Since Colorado moved from a no-fault auto insurance system in 2003, drivers involved in auto accidents have often found they didn’t have the medical payments coverage they needed to pay for treatment of their injuries. A new law for 2009 requires car insurance companies to automatically add $5,000 of medical payment coverage to every Colorado car insurance policy.

Sounds good, right? Here’s the catch. The coverage costs approximately $60 a year and is automatically added to your Colorado car insurance policy. If you don’t need this coverage, you can simply sign the opt-out form and the coverage will be removed from your policy. But how many people actually read their auto insurance policies? Even with front-page notices and bold print, many people fail to even open their policy much less read it. The failure to decline this coverage will result in millions of dollars of car insurance premiums being paid by unaware Colorado drivers.

The added Colorado medical payments coverage is a good coverage to have if you need it. It will benefit drivers who have no health insurance or a high deductible plan. Even the well-insured driver with a $500-$1000 health insurance deductible will benefit by having this medical payments coverage to pay their health insurance deductibles. The automatic inclusion of $5,000 of medical payments coverage and the associated premium is a bit overkill. Colorado drivers who need the coverage will be thankful it is there, but it will come at the expense of thousands of other drivers who simply don’t know they can decline the coverage and save the premium.