By Allie Winter, LAW WEEK COLORADO
DENVER — The Colorado Trial Lawyers Association goes to bat today for a “make whole” bill co-sponsored by Rep. Claire Levy, D-Boulder, and Sen. Pat Steadman, D-Denver.
Most insurance companies today claim “segregation rights,” meaning if an insured person gets injured by somebody else, the injured person could be forced to come up with money to pay for his care.
Let’s say John Doe runs into your car (not your fault), and you end up injured. If Doe’s insurance caps out at $10,000 or if he has no insurance and your insurance company must front the bills, you are required to pay back your insurer before you receive any money for damages outside of medical expenses.
“This is where Make Whole comes in. The bill is saying that the person that actually sustained the uninvited should be fully compensated before any insurance company gets their money back,” said Mike Hodges, a past president of the trial lawyers association, which is backing HB10-1168.
Basically, the bill would prevent the injured party from having to reimburse his own insurance company for injuries that were someone else’s fault. “This is so regardless,” Hodges said. “We pay premiums to our insurance companies for protection.”
Make Whole states that the injured party will only pay its insurance company after receiving money for other damages. And if a company does get paid back, it will be responsible for a portion of the attorney fees.
This payback rule only applies in these John Doe situations, when someone else causes your injury and that person’s insurance cannot cover your medical costs, Hodges said. Every health insurance carrier that Hodges knows of entertains this clause, specifically in Colorado. But Colorado is behind as the Make Whole Doctrine already exists in one form or another in 36 other states.
Colorado’s tardiness in passing the bill falls on the Republican Party, Rep. Levy said.
“Historically, this state has not been very receptive to plaintiffs’ rights,” she said. “[It] tended to side with insurance companies instead. As long as Republicans controlled state legislature, they tended to favor the interest of insurance companies.”
Levy expects a fight from the insurance companies.
Health care insurers are very much opposed, Capitol lobbyist Patrick Boyle said.
Mark Hillman, a former state senator and former Colorado treasurer, has dubbed the bill the “The Trial Lawyer Hypocrisy Act of 2010.”
“While claiming to help injured parties receive full compensation for damages caused by the fault of someone else, what it really does is guarantee that the injured person, in order to be fully compensated, must hire a lawyer,” Hillman wrote recently.