe that that is the best approach,” he said.
While it is “pretty labor intensive,” Rivera said anyone could pull the records on a company to see why a rate was set.
But Coleman said others shouldn’t have to pull the records.
“He gets paid the big bucks … I don’t,” said Coleman, of Denver. “That’s his job. He wants to be the insurance commissioner watchdog, then you got to earn your money.”
Carroll said consumers were supposed to see “this gigantic cost savings.” Instead, he said, it is the insurance companies that are saving.
“They are collecting the same or higher premiums, and they’re providing half the services. Of course, they love it,” she said.
There’s also a question of value, Carroll said. Now that medical payment is not required, it’s “profoundly more expensive” to get it, she said.
But Rivera said not all drivers need medical coverage because they have health insurance, so tort is more of a value for them.
Staff writer Chris Frates can be reached at 303-820-1633 or cfrates@denverpost.com.
