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Rising Auto Insurance Rates in Colorado–Why?

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Over the last ten years, Colorado residents have been facing a significant rise in auto insurance rates, making it one of the costliest states in the nation to insure a vehicle. With a staggering 20% increase in 2023 alone and a whopping 53% surge over the past decade, Colorado now ranks as the second highest state in terms of car insurance rate hikes. This upward trend has placed Colorado 11th in the nation for the highest auto insurance premiums. Colorado isn’t a cheap state, anyway, ranking 6% above the national average for inflation, but even so, we’re seeing astronomical insurance rates that don’t exactly match up with the rest of inflation.

You may be asking why this is, having a mini panic attack every time you get your insurance renewal–and you’re definitely not alone! Behind this surge in increased premiums are several factors unique to the state of Colorado. One prominent contributor is the state’s unfortunate distinction as the second highest state per capita in damaging hail incidents. The frequency and severity of hailstorms not only result in costly vehicle damages but also prompt insurance companies to adjust premiums upwards to cover the heightened risk.

Moreover, in 2023, Colorado held the dubious honor of topping the charts in car theft per capita. The prevalence of auto thefts translates to increased risk, insurance claims, and payouts, further driving up insurance rates for residents.

Additionally, the rapid population growth experienced by Colorado in recent years has also taken its toll on the state’s infrastructure. Increased congestion and wear and tear on roads, particularly in the Denver metropolitan area, have heightened the risk of accidents, leading insurers to adjust premiums to account for the elevated likelihood of collisions and property damage.

Another significant factor contributing to rising insurance rates is the alarming rise in road fatalities and injuries. 2022 marked the deadliest year on Colorado roads in recorded history, with a record-breaking number of deaths and injuries among pedestrians and cyclists in 2023. The financial burden of covering medical expenses, property damage, and liability claims stemming from these incidents inevitably translates into higher insurance premiums for all drivers in the state.

As insurance companies grapple with mounting claims and liabilities arising from these various factors, Colorado motorists find themselves bearing the brunt of escalating insurance costs. While efforts to address these challenges, such as investing in infrastructure improvements and implementing stricter law enforcement measures, may offer some relief in the long term, it’s clear that Colorado residents will continue to face elevated insurance rates for the foreseeable future.

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