State Farm® To Cut Colorado Auto Insurance Rates 7.2 Percent

Overall rate reductions total more than 40 percent since the legislature tossed out the old “no-fault” auto insurance system four years ago. Annual premium savings for Colorado customers exceed $319 million.

State Farm Mutual Automobile Insurance Company, the state‘s largest auto insurer, is lowering its overall rate level in Colorado an average of 7.2 percent effective July 16. This represents an annual savings of $38.8 million to the company’s Colorado customers.

With this reduction, State Farm Mutual has cut rates over 40 percent since July 1, 2003, when the state switched from a “no-fault” to “tort” auto insurance system. That amounts to annual premium savings for State Farm Mutual customers of more than $319 million.

“State Farm has very aggressively reduced rates in the four years since the change in Colorado’s auto insurance system,” said Ken Cook, vice president of operations for State Farm. “The old system had clear cases of abuse and costs were out of control. Due in a large part to the change and Colorado’s very competitive auto insurance marketplace, rates are now much lower and customers are paying less for their auto insurance.”

According to Cook, this is the ninth consecutive rate decrease for State Farm since July 2003.

In addition, State Farm recently announced a $19.1 million dividend in Colorado from which State Farm Mutual auto policyholders in the state will receive 7.0 percent of their semi-annual premium. Dividend payments began in early April and will continue throughout the year.

“Legislators should be thanked for moving away from the state’s costly no-fault system to what we now have in place, which is similar to what most other states have. The past four years have shown that the system is working the way it was intended, and rates are down,” emphasized Cook.

“Consumers need to be on the alert, however, since there are a lot of special interests that want to see a return to the high costs of the old system,” Cook added. “These special interests were very active during the past legislative session, and we expect much more of the same when the state legislature convenes again next January.”

For the current rate change, premiums for the medical payments and comprehensive coverages are decreasing the most. The comprehensive coverage pays for losses from such perils as theft, storm damage, fire, vandalism and glass breakage. Also, most policyholders will see a decrease in the cost of their liability and collision coverage premiums.

Overall premium changes for individual motorists will vary depending on factors such as the coverages they carry, the discounts for which they qualify, where they live, the kind of car insured, who drives it and how much it is driven.

About one in every five cars insured in Colorado is insured by State Farm.