River rafters win insurance reprieve

Taylor Roll with Adventure Bound, a Grand Junction rafting company, gets gear ready for a river trip.

The Colorado Parks and Wildlife Commission tossed a lifeline to river raft outfitters Friday by voting unanimously to embrace the realities of the state’s auto insurance market.

During a two-day meeting in Grand Junction, the 10-member commission approved emergency rules that lower coverage limits to make auto insurance affordable for the outfitters. 

The emergency regulations remain in effect for the next 120 days while permanent rules make their way through the standard procedure, a commission spokeswoman said.

Owner and president of one of the area’s largest and oldest river raft outfitters, Tom Kleinschnitz of Adventure Bound River Expeditions, said the vote amounted to a stay of execution for river rafting businesses around the state.

Launching its 51st season, Adventure Bound has been a source of income and adventure for Kleinschnitz since 1971. He decided to buy the business in 1985.

“It’s an amazing way to make a living,” he said.

On the eve of Adventure Bound’s first river tour of the year, Kleinschnitz said Friday he already spent $20,000 to buy insurance coverage for the season, primarily because he takes his groups across state lines to Utah, where higher coverages are already required.

But there are 162 licensed river outfitters registered in Colorado, many smaller in size than Adventure Bound, most of which will benefit from the lower coverages approved by the commission Friday, Kleinschnitz said.

In all, Adventure Bound takes as many 800 clients a year on multiday tours down the Colorado River, which is flowing high this year with some of the best rafting white water ever, Kleinschnitz said.

This is not the first time river raft outfitters have had to ask regulators for relief from insurance coverage that just wasn’t for sale on the market, he said.

For example, when the federal government tried to raise the general comprehensive liability limit to $5 million for outfitters operating in national parks last year, Kleinschnitz and his fellow outfitters lobbied the park service to get the limits lowered to match products available on the insurance market.

With the help of U.S. Sens. Michael Bennet and Mark Udall, both D-Colo., they succeeded, Kleinschnitz said. Had they failed, outfitters would have been required to pay as much as $100 or more per customer to cover the cost of insurance.

“It could have ended my business,” he said.

Commercial rafting had a $145 million economic impact on the Colorado economy in 2013, according to an end-of-year report by Colorado River Outfitters Association.

Overall, the report showed an increase of 13.5 percent from 2012’s $127 million. In addition, rafters spent nearly 50,000 more user days on Colorado rivers in 2013, the report showed.

In a repeat of recent history, rafting companies were facing the possibility of going out of business, this time because the state’s insurance market proved unable to provide affordable auto liability insurance coverage that complied with the law, Kleinschnitz said.

The thin market is one reason the commission decided to approve the emergency rules.

Earlier this year, Colorado State Patrol adopted rules for the operation of all commercial vehicles over 10,000 pounds gross vehicle weight operating in the state. The regulations require passenger vans up to 16 people to carry $1.5 million of liability coverage. Larger buses must maintain coverage of $5 million.

The rules apply to all intrastate and interstate motor carriers and commercial vehicles, including rafting companies that use vans to transport boaters and gear to and from the river.

“The rules requiring significant increases in liability limits have proven practically impossible ... to meet,” the Colorado River Outfitters Association said. 

Unlike other users of commercial vehicles, river outfitters face a very thin insurance market that is unprepared currently to offer the $1.5 million and $5 million limits at a sustainable price, the commission decided Friday.

Under the emergency rule, the minimum amount of coverage for commercial vehicles with a seating capacity of 16 or more will be $1.5 million combined single limit instead of $5 million.

The minimum amount of coverage for commercial vehicles with a seating capacity of 15 or less will be $1 million combined single limit instead of $1.5 million.

The commission waived the normal rulemaking process since the river rafting season has already started.

The emergency regulation protects the public welfare because “it protects the public interest in participating ... in recreational activities, provides reasonable liability protection for the participating public and allows critical relief for river outfitters whose ability to conduct regular business operations has been diminished,” the commission said.


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