The semi-annual packet from Little Green Lizard Inc. told me that my auto insurance premium for the next six months was going up by almost 20 percent.
That seemed unreasonable. There'd been no accidents, no claims, no tickets. But buried deep in the pile of paperwork was a "Dear Policyholder" letter that explained most of the hike: Under a new Colorado law, I must buy at least $5,000 in "medical payments" coverage "unless you, the named insured, reject the coverage in writing."
Ah! The ever popular negative-option purchase. If a company tried such a ploy on its own, the attorney general's office would go after it hammer and tong, just as it did in the bad old days when record companies and book clubs would send you unsolicited products and bill you if you didn't return them.
But what's a legislature for if not to mandate scams that would otherwise be illegal?
If you haven't recently received a similar letter from your car insurer, you will, just before your next premium comes due. The law became effective Jan. 1.
Medical payments coverage provides extra money for you and your passengers in the event of an accident, even if it's not your fault. It is already an option, in amounts from $1,000 to $100,000, from most companies. But you have to select it.
Only an estimated 32 percent of Colorado policyholders choose to purchase it. Why? Because if you are a senior on Medicare, or already have health insurance, it's a redundant cost. You've already got such coverage.
The annual rate for $5,000 in medical payments coverage varies from company to company, but it is about $60 per car per year, said Carole Walker, director of the Rocky Mountain Insurance Information Association. My company is asking a little more than that.
The medical payments bill, which received virtually no media coverage, was promoted by something called the Trauma Care Preservation Coalition, made up of ambulance providers, first responders, hospitals and emergency room doctors. They argued that they weren't getting paid as quickly as they did under the no-fault insurance law, which Colorado had from 1974 to 2003.
But no-fault is expensive. A study commissioned by Gov. Bill Ritter last year found that premiums dropped 35 percent in the five years since the tort system was readopted.
But no-fault keeps crawling up out of the swamp because lawyers, ambulances, first responders and the various tangential health providers (remember the aroma therapists?) profited from it. They have lobbyists and the average health consumer doesn't. The legislature responds more quickly to lobbyists.
Auto insurance companies were opposed to the medical payments bill, which was an amalgam of three separate measures. But Walker said the industry finally agreed to the final version on grounds that it was the "least onerous" alternative.
To be sure, there is another negative option in insurance law: Uninsured (and underinsured) motorists coverage. But more than 90 percent of our policyholders are happy to have it. They know what's out there on the road.
The medical payments bill included one more peculiar provision: For the first time in Colorado (or any state's) history, it prioritizes payments by the insurers. The first specified payee is the ambulance company, followed by the ER docs, then the various levels of trauma centers.
Prioritization means delay. If the ambulance company is slow to bill, everybody else has to wait longer than usual.
Read your next auto insurance packet closely and discuss medical payments with your agent, if you have one. Don't pay again for coverage you might already have, or don't want.
I signed the opt-out page and then presumptuously subtracted the $100 for medical payments from the total bill. But then I forgot to put the opt-out page in the same envelope as the check. I sent it along later. I expect the little green lizard himself to show up on my doorstep demanding an explanation for my confusion.
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