Why Is Car Insurance So Expensive In Colorado?

Car insurance has been one of the major contributors to inflation in the U.S. in recent years. In 2024, many drivers across the country saw their auto insurance rates increase significantly, with Colorado experiencing similar hikes. Car owners in Colorado are facing some of the highest insurance premiums in the past decade.

While rates are not expected to rise as sharply in 2025 compared to 2024, they are still continuing to trend upward. With over 20 years of experience in the insurance industry, I can provide additional insight into this issue. Keep reading to learn why car insurance is so expensive in Colorado.

Unique Reasons Why Car Insurance In Colorado Is So High

The cost of  Colorado car insurance can be attributed to the following reasons as noted below.

High Repair & Replacement Costs

Colorado ranks as the second most expensive state for auto repairs, following Connecticut. The rising cost of vehicle repairs and replacements plays a big role in increasing car insurance premiums. Since 2023, the average cost for car repairs has gone up by about 20% in recent years, driving higher insurance costs. Additionally, as more people in Colorado are driving, the frequency of accidents, claims, and payouts is also increasing.

More Uninsured Drivers

In Colorado, a significant number of drivers choose not to carry car insurance, which pushes up insurance rates for everyone. According to the Insurance Information Institute (III), around 17.5% of drivers in Colorado were uninsured in 2022, which is higher than the national average of about 13%. Uninsured drivers contribute to higher premiums since auto insurance companies have to cover the risks of accidents involving these drivers.

Severe Weather

Severe weather conditions are another factor that makes car insurance more expensive in Colorado. The state regularly faces extreme weather events, such as hailstorms, wildfires, floods, and heavy snowstorms, which lead to a surge in car insurance claims. For example, in 2024, a hailstorm in the Denver and Aurora areas caused hailstones as large as baseballs, damaging many vehicles and resulting in increased claims.

Increased Vehicle Theft Rates

Vehicle theft rates are also a major reason for higher car insurance premiums in Colorado. Although theft rates slightly dropped in 2023, Colorado still had the highest rate of motor vehicle theft in the country. These thefts cause insurers to raise their rates to cover the cost of replacing stolen vehicles, making car insurance more expensive for everyone. It’s important to make sure your car is protected from theft.

Rural Areas Having High Wildlife Collision Risk

Drivers in rural areas of Colorado face higher risks of wildlife collisions, which significantly contribute to higher auto insurance premiums. Collisions with wildlife can cause substantial damage to vehicles, and the frequency of these accidents drives up the overall cost of car insurance in these areas.

Factors Causing Your Car Insurance To Be So High

There are several factors that can influence the cost of your car insurance. Here are some of the most common ones that can affect your premium.

Coverage Level: The amount of coverage you choose directly affects your premium. Full coverage, including liability, collision, and comprehensive insurance, will generally cost more than basic coverage. Extra options like roadside assistance or rental coverage can also raise the price. The higher the level of protection, the more expensive the insurance will be.

Age: Younger drivers, especially teens and those in their early twenties, usually pay higher premiums. This is because they are statistically more likely to be involved in accidents. As drivers get older and gain more experience, their rates typically decrease. However, premiums may increase again for older drivers due to the higher risk of accidents.

Driving History: A clean driving record helps keep your insurance premiums low, as insurers see you as a safer driver. Accidents, traffic tickets, or DUIs usually result in higher rates. Insurers also consider how many claims you’ve filed in the past. Safe driving over time can help you maintain lower insurance costs.

Credit History: Insurers often use your credit history to assess risk. People with better credit scores generally pay lower premiums because they are seen as more financially responsible. If your credit score is low, your premium may be higher, as it’s considered a higher risk. Keeping a good credit score is a smart way to lower your insurance costs.

Location: Your location can greatly influence the cost of your car insurance. Living in a busy city with high traffic, crime rates, or weather risks can result in higher premiums. Insurers look at the likelihood of accidents, theft, or damage in your area when setting rates. In rural areas, premiums can be lower, but they may still increase due to risks like wildlife collisions.

Gender: Gender can affect car insurance rates, with men, especially young men, usually paying more. This is because statistics show that men are more likely to get into accidents. However, as drivers get older and more experienced, the rate difference between men and women decreases. Some states limit how much gender can influence premiums.

Credit Score: Your credit score is an important factor for insurers when determining your premium. A higher credit score is often linked to lower premiums because it suggests you’re less likely to file a claim. On the other hand, a low credit score may result in higher rates. It’s important to manage your credit to help keep your insurance costs lower.

Vehicle Type: The make and model of your car can have a big impact on your insurance premium. Expensive cars or those with high repair costs are typically more expensive to insure. Cars that are more likely to be stolen or involved in accidents usually carry higher premiums.