The Factors Behind the 2023 Increase
- Elevated Market Value of Used Cars: A key factor in the 2023 rate hike was the high market value of used cars. Insurance companies calculate total loss payouts based on the current market value of vehicles. In recent years, there has been a substantial rise in the value of used cars, culminating in higher payouts in 2023. Although there has been a slight decrease recently, the overall increase means that insurers are still paying more for totaled vehicles.
2. Colorado’s High Auto Theft Rates: The state recorded the highest auto theft rate in the U.S. in 2022, as reported by the National Insurance Crime Bureau. With 731 thefts per 100,000 residents, this marked a 10.6% increase from the previous year.
3. Surge in Healthcare Costs: Another critical factor is the rise in healthcare costs. The expenses associated with treating drivers injured in accidents are a major component of insurers’ claim payouts. With a national increase of 6.2% in medical care rates, insurers are contending with higher healthcare payouts, which leads to higher premiums for drivers.