Car Insurance in Colorado

After spending only 40 minutes shopping, I saved almost $500.

Colorado’s middle-of-the-road auto insurance regulations create a decent amount of competition among insurers — competition that drives the state’s average monthly premium to $100, which is $30 cheaper than the national median. Don’t think you have to settle for average, though. My research shows that you can knock hundreds off your rate simply by comparison shopping. (It definitely payed off for me; I ended up finding an extra $500.)

After comparing car insurance quotes from five different providers, I discovered that The Hartford was my cheapest option at $363 a year. Before you get too excited and think that you can shortcut the quote process, understand that, while The Hartford was cheapest for me, it may not be the least expensive for you.

Every company has its own methodology for determining your risk level, which is based on factors such as age, gender, marital status, location, driving record, et cetera. What’s more, not all companies assess risk in the same way. All that’s to say you can’t assume you’ll get the same rates that I did — you’re going to have to go through the quote process yourself. It’s best to do as many as you can stomach, but at least do five.

The key to comparison shopping is to know what insurance coverages you need before you start, and then to find out how much those coverages will cost from a number of companies. Comparison shopping takes time but can save you money. — The Colorado Division of Insurance

In general, a quote can be as easy as spending 10 minutes of your time clicking through an online form as long as you are properly prepared with the necessary information. Of course you will need to have easy access to your basic personal information (date of birth, address, ZIP code, marital status), but you will also need access to information about your car. The easiest way I’ve found is to copy down your VIN, but if you don’t have that handy, then you will need the model, make, year, and body style of your vehicle. It’s also important to know which coverage you want from the get-go, and I seriously recommend going bigger than the state minimums.

Get Quotes Now

Enter your zip code to compare rates from some of my top recommendations.

Our Top 5 Picks for the Best Car Insurance in Colorado

I began my search for the best car insurance by getting five quotes from the most trusted and highly rated insurance companies in Colorado.

Insurer My quote
The Hartford $363
American Family Insurance $549
GEICO $472
State Farm $484
Liberty Mutual $848

I looked at two different criteria when choosing these companies: customer service and financial stability. I started by finding those with the highest J.D. Power ratings in my area (J.D. Power is world-wide leader in customer satisfaction reports). Then I checked the finalists against the financial solvency ratings provided by A.M. Best. In the event of an accident, I need to be able to depend on excellent customer service from a company that would be capable of fulfilling their financial responsibilities to me. So between those two criteria, my bases are covered.

What I discovered was sometimes the company that’s easiest to get a quote from is not always the company that will provide you with cheap car insurance. The Hartford was the only company that required me to get a quote from a representative over the phone, but they ended up offering me a deal that was more than $100 dollars cheaper than the next cheapest company, American Family Insurance. (Other than having to use my phone to get a quote rather than getting one online, my experience with The Hartford was just fine.)

GEICO and State Farm were both within $20 dollars of each other and were very easy to get a quote from; they both gave me a quote in the $375 range per year. Liberty Mutual was a shocker as they quoted me a whopping $848 for the same basic insurance as everyone else! It’s worth noting that American Family Insurance was quite a bit more expensive because it required me to select uninsured motorist coverage. So, if you’re looking for a bit more than low-end coverage, American Family could wind up giving you a more competitive price than it gave me — you won’t know until you get the quote.

Even If You’re Happy, It’s Best to Shop for a New Policy Every Couple of Years

The last few years have seen a lot of changes in the way insurance companies calculate the price of your auto insurance. Many insurers no longer consider your risk alone; they analyze a variety of non-risk related factors (including your online shopping history, how long you have been with your current insurance company, and even your social media habits) to determine your propensity to shop around. It’s a technique called “price optimization,” and insurers use it estimate how likely you are to leave them if if your rates increased. All of this is, of course, an attempt to maximize profits without losing your business.

In January of 2015, the Consumer Federation of America sent a letter to Insurance Commissioner Marguerite Salazar condemning the practice of price optimization and specifically accusing Allstate of using this practice in Colorado. It stated that price optimization results in “unfairly discriminatory prices;” a stance 15 other states have taken as of 2016. Unfortunately, Allstate is not the only company to use price optimization. Earnix asserts that at least 45 percent of all major companies use price optimization when determining customer’s premiums.

There is good news, as, in October of 2015, the Colorado Department of Regulatory Agencies (DORA) released a bulletin to clarify their interpretation of Colorado’s statutes as they relate to price optimization. Any companies found to be using price optimization 90 days after the release of the bulletin may be subject to “disciplinary action.” While this action will help to protect the consumer from what many consider to be unfair discrimination, it still may be necessary to take steps of your own to protect yourself.

The best thing you can do is, thankfully, very simple: Shop for insurance quotes every couple of years. This will not only let you potentially find cheaper insurance as your personal situation changes, but it will also let insurance companies know that they can’t take you and your business for granted, which will help protect you from rates that are gradually increased for no apparent reason.

Colorado’s Minimum Coverage

The Bare Minimum

Colorado Law requires that resident drivers purchase liability insurance for bodily injury in the amounts of $25,000 per person and $50,000 per accident. Liability insurance covers any damage you do to another person’s property is required in the amount of $15,000. (Most insurance companies write this as $25,000/$50,000/$15,000 or 25/50/15.)

The Best Car Insurance is Not Just Cheap Car Insurance

Many drivers want to opt for the least expensive premium with the bare minimum of state-required coverage, but often times that can be a mistake. Even I used to think I’d be fine with the legal limit. I thought that as long as I was hitting the bar, I’d be fine, but I’ve since changed my opinion. Here’s why:

  • On average, drivers have accidents every 17.9 years.
  • The average cost of permanently injuring someone in an accident is at least $80,700.

If I were to purchase liability insurance from GEICO at the state minimum ($25,000/$50,000/$15,000), my cost per year would be $472. However, if I purchased coverage that would provide a more realistic amount of protection in the amounts of $100,000 per person, $300,000 per accident, and $25,000 property damage, I would only be paying $557 — that’s only an increase of $85 per year.

If you were in an accident that seriously injured several people, you could easily be responsible for $150,000. With the minimum required insurance, you could still be sued for $100,000. However, if you wisely invested the $85 per year for the $300,000 liability insurance, you would have only spent $1,500 dollars in the average 18 years since your last accident. When you put it in perspective, you can see why it is always worth to to spend a few extra bucks for better coverage.

It’s always good to consider adding uninsured and underinsured motorist insurance, too, as no one wants to be hit by an irresponsible person and be stuck with the bill. Collision and comprehensive can also be a good investment depending on your situation. If you own a more expensive car, you always want to consider protecting your investment, as one accident could leave you in a really tough spot. If you have a lease or loan on your car, you’re likely already required to have comprehensive coverage.

What happens if I’m caught without insurance?

If you are caught driving without the proper insurance, you will be subject to increasingly harsh penalties based on the how many times you have been convicted of this offense. First-time offenders get four points put on their driving record and have to pay a minimum fine of $500. You will also have your license suspended until you can prove to the DMV that you have the proper insurance. On your second offense, you will be fined $1000, and automatically have your license suspended for four months (third and following offenses result in an eight month suspension). When you hit 12 points from any infractions, your license is suspended for one year.

Get Quotes Now

Enter your zip code to compare rates from some of my top recommendations.

Beat the Average Premium: 9 Ways to Snag Cheap Car Insurance Rates

While there are a lot of factors that determine how much you pay for insurance that you cannot change (only time can age us after all!), thankfully there are some steps you can take to lower your premium. A defensive driver course is always a great place to start — most insurance companies give you a hefty discount if you complete one. Many insurance companies also have a program that installs a small device in your car to monitor your driving habits, and, if you drive responsibly, they will give you a discount. Here are a few more ideas on how to save.

Nine Ways to Lower Your Car Insurance

FAQs

Why are Colorado’s rates so average?

What to Expect
Average Monthly Premiums
United States $139
Colorado $100
Denver $108
Pueblo $107
Aurora $105
Lakewood $103
Colorado Springs $101
Arvada $98
Source Quadrant

Colorado’s rates come in barely below the national average (only about $60 less). While that’s not terrible news, it’s also not great either. The reasons for this aren’t totally clear, but the fact that Colorado does not require extra insurance coverage (like uninsured motorist coverage personal injury protection insurance) helps to create more competition which drives the rates down. However, there are a number of larger population centers, which means more drivers and more accidents which tends to drive the rates up. What you are left with is a state where your insurance costs are almost exactly average in the U.S.

What if I’m not a full-time resident?

If you establish residency in Colorado, then you must have the state required minimum insurance. Colorado defines residency as owning or operating a business in Colorado, being employed in Colorado, or residing in Colorado for 90 consecutive days. Once any of these three occurs, then you are considered a resident and along with registering you car in the state you must purchase valid insurance for Colorado.

The Bottom Line

Because there are so many different factors to consider, and each company views them different, it’s very important to get as many quotes as possible. Otherwise, you’re probably not going to find the best car insurance policy possible. It’s also well worth the investment to not settle for the bare minimum of insurance required by the state, but to invest in insurance that will protect you financially should the worst occur and you have a serious accident. If you have even ten minutes now, get a quote and see how it compares to your current policy.

Get Quotes Now

Enter your zip code to compare rates from some of my top recommendations.

Simple Share Buttons
Simple Share Buttons