Consumers in Colorado have faced a 50% increase in car insurance premiums since 2011.

Colorado experienced a 54.2% increase in average premiums, ranking third-fastest nationally. Only Mississippi (60.3%) and Montana (64%) exceeded this rate, all significantly above the 20% national average.

A May 2017 hailstorm in the metro-Denver area caused $1.4 billion in damages, explaining much of the rate increase.

Why Are Rates Rising?

Severe Weather and Hail Damage

Colorado ranks second in the nation for hail-damage claims, behind only Texas. The May 2017 Denver-area hailstorm alone caused $1.4 billion in damages, and these catastrophic weather events directly drive up insurance costs for all Colorado drivers.

Change from No-Fault to Fault-Based Insurance

When Colorado abandoned its no-fault insurance system in 2003, premiums initially fell. However, now insurers covering at-fault drivers bear the full costs of accidents—a structure that is typically associated with higher premiums over time.

Population Growth

Increased newcomers to Colorado have created more traffic on the roads, resulting in higher accident rates and more insurance claims. More people means more cars, more congestion, and ultimately more risk for insurers.

Rising Cost of Living

Rising living costs, particularly housing expenses, contribute to overall premium increases. As the cost of vehicle repairs, medical care, and other expenses climb, insurance payouts grow larger, pushing premiums higher.

Lower Gas Prices Mean More Driving

Increased gasoline availability and lower prices have encouraged more driving. More miles on the road translates to a higher likelihood of accidents and claims.

Recreational Marijuana Correlation

Between 2016 and 2017, premiums rose 3.2% in states with legal recreational marijuana, compared to just 1.6% in states that maintained full prohibition. While correlation does not equal causation, this is a factor that insurers and researchers have noted.

What Can You Do?

With over 150 insurance companies underwriting policies in Colorado, consumers have plenty of options. The best advice is to shop around with a broker who can help you find the best coverage for the right cost.

At All Access Insurance in Littleton, CO, we work with multiple carriers to find you the most competitive rates without sacrificing the coverage you need.

Written by Rick Cline, All Access Insurance