The Most Frequently Asked Auto Insurance Questions and Answers

These are some of the most popular questions we get on auto insurance. If you have a more specific question, don't hesitate to contact us and ask an insurance agent - we'd love to help you!

Q: What Does Colorado Auto Insurance Cover?

Mandatory auto insurance in Colorado, required by law, must cover property damage, sustained by you or the other party, and bodily injury, which include some expenses associated with bodily harm sustained by either party. The minimum coverage you must have is $15,000 for damage to another person’s property and $50,000 of injury coverage per incident ($25,000 per each party involved). Liability coverage also covers your legal defense if a lawsuit is filed against you as a result of an accident.

Q: Why Is Colorado Auto Insurance so Expensive?

According to the Denver Post, Colorado is currently #3 in the country for rising auto insurance prices, with the average rate in the state currently at $1,435 a year - 0.6% above the national average. There are a host of reasons to explain this, including lower gas prices (which means more drivers on the road), bad weather (which leads to more accidents), and higher rates of distracted driving. There are also concerns that the recent legalization of marijuana could lead to more road accidents caused by intoxication, as well.

Q: Is Auto Insurance Required in Colorado?

YES!

All Colorado drivers must meet the minimum coverage levels ($15k/$25k/$50k for property damage, single injury cover, and both party injury cover, respectively). Driving without insurance can lead to a fine and/or jail time as well as the suspension or outright revocation of a driver’s license.

Q: Can my auto insurance company drop me?

An auto insurance policy is a contract that can be voided or cancelled either, by you or the insurance company. If you do not meet your premium payments, give fraudulent information during your insurance application, or if your license is suspended or revoked, your auto insurance company can drop you. There are other reasons your insurance company can drop you, such as: several at-fault accidents, traffic violations, improper use of your insurance policy, and if the company shuts down.  However, if they drop or decide not to renew a policy without sufficient notice and a valid reason, they may be violating the law.

Q: Do Auto Insurance Companies Check Your Credit?

Yes, auto insurance providers perform a credit check to find out your score and look at your credit reports. This is, in part, so they can ensure that you have a history of being able to meet your financial obligations. A lower credit score may see you paying higher premiums, or it may even cause an insurer to decide not to accept your application.

Q: Does Auto Insurance Cover Rental Cars?

In most cases, auto insurance providers do offer the same coverage on any rental vehicles as your personal vehicle. However, it's not mandatory, so always ask your auto insurance agent about this or check the specifics of your auto insurance policy.

Q: Do Auto Insurance Companies Check Your Driving History?

Pretty obvious answer - Whether you are looking for a new policy, renewing your current policy or adding a new clause, driver, or vehicle to your policy, the insurance provider is likely to check your driving record. However, rarely does your driving history affect your ability to get in insurance, it is mostly to determine the level of risk associated with insuring you. If you have tickets, accidents, or points on your license, you may end up having to pay higher premiums than someone who has a spotless driving history.

Q: Can I Get Colorado Car Insurance with a Suspended License?

The majority of insurance companies will NOT provide or renew auto insurance for drivers who have had their license suspended or revoked. You may be able to apply at your local DMV or with a willing insurance agent to get a hardship license or file an SR 22 form (which guarantees insurance coverage.) However, this may not always be a likely event.

Q: How Does Colorado Car Insurance Work?

Auto insurance in Colorado is designed to cover the costs of damage, injuries and other expenses relating to collisions and accidents on the road. It’s a means of mitigating your financial risk following a road incident, whether it’s your fault or not. You pay monthly premiums for the coverage, and the insurance company covers costs up to the amount you are insured for when you need to claim.

Q: What's the best way to get car insurance in Colorado?

What a silly question! The simplest way is to just click "Get a Quote" at the top of our website. We will independently shop insurance for you and provide you with the best policy at the best price. 

Q: Is auto insurance tax deductible?

Those who are self-employed and using a personal vehicle for business purposes can make a tax deduction on car insurance. This deduction only covers mileage driven for business purposes, however. Miles driven for personal reasons are not deductible.

Q: Can Auto Insurance Companies Deny Claims

Yes, auto insurance companies can deny you when you attempt to make a claim on a road incident. Here's several reasons this might happen, including: if an accident was avoidable or caused by your actions, if there was no treatment or evidence of complaint about an injury at the time it happened, or if they can argue a pre-existing condition caused pain experienced after an accident rather than the accident itself. Some denials are in bad faith, however, and if none of these justifications apply to your claim denial, you may have legal recourse to seek compensation from your insurance provider.

Q: Do Auto Insurance Quotes Affect Credit?

When you make an application for a loan or a line of credit, the provider will check your credit in what is known as a “hard pull” that can affect your credit rating if your application is not successful. Auto insurance does not extend your credit, so when insurance companies check your credit, it is known as a “soft pull” and will not affect your credit rating. Still, if you are rejected on the basis of your credit, you may need to work to improve it before applying again.

Q: Do Auto Insurance Companies Share Information?

Auto insurance companies share information not by contacting one directly but rather by sharing the information with a national loss-underwriting database. Virtually all insurance companies subscribe to these services, which provides reports on your driving and insurance history. Based on the insurance company’s relationship with you, they will also update these records, which may then go on to be shared with other insurance providers you apply to in future.

Q: Does auto insurance cover theft?

Auto insurance can cover theft, but it is not typically included in what is considered the mandatory minimum insurance in Colorado. Instead, policies that cover theft, alongside other issues not regularly covered by mandatory insurance, are included as part of comprehensive auto insurance. In order to be compensated by your insurance provider (providing you have comprehensive insurance), you must file a police report, wait for them to attempt to recover the car and, if they are unsuccessful, then you can file your claim with the documentation you need to prove it was stolen (which you can obtain from the police).

Q: What is a waiver of subrogation? 

If you are involved in an auto accident as a result of another driver's actions, your insurance company pays to have your car fixed, and recovers the amount they had to pay from the at-fault driver’s insurance. This is called subrogation.

 

A waiver of subrogation, however, prohibits an insurance carrier from recovering the money paid on a claim from a negligent third party. 

Have More Questions About Insurance? Don't Hesitate to ask us!

The world of car insurance is incredibly complex and contradictory. It can be extremely difficult to navigate through the jargon and technical terms to get to the simple truths that can help you make an informed choice.

This is where we come in!

We’re rated as one of the top 3 insurance agents in Denver. Our expertise and years of experience can help make the complicated simple and explain any other insurance you have in plain-speaking, jargon-free terms. While we’ve worked to be as transparent as possible in the FAQ above please don’t hesitate to get in touch with us today if you have any further question.

Where to Next? You can continue onto the next section of our Denver Insurance Guide or check out the most interesting insurance blog within the Milky Way.

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