Uptick in Auto Accidents, Increased Traffic Congestion, and More Expensive Repair Costs to Blame
Managing the risk of driving, covering the costs of broken windshields, quarter-panel dings, twisted bumpers, and bodily injuries, is costly for most vehicle owners, but it costs even more if you’re a Colorado resident. Drivers across the state have been paying more and are likely to keep seeing higher insurance premiums, even if with spotless driving records.
You can blame it on more-expensive cars, more drivers, more auto accidents, more natural hazards and, some say, the state’s legal system. Overall, car insurance premiums are higher than they’ve ever been. The new average U.S. rate, $1,427, is 20 percent more than it was in 2011. Michigan residents are paying the most for insurance these days, an average $2,610 per year. North Carolina drivers are getting the best deal, an average $865 a year
Colorado automotive insurance policies are increasing so much that the state is No. 3 in the United States for inflated car insurance rates, according to a story by The Denver Post writer Aldo Scaldi. On average, Colorado drivers have seen their insurance premiums rise 54.2 percent since 2011, triple the U.S. inflation rate over the past six years.
The increase, between 2011 and 2017, placed behind Montana’s 64 percent jump and Mississippi’s 60.3 rise. Nationwide, rates climbed only 30 percent during the six years. The conclusions are drawn from a new survey, 2018 Zebra State of Auto Insurance, by online publisher Insurance Zebra Inc.
Despite the increases, Colorado’s premiums are still only moderately expensive, compared to other states. The survey shows Coloradans pay an average $1,435 premium, putting it in 18th place across the country. In 2011, the same policy would have cost $944 a year.
You can bet that Colorado’s rates will increase even more when you renew in 2018. The tendency towards hailstorms is a constant factor in insurance rates, but the new survey didn’t include the big one, the massive hailstorm of May 8, 2017, The Post reported. That storm caused a record $1.4 million in damage, mainly structural but with a huge part coming from smashed windshields and dinged auto bodies, according to the Rocky Mountain Insurance Information Association. From 2013 to 2015, Colorado was second only to Texas for the highest number of hail-related claims: 182,591. It’s enough to justify the Front Range’s reputation as the center of “Hail Alley”, receiving the greatest frequency of large hail in North America.
To get a good measure of varying premiums across the country, researchers surveyed the price a hypothetical 30-year-old single man with a good driving record and a 2013 Honda Accord EX would pay in counties and ZIP codes across the country.
Denver residents are feeling the pinch this year: the city’s average rate, $1,577.56, is a $64.08 (4.23 percent) increase over the prior year. But that’s not the worst, only the 13th-highest rate in the state.
The 5 Colorado cities with the highest average premiums are:
- Conifer, $1,624.00, up $79.00 (5.11 percent)
- Boone, $1,617.00, up $67.00 (4.32percent)
- Pueblo, $1,607.00, up $64.20 (4.16 percent)
- Evergreen, $1,600.00, up $78.00 (5.12 percent)
- Kittredge, $1,600.00, up $77.00 (5.06 percent)
Here are the 5 Colorado cities with the lowest average premiums:
- Loveland, $1,215.00, up $48.00 (4.11 percent)
- Laporte $1,227.00, up $50.00 (4.25percent)
- Fort Collins $1,246.67, up $51.00 (4.27 percent)
- Fruita, $1,250.00, up $57.00 (4.78 percent)
- Berthoud, $1,250.00, up $52.00 (4.34 percent)
What Else Is Making Insurance So Expensive?
So, what other factors could make average Coloradans stand out from average people elsewhere? Price-shocked motorists can blame the increasing numbers of serious and fatal auto accidents in Colorado and the reasons behind them. At least 642 people died from Colorado auto accidents in 2017, a 42 percent increase from 2010, the Colorado Department of Transportation said.
Some will blame the crashes on the state’s increasing population and more-crowded highways: Colorado added an estimated 77,059 new residents in 2017, increasing its population to more than 5.6 million by July 1, 2017, The Denver Post reported, citing the U.S. Census Bureau and the state demography office. In a longer perspective, the state added 577,829 residents since 2010, giving it an 11.6 percent growth rate, the six-highest in the United States.
Legalized Marijuana a Cloud Over Colorado Rates
Neil Richardson, from the survey publisher Insurance Zebra, told The Post that Colorado’s marijuana laws must be considered as a factor behind higher insurance costs. Insurance rates have increased in every state where pot has been legalized, except Massachusetts, he said. In states where marijuana is legal, premiums increased an average of 3.2 percent from 2016 to 2017. Other states saw their rates increase an average of only 1.6 percent.
Safer = More-Complicated = More Expensive Cars
Fixing a wrecked, new car today is a completely different proposition from what it was to fix one 30, 20, or even 10 years ago. The very things that are making new cars safer today — bumper cameras, crash-avoidance sensors, and other gizmos to reduce serious accidents — make fixing those cars more expensive. A small repair that might have cost several hundred dollars two decades ago could cost thousands of dollars today.
Rates Rebounding From No-Fault Insurance Days
According to Carole Walker, spokeswoman for the Rocky Mountain Insurance Information Association, Colorado’s insurance market is finally rebounding from the state’s decision to drop its no-fault insurance system in 2003. No-fault insurance requires insurers to pay for their own customer’s medical costs, no matter who was to blame for an accident. Under our current system, the burden is on the insurer covering the driver who was at fault in an accident.
Walker told The Post:
“We were in this grace period after no-fault, which took away mandatory coverages. …Colorado is now on this collision course. There are some factors we can control and some we can’t.”