How Do I Buy Car Insurance?

How does one actually tackle buying car insurance without striking out?

Surfing through the deep, dark and confusing world wide web of auto insurance policies can be overwhelming. You could spend a whole day going to different websites, googling different questions, building a spreadsheet and you still wouldn’t have all the answers! Well, lucky for you, we went through the grueling task to build this sheet for you to understand auto insurance policies in Colorado. 

Basic definition of auto insurance: to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle

Understanding your rate and contributing factors

• State requirements: In Colorado, the minimum amount of Colorado auto insurance coverage is $25,000 for bodily injury with a max of $50,000  per incident.

• Driving record: You can save up to 40% for having a clean record, no violations, accidents or convictions over the past 3-7 years

• Urban vs. rural areas: due to busy streets, higher crime rates and highly crowded areas, urban areas tend to have higher insurance rates

• Gender and Age: Men and people under 25 are more likely to get into an accident

• Cheapest Vehicles to insure: Subaru Forester, Dodge Grand Caravan, Honda Odyssey, Ford Escape, Toyota Sienna

• Mileage and Use: The more you use your car, the more likely you are to get into an accident

  *High-risk violations can dramatically increase your insurance which will stay in place for approximately 3 years. Consider shopping around for a new insurance after this three year period.*

Discounts to consider

1. Driver Safety:

   1. Defensive Driver/Driver Education Courses (10-15%): find classes today at National Safety Council

   2. Low Mileage (up to 20%): those who drive less than 7,500 

   3. Safe driver (10%): low speed, wears seatbelts, non-aggressive

2. Driver Status:

   1. Good Student (5-25%): Grades at a B-level on average

   2. Student Away From Home (5-25%): if your child is 100 miles away from home

   3. Mature, 55 and up (5-10%)

   4. Military or Federal Employee (8-15%)

3. Policy: 

   1. Multiple Vehicles (up to 25%): more than one car in the same household

   2. Auto/Home Package (5-25%): ask about bundling options

   3. Auto Pay (5-10%): not very common, but worth asking

   4. Paid-in-full (5-10%): when you to pay your premium up front 

   5. Loyalty (varies): includes accident forgiveness

4. Vehicle:

   1. Safety and anti-theft devices (5-15%)

   2. Anti-Lock Brakes (5-10%)

   3. Passive Restraint (25-30%): airbags and seatbelts

   4. New Car (10%): depends on year, model, and number of titleships to the car

5. What is Tort vs. No-Fault?

   1. Colorado is a Tort State or a fault based system. Therefore, one driving will be declared at fault for the accident and will be responsible to pay expenses, most commonly, medical costs with liability coverage.

   2. Generally includes: bodily injury liability insurance, property damage liability insurance and uninsured motorists coverage. 

6. No-fault state 

   1. Each driver is responsible to cover the costs of their own injuries, regardless of who is at fault. 

Required, Recommended and Optional Coverage

Required, in most states: 

• Liability coverage which covers injury and property damage.

• Highly recommended:

  • Collison: physical damage to your car as a result of your auto colliding with an object such as a tree or another car

  • Comprehension: damage to your auto from almost all other causes, including fire, severe weather, vandalism, floods and theft

• Optional:

  • Personal Injury Protection (PIP): for those who live in a “no-fault” state. 

  • Medical Payments (MedPay): similar to PIP but offers a broader scope.

  • Uninsured/Underinsured Motorists: in the case of an accident with someone who does not have auto insurance or does not have enough

Of course there’s a lot of info here and it can be overwhelming.  No worries, we’ll help you through it.