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41.7% increase in insurance costs in Colorado lower than nationwide rise in cost

Back in 1989, the average expenditure on auto insurance in the state of Colorado was $515.31 which was just under the countrywide average of $551.95. In the 21 years ending 2010, the average expenditure in Colorado rose to $730.42 which represents a 41.7 percent increase compared to 1989. In the same duration, the nationwide average went up by 43.3 percent. This meant that Colorado went from being the 20th most expensive state for auto insurance to occupying the 25th spot.

Colorado’s insurance expenditure has not risen quite as much as the nationwide average partly because of the regulation that is place to protect consumer. The Consumer Federation of America released a study in November 2013 that shows that states that have strong insurance regulation achieved greater success in keeping rates low. Colorado has in place a File and Use system (where insurers are compelled to file rate changes before implementing them in the market) which has helped keep costs relatively low. However, states such as California have achieved greater success by implementing a Prior Approval system (where insurers are required to file rate changes and have them approved by the state before implementing them).

In the National Association of Insurance Commissioners (NAIC) report of 2012, Colorado received a Herfindahl–Hirschman Index (HHI) score of 940. The Department of Justice considers any score less than 1000 as competitive which means that Colorado is considered a competitive market and rightly so. Whereas average expenditure in 38 of the 50 states went up by more than the national average, Colorado’s went up by 41.7 percent.

The competitive nature of Colorado’s auto insurance market combined with the state’s insurance regulation has contributed to the slower rise in insurance costs. However, stronger regulation including a Prior Approval system will play a significant part in stemming the rise in insurance costs. California has demonstrated that strong regulation equates to lower costs by being the only state in the whole country where insurance costs went down (by 0.3%) over the 21 years from 1989 to 2010.

Auto insurance rates in Colorado and the impact of drunk driving on auto insurance rates

Colorado is the 12th least expensive state to buy auto insurance in the United States. With an average annual insurance rate of $1271, Colorado’s insurance rates are more expensive than Maine, Idaho, Iowa, North Carolina, Ohio, New Hampshire, South Carolina, Indiana, Washington, Arizona, and Wisconsin.

Within Colorado, Fort Collins is the least expensive neighborhood, with an average annual insurance rate of $921, well below the state average. Aurora, Loveland, and Longmont are also extremely affordable auto insurance neighborhoods, with average annual insurance rates of $934, $990, and $1002, respectively. Boulder, Estes Park, and Aspen are also relatively cheap, with average insurance rates of $1035, $1053, and $1076, respectively. Denver, on the other hand, is an expensive auto insurance neighborhood, with an annual average insurance rate of $1278.

Colorado classifies alcohol-related offenses into two categories: driving while ability is impaired by alcohol or drugs (DWAI) and driving under the influence of alcohol or drugs (DUI). A person who drives with a blood alcohol concentration (BAC) between 0.05% and 0.07% is considered to be driving while ability is impaired by alcohol or drugs (DWAI), and any higher than that is considered DUI. DUI entails heavier fines, more jail time and automatic license suspension.

Both alcohol-related offenses have a huge impact on insurance rates. In Fort Collins, a DWAI will result in your premium going up to $1713 per year. This is higher than the insurance rates in Denver, the most expensive neighborhood. In Estes Park, an alcohol-related offense could increase your premium to $1959. In Longmont, a single alcohol-related offense could increase your insurance rates from $1002 to a whopping $1864. Most insurance companies will keep your rates high for at least three years after your first conviction.

Taking a defensive driving course could help lower your premium. In Fort Collins, this would help bring your premium down to $1456, in Longmont to $1584 and in Estes Park it would bring your premium down to $1665.

Colorado Auto Insurance Rates

Below are the minimum, average and maximum insurance rate estimates for neighbourhoods in and around Colorado, CO.

Lowest Rate:$900
Average Rate:$1300
Highest Rate:$1700

Recent Savings From Top Providers in Colorado

Rank Customer Zipcode Amount Saved
1 80420 $256
2 80002 $249
3 80003 $247
4 80004 $245

Compare Auto Insurance Companies in Colorado

Company A.M Best Rating on
Financial Strength
Year Founded
Progressive A+ 1937
State Farm A++ 1922
Allstate A+ 1931
GEICO A++ 1936
Farmers A 1928
Nationwide A+ 1925
Liberty Mutual A 1912
American Family A 1927

Colorado Auto Insurance Requirements

Minimum limits of liability for auto insurance in Colorado as per CO State Laws

Bodily Injury Liability

  • $25,000 for death/injury of any one person, per accident.
  • $50,000 for all persons per accident.

Property Damage Liability

  • $15,000 per accident.

Colorado Car Insurance Average Rates by Make

In addition to the location, one key factor that contributes to the insurance rates in Colorado is the vehicle's make and model. Especially the vehicle's theft rates in Colorado

MakeInsurance Average PremiumView Details
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