The average cost of an auto insurance policy in Colorado jumped nearly 61 percent from 1989 to 2005, according to a national study released Thursday.
That’s not bad news when compared with several other states whose rates more than doubled in the same period, according to the Consumer Federation of America.
Coloradans paid an average of $827.47 for auto insurance in 2005, compared with the $515.31 average premium they paid in 1989, the study found.
According to one industry expert, Colorado’s numbers might have been much higher had legislators not scrapped no-fault insurance laws in 2003 for a tort system, where damages are collected from the guilty party.
“The focus of lawmakers was to reduce premiums and hopefully more people would be insured,” said Barbara Fidler, executive vice president of the Professional Independent Insurance Agents of Colorado.
The switch removed mandated insurance such as medical coverage, presumably to ensure affordability for all drivers. What’s happened, though, is consumers are purchasing only what’s required.
Proposed legislation requiring Colorado drivers to carry a $25,000 no-fault-style medical payment policy was killed this week.
The CFA study found that states where insurance rates require regulatory approval are more competitive. As a result, consumers find more choices at lower prices, the study found.
“It is very clear that consumers fare best under a system of prior approval of insurance rates,” said J. Robert Hunter, the CFA’s director of insurance.
Colorado requires insurers to file rate plans, but a bill introduced by Rep. Morgan Carroll, D-Aurora, would give the state insurance commissioner authority to reject rate increases for auto and health policies.
Among all states, Colorado ranked 21st for highest average premiums. Worst was New Jersey, where consumers on average paid $1,183 for a basic policy in 2005, the most recent year for which numbers were available.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
