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WELD COUNTY — Car owners and drivers in Weld County pay some of the lowest annual auto insurance premiums in the state, according to a recent study by a national consumer finance website.
According to the study released in June by ValuePenguin.com comparing auto insurance costs in 70-plus Colorado cities (covering about 66 percent of the overall state population), drivers in the cheapest cities in Colorado pay about $1,039 a year or $87 a month for car insurance. Those lowest rates equate to about a 12 percent savings compared to the state average for those residents living in the cheapest coverage areas, which are primarily located in north central communities in Boulder, Larimer and Weld counties.
Of the top five cheapest cities in terms of annual auto insurance costs — the top five make up the aforementioned $1,039 average figure — the top three are located in Larimer County, including Fort Collins (which has the lowest average cost at $1,002), Loveland ($1,026) and LaPorte ($1,046). Weld County’s Town of Windsor is the fourth-cheapest in terms of average cost, and joins other Weld County communities Johnston (sixth, $1,070 per year) and Greeley (eighth, $1,075) as Weld County municipalities among the top-10 cheapest annual car insurance rates in the state.
Boulder County municipalities Longmont (fifth, $1,064), Niwot (seventh, ($1,071) and Lafayette (10th, $1,087), along with Grand Junction in Mesa County (ninth, $1,077) round out the top-10 cheapest places in Colorado to insure a vehicle.
Two other Weld County municipalities were included in the study, and both fall somewhere in the middle, though their rankings suggest a greater divide. The Town of Frederick was ranked 20th overall at $1,132, while Fort Lupton came in squarely in the middle of the rankings — 40th overall — at $1,191, or about $60 more a year than their Weld County neighbors to the west.
Brighton closely follows Fort Lupton in 42nd place at $1,199 a year, whereas Commerce City is on the other end of the spectrum and in the bottom five overall, at 72nd place and an average of $1,340 paid per year for auto insurance.
Predictably, the City and County of Denver, with the largest population of any city or county in the state, topped the list at nearly $150 more than the next closest municipality. The $1,510 Denver’s drivers pay annually in auto insurance is $141 more than the next closest city, Pueblo ($1,369 per year), and $471 more than the average of the top five cheapest cities.
A slight majority of cities — 53 percent — had average rates lower than the state average.
According to studies by both ValuePenguin.com and consumer insurance website Insure.com, Colorado drivers overall pay an average of $1,558 a year in auto insurance premiums, and the Centennial State is ranked as the 19th most expensive state in the U.S. in terms of annual auto insurance costs. Michigan was ranked the most expensive of all the states (and Washington D.C.) at $2,551 a year, while Ohio is the cheapest place to buy car insurance at $926 a year.
The two studies done by ValuePenguin.com — the Colorado-specific study and the state-by-state comparison — provide different statistics due to the use of varying information, said Madison Reed of ValuePenguin.com. He said the state-specific study includes more cities but is based on less coverage — tailored to minimum Colorado requirements — while the state-by-state comparison is based on twice the coverage and factors in fewer individual cities.
How the study was conducted
The study by ValuePenguin.com, which is not tied to any insurance provider, was based on auto insurance rates for a 30-year-old, male driving in 76 cities in Colorado. The fictional driver was a homeowner and drove a Toyota Camry base sedan about 12,000 miles per year, mostly part of a daily work commute, and had a clean driving record and good credit history.
The rates are based on roughly twice the insurance coverage mandated by the state of Colorado but about half of full coverage packages.
According to Ting Pen, of ValuePenguin.com, there is no one determining factor when it comes to auto insurance rates. Rather, she said, rates are based on an accumulation of data, which could explain why a city like Bailey — which is ranked 74th overall and pays an average of $1,346 a year despite having only about 8,000 residents — has annual rates comparable to Denver, Pueblo, Aurora (73rd, $1,345) and Commerce City.
“There are a number of factors that influence how geographies are priced, including population density of cities and the frequency and severity of claims processed in each state,” Pen said. “More densely populated places, such as larger cities, tend to have higher costs. A city or town that has many claims or expensive claims in an insurer’s experience will also tend to be priced more expensively.”
According to Pen, other factors include:
• Distance of daily commutes. “All other things equal, the longer the time drivers spend behind the wheel, the more exposure to risk there is.”
• Insurance providers. “Consumers can find lower costs and better rates through comparison shopping and being aware of discounts,” Pen said. “Not all insurers will rate the same driver with the same circumstances the same way, since companies weigh risk of various factors differently.”
• Demographics. “Demographic data plays a part to the extent that insurers have demonstrated those factors are statistically significant in predicting risk,” Pen said. “These are age, gender, marital status, risk level of the neighborhood where the driver lives (and) accident and traffic violation history.” Pen said it is illegal in Colorado and most other states for insurers to consider factors like income, ethnicity, disability, religion or nationality.