Why Colorado Car Insurance Rates Have Been on the Rise

Most motorists would agree that the cost of auto insurance can be very high, and this can have a huge impact on the average person’s budget. There are ways in which you can help to reduce auto insurance costs, and all drivers should do this in order to avoid paying over the odds. This includes taking steps such as comparing policies and providers, choosing an affordable level of cover, avoiding auto-renewals on policies, and increase vehicle security.

Data has shown that Colorado car insurance rates have been on the increase, with premiums rising significantly over recent years. In fact, according to figures, car insurance in the state has risen at more than three times the pace of inflation in recent years, with premiums rising faster than most other states across the country. Between 2011 and 2017, there was a massive 54.2 percent increase in the cost of premiums. 

What Has Caused Rates to Rocket?

It is important to remember that the cost of car insurance can vary based on a range of factors. This includes the vehicle you drive, your driving history, your age, and where the vehicle is parked. Of course, it also depends on the level of coverage you take, and which provide you go through. However, there are also some other key reasons that have been put forward in relation to why auto insurance costs in the state have increased.

One of the reasons that were given in the report was periods of bad weather. This includes hailstorms and heavy rains, which can be common in the state. When this type of bad weather arrives, it increases the risk o accidents dramatically, and this then results in a mass influx of claims. As a result of the many claims made during spells of bad weather, insurance companies hike up the overall cost of coverage, so the premiums of all customers rise even if they were not the ones making the claims. 

Another reason that could be behind the rising insurance premium rates in the state is lower gasoline prices. When gas prices are lower, more people can afford to get behind the wheel, and this means more people on the roads. When this happens, the chances of an accident increase, and this results in an increase in the number of claims being made. Insurance companies then offset this by pushing insurance premium rates up.

Distracted driving has also been blamed for the increase in premiums, and this has been a problem for a long time and continues to be so today. There have been many campaigns and measures put into place to try to cut the instances of distracted driving, most notably the use of mobile phones when driving. However, people still continue to do this despite knowing about the dangers, and this then leads to more claims. 

It is also thought that legalized marihuana could be having an impact on insurance premium costs in the state, as this means that more people are likely to be driving while under the influence of the drug. This then means an increased risk of accidents, which means a rise in the number of claims and an increase in insurance premiums. According to officials, this has had an impact on insurance premiums in nearly all states where it has been legalized. 

A huge problem that affects Colorado and other states across the country is the number of drivers who do not have insurance. The cost of insurance means that some drivers take their chances and get behind the wheel without any coverage. Some people may not even be legally allowed to drive for one reason or another, and therefore are unable to get insurance. This then leads to huge issues in the event of an accident, and it means that insured drivers then see their premiums increase dramatically. It is thought that around 16 percent of drivers in Colorado actually have no insurance in place. 

The cost of car repairs and servicing is another factor that contributes to the number of accidents and claims, which then affect insurance premiums. Some people cannot afford to get repair work carried out on their vehicle, and this then leads to driving with a car that has some serious issues. This then increases the risk of being involved in an accident and having to make a claim, which then pushed premiums up for everyone else. 

A Range of Factors

As you can see, a range of factors contributes to the rising cost of vehicle insurance in Colorado. The more claims insurance companies receive, the higher the rates of drivers will go. Insurance companies must be in a position where they are not paying out more in claims than they are making in premiums, which is why the cost of insurance has rocketed for drivers across Colorado. All of the above situations can result in a rise in claims, and this then means a hike in insurance premiums across the board.

Of course, individuals can still take steps to reduce their insurance premiums by comparing costs from different Colorado insurance companies. In addition, it is important that you also compare policies to ensure the one you choose is suited to your needs. Additional steps such as parking your vehicle in a garage or driveway and making sure is has an alarm will help to further reduce the amount you pay for your coverage.