Smart Auto Insurance Blog

Colorado regulators recently released their report which summarizes the Division of Insurance’s complaint handling activity from 2009-2010.  According to the article “Report: Regulators Recover $2.8M for Auto Insurance Policyholders” by PRWeb found on SFGate.com, the DOI’s mediation of about 5000 formal complaints during this time period led to the recovery of over $12 million for the state of Colorado’s insurance consumers.

$2.8 million of this sum are a result of complaints and protests filed against auto insurance companies operating in Colorado.  Colorado continues to receive the greatest proportion of consumer complaints filed with the DOI for the last 4 years.  Formal complaints and protests made against car coverage providers accounted for about 55% of the total.

Colorado allows policyholders to file complaints about disputes over issues with coverage.  Unlike most other states though, it has a separate category for protests against auto insurance companies which usually handle challenges against surcharges, policy cancellations, as well as coverage reductions.  Formal complaints have a high rate of confirmation while protests are much lower, so this can cause Colorado to have inflated numbers.  At any rate, Colorado auto insurance policy holders will get back some of what they lost from poor relations with their insurer.

According to insurancejournal.com, the Colorado Division of Insurance has announced that Allstate Insurance Company is lowering their auto insurance rates in Colorado.  The rate reduction will save Colorado drivers almost $7million in premiums.

Allstate cited favorable claims loss experience over the past few years which has allowed them to profitably lower their rates for private passenger auto insurance.

Based on 2003 market share data, the top automobile insurance companies in Colorado were:  State Farm (23.3% market share), Farmers (14.4%) American Family (10.4%) and Allstate (8.1%)

More information about Colorado Auto Insurance.

Brooke Thatcher from KUSA reports that the number of drivers without Colorado auto insurance is growing, from an already shocking 15% in 2007. The economy is causing people to cut back on car insurance, but doing so could be more dangerous to their finances in the long run. If you get into an accident while driving uninsured, your income and assets could be garnished!

Thatcher suggests safer ways to save money on auto insurance:

• Raise the deductibles for comprehensive and collision coverage, and or/lower their coverage limits. (However, don’t skimp on uninsured motorist or liability coverage.)
• Talk to your insurance provider; they may be willing to help you modify your plan.
• Get auto insurance quote comparisons from several companies, and see if you can get a better deal on your rates.

Auto insurance companies warn that a new bill in the Colorado state legislature could increase rates for motorists, claims Bob Mook of the Denver Business Journal. In 2003, the state switched to a tort system (where insurers pay a percentage of costs based on whose fault the accident was, going to court to settle disputes), but the Colorado No-Fault Motor Vehicle Insurance Act would reverse that change.

Governor Bill Ritter says that the tort system saves drivers about $322 per year on average, a 35% decrease from auto insurance rates under the no-fault system. A representative of the Rocky Mountain Insurance Information Association claims that Colorado auto insurance premiums have dropped from being the ninth-highest in the nation to 23rd-highest since the reform. According to Bob, insurance companies believe that no-fault insurance, where each insurer pays all expenses for their driver without assigning blame, is easily defrauded.

RateWatch recently released its fourth quarter 2008 report, which highlights the poor consumers in states with the greatest increase auto insurance rates. Believe it or not, during this recession premiums actually increased by 8% over the past year!

Highest auto insurance premium increases:

1. Washington, D.C. auto insurance rates increased by 10.5% in Q4.
2. Utah auto insurance rates followed close behind with a 10.2% increase.
3. Colorado auto insurance rates saw a less severe, but still significant 6.1% increase.
4. Delaware auto insurance rates went up by 5.6% in Vice President Joe Biden’s home state.
5. Wyoming auto insurance rates increased by 5.5% in the fourth quarter.

9 News Colorado reports that a new state law (which came into effect on January 1st) is likely to increase auto insurance rates for Colorado drivers. The law requires insurance companies to automatically enroll policy-holders into a MedPay plan that provides an additional $5,000 in medical coverage. Ever since Colorado repealed its no-fault auto insurance law in 2003, there have been many problems surrounding the reimbursement of medical costs caused by an accident. This program is intended to fix many of these issues. Consumers can only opt out via a written form.

The extra coverage can increase your yearly premiums by $40 to as much as $1,200 per car, depending on your auto insurance rate. MedPay coverage isn’t really necessary if your health insurance covers car accidents, but a lot of policies don’t. Experts say you should think carefully before trying to reduce your auto insurance premiums by dropping out of the program; if you end up in a crash not covered by your health care plan, you may end up paying far more in the end.

More information about Colorado auto insurance.

(Photo credit: paraflyer under CC 2.0)