Auto Insurance RatesThe cost of car insurance prices has spiked nationwide over the past year. And, with increases averaging 15 percent yearly, Colorado has been among the
hardest hit.

In Colorado, auto fatalities increased by 11% in 2016, hitting the highest point in 15 years and greatly outpacing population growth. Nationwide, the spike in auto deaths began in 2015, after 50 years of decreases in auto fatalities. There are 1.6 million car accidents and 330,000 injuries each year in the United States related to texting and driving alone.  Anytime a death occurs as a result of a car accident; the claim payout is significantly higher.

The National Highway Transportation Safety Administration says texting and driving makes you 23 times more likely to be involved in a crash. In fact, some studies indicate that texting and driving is more dangerous than driving while intoxicated. And multiple studies show that one out of every four car accidents are related to texting and other cell phone use.

But texting and driving isn’t the only reason for the recent spike in car insurance rates.

Our improving economy and lower gasoline prices mean people are driving more. And there are more people on the road, particularly in a high-growth state like Colorado. Many cars come with new technology that make them safer and lightweight aluminum bodies improve fuel economy. But both increase the cost of repairs after an accident.

Cars are more expensive than ever, which translates into higher repair costs — after an accident or for hail damage, a significant threat here in Colorado.  The average price of a new car in 2016 was $36,000, an increase of 44% since 2006!

Many people don’t realize that one of auto insurance companies’ largest expenses are health care costs. As health care costs continue to increase at record rates, auto insurance follows suit.

Colorado law and Colorado court decisions have also contributed to record car insurance costs. Problems unique to Colorado, such as Uninsured Motorist Stacking and Phantom Medical Costs, have translated to Colorado ranking among the top five states for auto insurance costs.  Every year bills are in the State House and Senate that could lower car insurance costs. I urge our readers and our clients to contact your legislator and ask them to support legislation to lower auto insurance costs in Colorado.

Given all the factors contributing to higher rates, some increase in car insurance prices is inevitable for most of us. But there are some things you can do to bring your costs down — or, at least, minimize any increases:

  • Combine your homeowner and car insurance. Many companies, including us, offer discounts for combining your homeowner and car insurance. The savings can average about 20%.
  • Maintain a good credit rating. A strong credit rating means lower insurance premiums in most cases.
  • If you are 55 or older, consider taking a defensive driving course, which can help lower your insurance costs.

Looking for help keeping your car insurance costs under control? I can help. Give me a call at 303-922-1001 and let’s talk about what you can do to keep your insurance rates as affordable as possible.