Claire Smith Last Updated On: February 13, 2024

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How to Find the Best Homeowners Insurance in Colorado

Living in Colorful Colorado can be pricey, and tacking on home insurance costs can feel like an avalanche on your wallet. But you have more say than you might think in your home insurance rates and you can easily carve out some savings.

Keep reading because we’ve broken down everything you need to know about home insurance in Colorado, from coverage to costs, savings and more.

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What You Should Know About Home Insurance in Colorado

Colorado should be nicknamed the Sunshine State with an average of 300-sunny days per year. But don’t let the sunshine fool you: Colorado can experience unpredictable weather, and that can impact your home insurance.

Colorado is huge (the 8th largest state by land area), which means it experiences a wide range of weather. The state sees strong winds, heavy rainfalls, snow, tornados, hail, flash floods, and more, depending on where you live in the state.

Your home is vulnerable to these extreme weather patterns, which is why home insurance is so important. Keep reading for more info about what your home insurance does (and doesn’t) include.

What Does Home Insurance in Colorado Include?

A standard home insurance policy will do more than you think. It protects your house, your belongings, and you—your liability. Let’s dig a little deeper into each of the home insurance buckets of coverage:

Dwelling: This covers the structure of your house, such as the walls, roof and foundation. If a covered peril causes damage, your insurance will pay to repair or replace it.
Other Structures: Outbuildings on your property are also covered, like a shed or separate garage.
Personal Property: Of course, your belongings are also covered from certain perils. This includes your furniture, appliances, clothing, electronics, and more. If a covered peril damages them, your policy will pay to replace them (up to covered limits).
Liability: This helps protect you if someone gets injured on your property and if they sue you for damages. Your policy kicks in to pay for their medical costs and provide you with a legal defense if they sue.
Loss of Use: If something happens to your home and it’s not liveable for a certain period of time, your policy will help cover the costs for you to find lodging, food and transportation.

These are the main types of coverage in a Colorado home insurance policy. But there are gaps in this coverage that can still leave you and your home vulnerable. This is why you can purchase added coverage in the form of riders if you choose. We’ll explore those next.

Optional Add-On Coverage in Colorado

Your home is your biggest investment, and it makes sense to want to protect it as much as you can. If a standard home insurance policy seems a little light to you, you can customize it with further coverage to help feel more protected. Some of the riders (or endorsements) available in Colorado include:

Flood Insurance: Colorado experiences heavy rainfalls and flash flooding in some parts of the state, but your standard home insurance policy actually excludes flooding from coverage. You can purchase additional flooding insurance to add to your home insurance policy.
Earthquake Insurance: Quakes are infrequent in Colorado, but they do occur and they can cause damage to your home and property. If you live near an area that has experienced earthquakes in the past, it might be a good idea to add this to your coverage.
Scheduled Personal Property: Your policy limits the coverage on certain items like jewelry, electronics, firearms, collectibles, and more. The coverage might not be enough to replace these items, so you can purchase additional coverage for specific, high-value items.
Guaranteed Replacement Cost: If your home needs to be replaced, the covered replacement cost might not actually be enough any more. Things like inflation, availability of materials, cost of labor and more could mean that you’re stuck paying out of pocket the difference in costs to rebuild. This optional coverage guarantees your home will be replaced as it was before the damage.
Watercraft: If you own a boat or watercraft, this added coverage helps ensure it’s fully protected, whether it’s parked in your driveway or being used out on the water.
Sewer Backup: Although some water damage is covered in your policy, most don’t include damage from the sewer backing up into your home. This added coverage includes water damage from a drain, excess rain, eavestroughs, sewer, septic system, or sump pump.

These are just some of the common riders you can add to your policy to feel more protected. Of course, these riders will increase your premiums, but they can also prevent costly repairs; in fact, the average cost of water damage to your home is $3,312, but that can easily jump to $10,000-$20,000 in repair costs. Having the protection in place before you need it can save you big.

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What Perils Does Home Insurance Cover?

It might surprise you to know that home insurance doesn’t just cover anything that happens to your home. Only certain dangers, also known as perils, are covered. In most home insurance policies, these typically include:

Fire and smoke
Wind and hail
Weight of snow, ice and sleet
Water damage
Lightning
Explosion
Vandalism
Theft
Damage from aircraft or vehicle
Falling objects

The list of coverage is extensive, but not comprehensive. Some of the commonly excluded perils include:

Flooding
Earthquakes
Wear and tear
Neglect
Intentional damage
Rodent or insect damage
Mold
Nuclear hazard

Most policies only name the covered perils, although more generous policies will only name the excluded perils (everything else is automatically covered). Be sure to read your policy to know exactly what is and isn’t covered, so you’re more prepared should something happen.

The Average Home Insurance Cost in Colorado

Colorado is a large state and home insurance costs can vary wildly from county to county. But it helps to know the average cost, so you can better know what to expect.

Here’s the truth: home insurance in Colorado is more expensive than the national average. In Colorado, you can expect to pay $1,616 per year, while the national average is just $1,249. This puts Colorado in the top ten most expensive states for home insurance.

But keep in mind that your home insurance costs could be lower depending on where you live and how new your home is. Find out more info on rate calculations next.

If you’re moving to Colorado as part of your retirement dream, congrats! The Rocky Mountains may be calling, but so are your personal finances. Get our free retirement planning guide here so you can be fully prepared to live out your golden years in the beautiful state of Colorado.

How Your Home Insurance Rates Are Determined

A lot goes into calculating quotes for home insurance. No two people receive the same quotes, and that’s because each insurance provider has their own algorithm to calculate quotes. Some of the factors they consider for your quote include:

Location
Claims history (yours and in your area)
Age of your home
Construction materials of your home
Replacement cost
Any high-risk items (pool, trampoline, old-wood stove, dangerous dog breed)
And more

Based on the amount of coverage you choose, you’ll receive a completely customized quote for home insurance at each provider. This is why it’s critical to shop around for coverage, because you’ll be able to compare quotes and find the best rate.

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How to Find the Cheapest Home Insurance in Colorado

Home insurance can be costly; after all, it’s there to protect your largest financial asset. But that doesn’t mean it needs to break the bank. Affordable home insurance is possible, even in the Centennial State. Here are some of the top tips to save on home insurance in Colorado:

Ask for Discounts: Most insurance providers offer discounts, and these can range from signing up for paperless billing to installing safety devices in your home. Ask for any and all discounts available to ensure you’re slashing your home insurance costs as much as you can.
Compare Multiple Quotes: Accepting the first quote you receive means you’re leaving money on the table. Because insurers calculate quotes differently, you should try and get at least three home insurance quotes to make sure you’re getting the best deal.
Increase Your Deductible: This one can be tricky, but increasing your deductible will lower your premiums. But this means you need to be prepared to pay a higher deductible should anything happen to your home, before your claim is covered.
Maintain Your Home: General maintenance can save you money down the line. After all, claims can be denied because you didn’t perform general upkeep. Also, general upkeep can help prevent damage from occurring in the first place, keeping your claims and premiums down.
Bundle Policies: If it makes sense to do so, combining home and auto or other insurance policies with one provider can save you up to 30% on your insurance.

You might not have a choice about getting home insurance (especially if your mortgage requires you to), but you do have control over how much you pay for it. These tips to find the cheapest home insurance in Colorado can help ensure your premiums are manageable and fit within your budget.