If you are a driver in Colorado or anywhere for that matter, you know how complicated and confusing it can be to file a car accident claim, switch car insurance companies or simply add a person on to your policy. To help make things easier when dealing with your auto insurance company, we have listed some helpful tips for Colorado car insurance customers below. Understanding these items can not only save you a lot of time and money on your Colorado auto insurance, but it will also help you be better prepared in the event of a car accident.
1. How your Colorado car insurance company determines your car’s value after it has been declared a “total loss”
When totaling your car, your insurance company’s goal is to help you find a new car within the same market. To do this, car insurance companies use three different methods for determining the value of the car declared a total loss, such as:
If the car insurance company is unable to find a car from within your area, they may have to find a replacement car outside your zip code, which can dramatically affect your car’s true value. For instance, if you reside in a big city within Colorado, such as Denver, Boulder, or Colorado Springs, then the cost of replacing your car will likely be more expensive than if you lived in a suburb or more rural part of Colorado.
2. Making a car insurance claim could increase your rates
Typically, insurance companies raise your car insurance rate by 40 percent in the event of an accident. However, some insurance companies will only increase your personal rate as opposed to your entire rate, but that is at the discretion of the insurance company.
If you are a good driver that does not have any driving violations, then you will want to consider going with a car insurance company that offers an “accident forgiveness” or “forgive the first accident” policy. This will help keep your insurance from fluctuating in the event that you file a car insurance claim.
3. Your credit history may determine your insurance premium
In the State of Colorado, the use of your credit history to determine your insurance premium is permissible. It may be used to determine your payment options, such as monthly, quarterly, or having to pay the entire premium at once. Your history may also be used by insurance companies to create an “insurance risk score”. This score is used as a factor in determining your auto insurance rates.
Pay your bills on time and try to improve your score if it is less than ideal. In doing so, you are helping to improve your credit history in the long run and you may save money on your car insurance premium.
4. When switching car insurance companies, you must cancel your insurance policy first
Though it is possible to cancel your coverage at anytime, it is important to note that many insurance companies require a written statement, including the date of termination, in order to officially close your car insurance policy. If you do not do this, and you receive and ignore the next bill, your policy will be canceled automatically by the insurance agency for delinquency of payment. The downside to this automatic cancellation is that it will show up on your credit record, which could potentially impact your credit score!
The safest thing to do when switching car insurance companies is to call your company and let them know that you are canceling your policy. The company will send you a cancellation request that needs to be filled out and sent back in.
5. Adding a teen to your car insurance policy
Most insurance companies do not require you to add your teen to your car insurance policy when they are a certain age, only when they receive their license. On the other hand, if you are in a high-risk category, you may be required to add them when they receive their driver’s permit. If you forget to add your licensed teen, and they are involved in a car accident, they will be covered; however, your insurance company may charge you back premiums from the date your teen received their license.
For your Colorado teen to begin the process of receiving their license, they must complete the following steps:
- Obtain a permit packet from the Colorado DMV
- Pass the vision and written knowledge tests
- Enroll in an approved Driver’s Education program
- Obtain an Education Permit
- Receive an Awareness Permit
- Apply for a Minor Instruction Permit
- Complete 50 hours of supervised behind-the-wheel driving
This process is for first time drivers who are at least 15 years old. To ensure that the teen driver receives ample time to practice and to offset the number of accidents that involve teen drivers each year, Colorado has different privileges for each provisional license:
Education Permit
A parent or guardian must sign for the Colorado teen’s Education Permit. The teen must then take and pass a vision screening, written exam and a road sign test, and present an affidavit of enrollment in a driver’s education course before they can officially receive their Education Permit. Under this permit, teens can only drive with the course instructor or the parent(s) or guardian(s) that signed the liability affidavit.
Awareness Permit
Similar to the Education Permit, the Awareness Permit is designed for teenagers ages 15 ½ to 16 who have attended a four-hour state-approved Driver Awareness Course.
Minor Instruction Permit
Once the teen has completed the requirements needed for the Education or Awareness Permit they are able to move on to the Minor Instruction Permit Phase. In order to qualify for the Minor Instruction Permit, Colorado teens must be at least 16 years old and have completed a state-approved driver’s education course.
Under the Minor Instruction Permit Phase, teen drivers are required to complete 50 hours of practice driving with a parent/guardian or a driving instructor, with 10 of the hours at night. When driving with a Minor Instruction Permit, teens are not allowed to have passengers under the age of 21 in the car until they have driven with the permit for six months. Teens are also restricted to only one passenger in the car for a year. The exception to this rule is if the teen has a parent/guardian in the car with them or a passenger who is 21 or older and has had a valid license for at least one year.
Colorado teens are also not permitted to drive between the hours of midnight and 5:00 a.m., unless they have had their license for at least one year. However, teens can drive during this time if a parent/guardian is driving with them, if it is for a medical emergency, if they are driving to and from a school activity or for work purposes.
Full Licensing Phase
Once the teen has completed the requirements needed and is 18 years old, their Colorado Minor Instruction Permit will turn into a Full Driver’s License and the restrictions will no longer apply.
To learn more about Colorado’s teen driver laws and regulations, please visit the Colorado DMV.
6. Paying in installments may increase your car insurance
“Fractional premium” fees are usually charged when you divide your car insurance annual premium into installments. Six month, quarterly or monthly are the typical breakdowns for most insurance companies. Generally, the more you break down your installments, the higher the administrative/fractional premium fees are. Always ask when applying for a new car insurance policy, and see exactly what the fees are for each payment you break down. Make sure to also ask your insurance provider if they offer an alternative way to make payments, such as Automatic Clearing House (ACH) processing, which withdrawals the funds right from your checking account. This may help eliminate processing fees while helping you stick to your budget.
7. How much does your car model affect your premium
The auto insurance company premium rating system for cars is on a scale from 3 to 27. The ratings are established by the Insurance Services Office (ISO), and the higher the number of your model, the higher your premium will likely be. These numbers are only available to auto insurance companies – so, you’re unable to try and find out your car’s number before you purchase your car. But you can contact your car insurance company for a quote to gain an idea of how much it will cost to cover your new wheels.
8. Paying for someone else’s bad driving
If you loan your car to someone and they end up crashing it, you will have to file a claim with your car insurance company. As a result, you will have to pay your deductible (or any that apply) and your car insurance rate could potentially increase. If your car is taken without permission, you are typically not held liable. If the driver is uninsured and causes damages exceeding your policy limit, the injured party may come after you for medical or property-damage expenses and not your friend.
Even though most states typically have similar laws in place for car insurance, they do not typically have similar car insurance rates. That’s because Colorado car insurance rates are influenced by Colorado’s geographic location and its state laws. With that being said, it is always a good idea to shop around and compare the rates of various auto insurance companies. To assist you in the process Insurance.com offers an auto insurance comparison application. Here, you will be able to evaluate multiple rates from best-in-class insurance providers – helping you find the cheapest auto insurance coverage for your budget.