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With car theft down, auto insurance rates should drop too

Car theft has decreased significantly in Colorado, the Denver Post reports - but auto insurance rates have yet to reflect the difference.

The cost of comprehensive insurance is determined partly by the risk of loss, according to the Insurance Information Institute. Insurance companies' vast data repositories include theft statistics for every model of car; models with higher theft rates will cost more to insure.

And, says Carole Walker from the Rocky Mountain Insurance Information Association, theft loss comprises about 25 percent of the calculation for comprehensive coverage.

Following Colorado's declining car theft rates - vehicle theft fell 22 percent in 2008 - drivers should expect to see lower insurance costs, too. Auto theft in Denver dropped 30 percent in 2008, says the Post, and Pueblo's declined 67 percent. But Walker cautions that it would take a few years for reduced car theft to be reflected in the price of insurance.

Nationwide, car theft has been decreasing since the early 1990's. During that time, though, states have mandated higher levels of auto insurance coverage, possibly negating any savings derived from lower risk of loss.

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Posted: November 02, 2009