Colorado has the fifth highest auto insurance rates in the country and some state lawmakers are hoping to reduce them by reducing certain types of crashes. They’ve introduced a bill that would create a “Crash Prevention Enterprise” within the Department of Transportation.
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 It would be funded by a $3 per vehicle per year fee tacked onto all auto insurance policies in Colorado.
The fee is expected to generate about $20 million a year. 30% of the money will go to projects aimed at reducing wildlife crashes like underpasses and overpasses. The rest would go to projects aimed at reducing crashes involving cyclists and pedestrians like bike lanes and well-lit walkways.
State Sen. Dylan Roberts says the bill will save lives and money by reducing accidents and, in turn, insurance premiums. He points to Highway 9 between Silverthorne and Kremmling as proof. Once considered one of the most dangerous roads in the state for wildlife collisions, the highway has seen a decrease in crashes of more than 90% thanks to recently built wildlife crossings.
“So that is thousands of people who have now not had their cars totaled, or died, or gotten severely injured because we put in that infrastructure,” Roberts said.
Carol Walker with the Rocky Mountain Insurance Information Association says the bill may increase traffic safety, but it won’t lower premiums.
She notes Colorado is 42nd in the country for wildlife-car collisions.
She says crashes with wildlife, pedestrians and cyclists have a negligible impact on auto insurance, which is driven largely by hail and car-on-car accidents.
“It may sound like a low fee, but you start adding up all of these fees and this path that we’re on,” Walker said. “I think it’s something that insurance policy holders need to be aware of and concerned about.”
The $3 fee would be on top of another $1 fee policy holders already pay for a different state enterprise. Walker worries insurers are becoming pseudo tax collectors. This year, lawmakers have proposed three new enterprises funded with fees on insurance policies. The other two impact homeowners’ insurance. If all three pass, Colorado will have five enterprises funded with insurance fees.
Roberts says policy holders will save more than $3.
He’s convinced the bill will lower traffic risks and insurance rates.
“While I do think that a bill like this will overall reduce insurance premiums because it will mean less claims coming in, we’re not running this bill just to reduce insurance premiums. We’re doing it to protect people and save lives,” Roberts said.
The bill passed the House. It still needs Senate approval.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.