New Uninsured-Underinsured Law Takes Effect January 1, 2008

by Stephen Wahlberg
Mr. Wahlberg is a personal injury attorney with
Hillyard, Wahlberg, Kudla & Sloane, LLP in Englewood, Colorado
He is the President- Elect of the American Board of Trial Advocates, Colorado Chapter
and on the Board of Directors for the Colorado Trial Lawyers Association

There is an enormous change in the law regarding uninsured/underinsured automobile policies written after January 1, 2008, -- a significant change that will effect nearly every major car wreck case in Colorado.

Uninsured motorist coverage will remain the same. However, underinsured motorist (UM) coverage will be allowed to "stack" on top of the Defendant's liability limits.

Prior to January 1, 2008, the underinsured carrier was given credit for the liability settlement in calculating the amount of underinsured limits. For example, if the Defendant had $25,000.00 in liability coverage and the Plaintiff had $100,000.00 in underinsured motorist coverage, the available limits were: $25,000.00 from the Defendant and $75,000.00 from the underinsured coverage for a $100,000.00 maximum claim.

For all policies written after January 1, 2008, (rather than all collisions after January 1, 2008), the Plaintiff is allowed UM access to their full UM limits. For example, the Plaintiff may obtain the $25,000.00 liability limits from the Defendant and stack the $100,000.00 underinsured coverage for a total benefit of $125,000.00.

The legislation received bipartisan support because it does not cost the government anything, consumers get what they pay for, it is optional rather than mandatory coverage, and insurance companies will be able to profit from the new policies.

RECOMMENDATIONS AND PRACTICE POINTERS

1. We recommend that you advise your clients to renew their auto policies immediately so that they are covered by the new law. In the event a policy renews June 1, 2008, but a horrible collision occurs May 1, 2008, -- the old law will apply, because this change of law only effects policies written after January 1, 2008.
2. We recommend that you advise your clients to carry high UM limits - the coverage is inexpensive, and there are a lot of uninsured or poorly insured drivers.
3. Place the UM carrier on notice of the claim at the same time you place the liability carrier on notice.
4. Provide the UM carrier a settlement package (all of the liability evidence, medical records, and an analysis of damages) at the same time you send it to the liability carrier.
5. Request that the UM carrier authorize the Plaintiff to proceed with the UM claim and request that the UM carrier approve any settlement with the liability carrier as soon as the liability carrier makes an offer.
6. Demand that the UM carrier make a payment of any settlement offer they make.
7. Bring a lawsuit against the individual Defendant and the UM carrier in the same action if the claims are not settled.
8. Watch your statute of limitations. Currently, the statute of limitations for an automobile accident is 3 years from the date of the collision. The statute of limitations for an underinsured motorist claim is 2 years from the date of the settlement with the liability carrier. However, we recommend that the lawsuit be filed against both the Defendant and the UM carrier within 3 years of the date of the collision due to some ambiguities in the statute.

If you would like to review and download the new statute in its entirety, it can be found at our website http://www.hwkslaw.com/.