Colorado Auto Insurance Rates
If you are in the market for Colorado auto insurance, it is important to compare rates with several different insurance companies to find high quality and competitively priced products.
Every insurance company that is licensed to do business in the state of Colorado must file their rates with the Colorado Division of Insurance and provide an explanation of these rates to ensure that they are not predatory in any way.
If you are new to buying insurance in the state, it can be helpful to visit the Division's Auto Insurance Premiums report, which provides you with a list of premiums in cities around Colorado.
Once you have a general idea of the rates that you can expect to pay, you should take time to learn how rating structures and different variables can affect your personalized quotes as you shop for cover.
Read on, and learn everything that you need to know about Colorado auto insurance rates before you find out the actual cost for coverage.
You should also start comparing auto insurance quotes using the FREE tool at the top of this page! Simple enter your ZIP code!
How Coverage Types and Limits Affect Your Rates
In the state of Colorado, you are required by law to carry a minimum amount of cover to driver your vehicle on public roadways. Drivers must carry liability insurance to protect other drivers on the roadway when they are negligent for causing damage or injuries.
The limits of liability that you must carry are as follows: $25,000 per person $50,000 per accident in Bodily Injury and $15,000 per accident in Property Damage.
If you select these bare minimum limits, you will pay a base rate for coverage. Choosing to purchase options types of coverage, which includes Med Pay, Uninsured Motorist, comprehensive and collision, will raise your rates.
It can also raise your rates and put you into another rating bracket to increase liability limits. Many people are not familiar with the fact that doubling your limits will not double premiums because the cost per thousand dollars in coverage will go down as your limits go up.
This is why it is very important to compare several different limits as you compare insurance premiums.
Personal Factors That Will Affect Your Rates
The coverage options and limits that you select are not the only factors that will affect your rates. As a part of each company's rating structure, they will consider many of your personal factors to assign you to different rating categories.
Some of these categories can raise rates and others will save you money. All of the rating categories help insurance actuaries and underwriters determine how much risk you present to the company.
Based on statistics, the more likely you are to file a claim, the more you will pay for the amount of coverage that you select. Here are some of the most popular categories that will be considered:
Driving History
One of the most common rating factors used to assess risk is checking and verifying an applicant's driving history. Your driving history will include your accident history, claims history and whether or not you have any moving violations. If you have a clean driving record, you are much more likely to pay low rates.
If you have a moving violation, your policy will be surcharged for a period of 36 months. Surcharges are also 36 months if you have a chargeable accident on your record.
Surcharges are based on risk and are not a punishment for having a blemish on your record. In addition to surcharges, a violation or accident can also disqualify you from receiving a Good Driver Discount.
Credit History
Insurance companies offering both auto and property insurance often use consumer credit information to determine how likely the applicant is to file a claim. About 95 percent of companies will use these credit-based scores in some way to calculate your rates. These scores are known to help predict the risk of a loss.
The more financially responsible a person, the less likely that person is to file a claim in the eyes of the insurer. Any company that checks your credit in Colorado must notify you in writing. It can be helpful to review your insurance score and see how this score can affect your premiums before shopping for coverage.
Age and Driving Experience
Many people assume that age is the only factor that plays a role in ratings. While your age can affect your rates, your number of years of driving experience is another important figure that the company will need to know.
The younger you are, the less driving experience you have, but when you are licensed later on in life a younger driver may have more experience than you.
Drivers with more than 9 years of experience will pay less than drivers who are newly licensed. At the other end of the spectrum, mature drivers pay more than experienced drivers when they are over the age of 65.
All of these figures are based on statistics and the age groups who file the most claims. If you have been licensed in another state, other than Colorado, provide this licensing information to receive your credit.
Vehicle Make and Model
Vehicle claims histories and reliability also plays a role in how much you will pay for insurance. You may assume that the year that your car was produced is the most important detail, but that is not the case.
Vehicle classification codes are used to calculate premiums, and these codes use claims statistics and damage amounts to determine how much to charge for a specific car.
A newer car may be considered safer and less expensive to repair and cost less than an older car to insure when you select full coverage. Be sure to consider the reliability of a car and its classification if you are buying a new car.
Annual Mileage and Usage
Two additional factors that can affect your rates are how you drive your vehicle (usage), and how often you drive (annual mileage). Insurance companies have three different classifications of usage: pleasure, commute, and business.
If you drive for pleasure, this is the most affordable rating category because you are not often driving in high traffic situations. If you are commuting, you may hit commuter traffic or be driving in high tension situations, which means that you are a higher risk.
Business use is the highest priced category because you will travel to multiple locations.
Annual Mileage is closely related but separate from usage. The more that you drive, the more risk that is present to experience a loss. Be sure that you estimate your mileage as close as possible to avoid paying more for coverage than you need to.
Most average rating bands are between 12,000 and 15,000 miles. If you drive more than this, you may be surcharged, and if you drive less, you may receive a special credit.
Marital Status
Your marital status can also impact how much risk you present. If you are a younger male, you are typically seen as a high risk, but if you are a younger male and you are married, you can lower your rates.
Single drivers pay more for coverage than married drivers. This is because the statistics show that married women and men are less likely to get into an accident. Because rates are always based on the statistics, this rule will apply to you even if you do not feel like it is accurate in your case.
Territory and Zip Code
Just because you are buying coverage from a Colorado provider does not mean that there are not different premiums in different zip codes throughout the state. Your territory, which is also called your garaging zip code by some insurers, will affect your rates depending on the population and how many claims are filed.
If you live in an area where several comprehensive claims are filed, you may pay higher rates than living in a smaller area where not many claims are filed. If you are moving, compare the rates in different territories before you relocate.
You may be able to lower the rates with alarm discounts or by living in a gated community.
Consider More Than Just Cost
While cost is important, premiums are not the only things to consider as you are shopping for coverage. You need to find a company that is financially stable and that have a good reputation in the industry.
You can check complaints through the Division of Insurance, financial rankings through Standard and Poor's, and then make an educated decision that is not entirely based on price.
Now that you know how rates are determined, it is time to do your homework. You can use rate comparison tools to compare premiums without having to contact each insurer directly.
Start getting your information together, use the FREE rating tool below, and then you can find the best policy from the best insurer catering to clients like yourself.