Why are Auto Insurance Rates in Colorado So High?
Every month 5000 people are moving into Colorado. Other than moving to be close to their kids, military relocation and job relocation, the biggest reason people give me for moving here is “it looks like a great place to live.”
There is a little bit of shock however, when we start discussing insurance rates. Several reasons are driving rates here in the Centennial State. Obviously, more people on the road driving more miles means more accidents and more claims.
Here are a couple reasons why premiums are higher:
Drivers glow with pride as they purchase new vehicles. These newer vehicles are more expensive to repair. Take windshields for example. windshields by far are the most common auto claim. In the not to distance past you brought your car in and a new piece of glass was simply put in. The average cost for that was $380. Today’s technology such as Lane Departure, Collision Avoidance and Automatic Park Assist all have ports connected through the windshield with a camera located on the rear-view mirror. Once the glass is in place the ports and camera must be re-calibrated. Sometimes it happens automatically, sometimes the glass technician is certified to do it and sometimes it needs to be taken to the dealership. The bottom line is that the average glass claim now is well over $800.
Just as cost of windshield repair has gone up, the cost of other repairs has also gone up. It’s not just replacing the car part, but the safety technology that often goes with it. Another factor going into increased auto insurance premiums is the rise of distracted driving. According to the National Center for Statistics and Analysis, 9 people are killed each day and 1000 people are injured in accidents involving a distracted driver.
Between one in three and one in four people in Colorado are uninsured. Less people paying in means higher rates. Medical costs and settlements for permanent injuries are on the rise as well which can lead to increased rates. According to the National Center for Injury and Prevention and Control the annual cost of medical care and productivity lost associated with automobile accidents is over $80 Billion a year.
Another factor which results in higher insurance premiums is the price of gas. We all like it when prices at the pump are low. But when prices are low we tend to drive more, a lot more. That leads us back to the first reason, more people on the roads, more miles driven, more accidents and claims.
So as Colorado grows and we drive newer vehicles with newer safety technology and all these other factors, experts predict annual average increases in automobile insurance in the range of 8 to 12 % annually.
This is where an insurance broker can help. We shop all the best carriers to get you the best range of policies to choose from. Reach out today and see how much we can save you. Click here for quotes!