Colorado Car Insurance Guide

Dec 22, 2021 | Personal Insurance

Car insurance is required in almost all states including the state of Colorado. Automobile owners are required to carry liability insurance with at least the minimum coverage. Driving without insurance in Colorado will result in penalties and license suspension. Aside from being a legal requirement, having car insurance coverage will protect you and your vehicle as well. So here is TeamAIS’ Colorado Car Insurance Guide.

Minimum Liability Coverage

The minimum liability coverage all Colorado drivers are required to carry:

  1. Bodily Injury (BI)
  • $25,000 per person
  • $50,000 per accident
  • This coverage pays for the injury or death of another person if you are at fault in an accident. It includes medical bills, lost wages, legal fees, and funeral costs. 
  1. Property Damage (PD)
  • $15,000 per incident
  • This coverage pays for the cost of repair or replacement of the other driver’s vehicle involved in the accident. It also includes damages to properties like a lamppost, fence, or even the house of another person. 

Beyond the minimum liability coverage that is required, you need additional coverage to ensure your protection on the road. Here are some options available:

Other Insurance Add-Ons/Riders:

Uninsured / Underinsured Motorist Coverage (UM/UIM)

Despite the fact that it is a legal requirement to have car insurance in Colorado, there are still some drivers who carry no insurance at all. They are the uninsured motorists on the road. There are also some whose insurance coverage is not sufficient to compensate for injuries. They are the underinsured motorists. 

The advantage of this coverage is that it pays for your injury or property if the at-fault driver is uninsured or underinsured. Your passengers are also included in this coverage. It can cover medical bills, lost wages, and pain and suffering. 

Comprehensive Coverage

This coverage pays for damages that don’t involve a collision. Examples are damages caused by fire, earthquake, flood, theft, falling objects, and other natural disasters. Cars that are stolen are also included in this coverage. This coverage is important if you live in a disaster-prone area. 

Collision Coverage

Collision coverage pays for the damage of your car when in collision with another vehicle or stationary objects like fire hydrants or walls. This can save you out-of-pocket expenses for the repair of your car and other properties. 

Medical Payments

This type of coverage pays for medical bills and funeral expenses for you and your passengers in an auto accident regardless of who is at fault. 

Insurers in Colorado are required to include a $5,000 coverage in all automobile policies but you have the option to opt out which must be done in writing. 

Penalties For Driving Without Car Insurance In Colorado

Driving in Colorado without insurance is subject to fines and penalties aside from facing higher premiums when you purchase a new policy.

  1. A minimum fine of $500 for the first offense plus suspension of driver’s license until you can show proof of insurance to the Division of Motor Vehicles.
  2. Moreover, a minimum fine of $1000 for the second offense plus a 4-month suspension of driver’s license.
  3. A minimum fine of $1000 for the third offense and subsequent offenses plus an 8-month suspension of driver’s license. 
  4. Four points against your driver’s license will be imposed
  5. The court may add 40 hours of community service on top of fines and penalties

Colorado Is An “At-fault” State

Colorado used to be a “no-fault” state meaning that when a collision happens, both parties go to their own insurer to claim for injuries and damages no matter who is to blame for the car crash. But since 2003, Colorado has changed its system to a tort or at-fault system. 

A tort or at-fault system means that in an accident, drivers go to the at-fault insurer to claim compensation. This is what most states follow. However, since Colorado drivers can be insured with just the minimum requirements, it may not suffice for certain injuries and damages and you have to go to your own insurer for additional claims. 

Rising Insurance Premium Rate In Colorado

Colorado has been on top of the list when it comes to high premium costs in auto insurance. The premium cost for the state minimum is around $500 to $600 per year and full coverage can cost you about $1500 to $2000 per year and it has been rising steadily every year. There are several factors that affect the rising premium cost and some of them are:

Population

More people are moving to Colorado which means there are more cars on the road. And if more cars are on the road, there are more accidents. Even those living on the outskirts may come to the city for work or leisure. This adds up to the number of vehicles on the road. 

Cost of Living

The cost of living in an area impacts the cost of premiums. The more expensive housing, food, and health care cost, the more expensive insurance premiums are. 

Rise in Car Accidents

More road accidents mean more claims. Fatal car crashes are rising and these driving trends also impact the price of auto insurance premiums. Car accidents rise because more people are driving but not everyone is cautious. 

Bad Weather

Colorado has experienced extreme weather conditions including hailstorms, tornadoes, and blizzards. These bad weather conditions will mean more car repairs and parts replacement that causes a rise in premium as well. 

Rising Repair Costs

Basic repair and parts replacement costs have been rising steadily. Add to that new equipment with the latest technology and the cost will surely double. Back-up cameras, temperature sensors, high-end stereos, heated and ventilated seats, all of these add to the cost of repair and replacement thus the rise in insurance premiums. 

Rising Medical Costs

Rising medical costs are another factor that causes the rise in auto insurance premiums. Insurance companies need to pay more each year for medical bills. And in Colorado, healthcare costs are expensive and these costs are passed on to consumers. 

In general, the more claims there are, the higher the premium will cost. This is happening in Colorado where the factors mentioned above are happening. Insurance companies are running their business to make a profit and what they can do to maintain their gain is to pass the cost to their consumers. 

Although the rise in car insurance premiums cannot be prevented anymore, you can still do some things to lower your rate. Here are some tips:

  • Take defensive driving courses. There are some insurance companies that give discounts if you have completed courses related to driving. 
  • Keep your car in good condition. A well-maintained car will lessen the chance of a breakdown that can cause an accident on the road. Do the following to ensure that your car is in tip-top shape.
    • Check your car’s fluids and make sure that it is at a sufficient level. 
    • Check your car brakes. Have them cleaned and changed when needed.
    • Change your car oils regularly to ensure smooth driving. 
    • Test your car lights. Make sure that your headlights, turn lights, brake lights are all working properly. 
    • Change your engine air filter when needed. Check your owner’s manual and see how often you should change it. 
  • Downsize your vehicle. A huge SUV will cost more to insure than a hybrid vehicle. Change your car to a simple commuter vehicle and you will save on your car insurance.

More tips…

  • Install an anti-theft device. Ask your insurance agent what type of anti-theft device they will accept that can help in lowering your insurance premium. 
  • Keep an eye on your credit rating. How good or bad your credit score is will affect the amount of insurance premium you have to pay. 
  • Keep your driving record clean. Pay attention to the road and be mindful of road signs. Avoid speeding tickets, DUI, and accidents. A good record can lower your car insurance premium. 
  • Bundle your auto insurance with your home policy. Some insurance companies give discounts when you get all your insurance coverage from them. 
  • Volunteer to pay for a higher deductible. If you are sure of your good driving skills and typically avoid accidents, offer to pay for a higher deductible that will generally lower your premium. 
  • Good student discount for your new or teen driver. If you have a teen driver in your car insurance policy, you can get a discount if your teen is a full-time student and can maintain an average grade of B. 

Auto Insurance in Colorado

We hope that our TeamAIS Colorado Car Insurance Guide is able to help you understand your auto insurance policy as a Coloradoan. Car insurance is your safety net on the road. Knowing that you have the best protection will give you the peace of mind you need. 

Purchasing car insurance in Denver, CO (or any other state) is now easy with Advantage Insurance Solutions (AIS). Located in Denver, Colorado, we are the #1 independent insurance leader in the industry today. Our team of experts can guide you in finding the right auto insurance at the best value. You can reach us and start saving money today!