With car insurance rates going up 15% or more for the average driver in Colorado this year, now is a good time to consult with Affordable Insurance before you renew your current policy with any other insurance provider in Denver or Aurora. When it comes to renewing your coverage, these changes can potentially be balanced by shopping around for the best rates, carefully choosing the type of car you drive, adjusting your driving behavior, and making sure you’re not overinsuring an older model vehicle.
Why is the cost of your insurance increasing because you live in Colorado?
According to the Zebra State of Insurance report, Colorado has seen some of the highest insurance increases in recent years. To understand why, we first have to look at overall national trends. Insurance costs do not stay the same over time. Anybody who began driving in the 70s or 80s can tell you that. It is normal for the cost of many goods and services to increase gradually. Between 2011 and 2016, the cost of car insurance increased by 10.8% nationally. It is an inevitable fact that we are paying more to insure our vehicles now than we did 5 years ago.
Interestingly, during the period from 2011 to 2016, not all states followed the pattern. Massachusetts experienced a 20% reduction in average car insurance costs. Colorado experienced the biggest jump of any state, with an increase of 48% in this period! The overall trend is for prices to increase, but why does this increase happen so severely in some states? There are a few distinct factors that have contributed to this situation in Colorado, many of which are outside of the control of the individual driver.
For example, the number of drivers in the state of Colorado has been sharply increasing in the last few years. In 2016 alone, more than 100,000 people moved to Colorado. A larger population means more drivers on the road, and having more drivers on the road means a higher risk of collisions and other accidents. Having more people to insure, unfortunately, means that the rate goes up for everybody.
Whether connected directly to the increased number of drivers or not, it is true that Colorado has become a less safe state to drive in. According to CODOT the number of fatal road accidents increased by 24% between 2014 and 2016. More specifically, fatalities of motorcyclists and pedestrians underwent significant increase. This is a huge spike to see in road deaths in such a short time, and this certainly affects the way insurance costs are calculated.
Sometimes the cost of auto insurance is not dictated by the number of drivers on the road or the behavior of these drivers. The type of weather endured by drivers in Colorado is on the extreme end of the scale, compared to say, California. Colorado drivers must deal with fluctuating temperatures, heavy snowfall, dangerous black ice and most significantly concerning insurance, hail. Colorado drivers file a lot of claims related to hail damage on their vehicles. With such a common risk factor affecting all drivers, the insurance rates are bumped up to compensate for money lost through payouts.
Another factor affecting the average auto insurance rates could be the trend for more expensive cars that is currently sweeping Colorado. As more drivers in Colorado choose vehicles that incorporate specialized parts and hi-tech components like cameras, sensors and Tire Pressure Monitoring Systems, traditionally simple and cheap repair jobs can now cost thousands of dollars. As the cost to cover the average claim increases, so does the cost of insurance here in Denver and beyond.
Unfortunately, it is not just the individual with the expensive custom car that has to bear this increase in cost. All drivers end up footing the bill as the average claim cost rises. This means that even if you drive an older, modest car, you’ll still experience an increase in cost driven by the trends in your state.
One of the more surprising factors to affect the cost of car insurance is the legal stance the state takes when it comes to lawsuits. If the state laws are loose, it can allow more expensive and more frequent lawsuits to be filed, meaning the insurance companies will spend much more than they do in other states to settle these lawsuits and give compensation. As long as there are legal loopholes to be exploited, the insurance companies will continue to charge more on premiums.
So, Colorado car insurance rates going up 15% – now what?
Unfortunately, there is not much the individual driver can do to combat any of these factors, except perhaps to put pressure on lawmakers to change the legal loopholes in relation to lawsuits.
Moving out of state may be another option, but this is a very expensive and inconvenient way to deal with the problem. Plus, it is difficult to know which state will be hit next by a spike in car insurance cost. As we have seen, it all depends on population fluctuations, recent weather conditions, trends and changes in the law. Running away is not the answer and not feasible for most of us. There are some measures you can take to keep your premium at an affordable figure.
The easiest way to avoid a sharp increase in your insurance cost is to drive safely. If you are found to be responsible for a road accident, you can expect a substantially increased insurance premium. This is due to the insurance company categorizing you as a risky driver. Cell phone violations and speeding can also increase your insurance costs, but the big one to avoid is a DUI. Drivers who receive a DUI conviction can expect to see their premium increased by an average of 80%.
Some other personal factors to be aware of include your credit rating, the type of car you drive and how you purchase your car insurance. If your credit rating suddenly worsens, you can expect the cost of your auto insurance to change. If you upgrade your vehicle to a high-performance sports car, it makes sense that your insurance premium will increase accordingly.
As we’ve seen, there is nothing we can do to stop car insurance rates going up 15% across Colorado this year. However, we can help each driver get the best deal on their yearly premium, no matter where you live. Simply contact Affordable Insurance for a free quote or assistance on comparing your options.