UPDATED: Mar 18, 2020
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Colorado home insurance rates come in a bit above the national average; about 15% higher, that is. Of course, rates vary a lot depending on where you live and many factors related to the home itself. That means that shopping around is the best way to get a good rate for your specific home. These top picks for home insurance in Colorado are a great starting point.
Basics of Colorado Home Insurance
Home insurance is not required by law the way car insurance is, but it is still required for most homeowners. A home insurance policy is mandated by lenders as part of the mortgage contract and must be kept in place in order to protect the lender’s interest in the property.
When a homeowner fails to keep the required insurance in place, the lender has the right to provide their own coverage and charge the homeowner for it as part of the mortgage payment. This is known as force-placed insurance and it is not a good thing for the homeowner. Not only will you have to pay for an expensive insurance policy, but you will also be paying for one that only protects the lender and not your interests. That makes keeping a good insurance policy in force at all times a smart choice, and not just to meet lender requirements.
Standard homeowner’s package policies cover you in multiple ways; they cover the dwelling itself and other structures on the property, all of your personal property inside the home and out, personal liability, and loss of use in the event of a covered claim.
In addition to these basics, there is a long list of options and endorsements that can be added on to the base policy in order to customize it and provide the coverage you need. This includes choices like scheduled riders for high-value items like jewelry, identity theft coverage, water and sewer backup, and more. What is included in a base policy depends on the company; some may include extras as standard features to add value.
Specifics of Home Insurance of Colorado
Colorado does not have any specifics of home insurance that differentiate it from other states, but some areas of the state may demand the addition of additional coverage.
Areas that are prone to flooding may carry a requirement on the home for flood insurance, which is a separate policy. A standard homeowner’s insurance policy does not cover flooding, but it can be purchased from most insurance companies to provide protection against this common threat.
If you live in the mountains or a place that has heavy snowfall, it is a good idea to discuss with insurance companies what coverage they provide for risks such as avalanches. Not all policies cover all possible risks.
Our goal when choosing insurance companies to recommend is to find those companies that offer the best value. Value is made up of a few factors, and price is just one of them.
Price is, of course, a top concern for most homeowners, and no one wants to overpay for their insurance. The least expensive policy, however, is not always the best choice. A low rate may mean the policy cuts coverage or may be for a very basic policy that does not meet your needs. It can sneak up quickly as you add on the endorsements and extra coverage you need to avoid being underinsured.
In addition to looking for companies with low rates, therefore, we also looked for companies that offer a solid base policy that includes good coverage without nickel-and-diming all of the extras. We looked for things like extended replacement cost as well as package endorsements that provide a lot of extra coverage for one premium.
A big part of value, is also the reputation of the company that backs the policy. We looked for companies that have a solid financial standing – meaning they can pay claims – and also have an excellent reputation for customer service. Of particular importance is the company’s performance in the claims handling department, which is the area where an insurer shows its true colors. All of our picks have a good reputation for fair, fast claims.
We chose to list only companies that are open to the general public, which means high-rated USAA does not appear on our list. Only military members and their families are eligible for coverage, so while they are a good pick we left them off in order to provide choices that are useful to the largest portion of Colorado’s homeowners.
Our Top Picks
These insurance companies all offer Colorado homeowners a great value – with solid policies, a good reputation, and competitive rates.
Farmers comes in with some of the better rates in the state and backs it with a solid financial footing and a claims handling reputation that is improving year over year. For 2019 they climbed into the top ten in J.D. Power’s claims satisfaction survey.
They also have a simple system for selecting a policy that meets your needs without a lot of nickel-and-diming; three levels of package policy are offered, including one that provides extended replacement cost coverage standard. And they still have plenty of custom endorsements and a good list of discounts.
While it does require an annual membership fee to qualify for insurance, it is well worth it for the extra benefits, and AAA still has low rates on home insurance for Colorado. They also have a nice list of discounts including an auto insurance/home insurance bundle.
AAA has a good reputation for taking care of customers, and also offers a solid package policy. Customers can add on not just extended replacement cost, but guaranteed replacement cost coverage, which brings peace of mind that the home is properly insured no matter what happens.
American Family does not always perform well in rate comparisons, but in Colorado, they are among the most affordable options. With a lot of different coverage available, they are also a one-stop shop and have a solid list of available discounts. They are another good pick for bundling your insurance.
American Family has a good home insurance package policy at the base level with a lot of extras available should you choose to add them. They also have some helpful tools, like their digital home inventory called Dream Vault, which allows faster claims processing for personal property loss.
Shopping for Home Insurance in Colorado
The key to finding the best home insurance in Colorado is to know what coverage you need and compare as many quotes as you can for that coverage.
Dwelling coverage is the biggest part of a home policy, and you will quickly notice when shopping around that each insurance company calculates it a little differently. In order to know what makes sense, check with your mortgage company to see what they require on the policy, and then do some calculations of your own. Several online calculators that are not associated with an insurance company are available to help. Make sure you have the most accurate information about your home when calculating.
Once you have a number, request quotes that provide coverage at that level; most insurance companies will adjust their calculations on your request. Bear in mind that extended replacement cost means you actually have more than the number shown; this is usually seen as a percentage, such as 125%.
In addition to choosing your replacement cost, make sure all of your quotes have the same deductible and the same endorsements and add-on coverage. That way you can compare quotes on an apples-to-apples basis.
There are a lot of options for insurance in Colorado, and some of them may be smaller companies that, while they did not make our list, are still good bets. A trusted local insurance agent can help you to obtain quotes from smaller companies and discuss the pros and cons of each. The more quotes you have, the more confident you can be in your decision.
The Bottom Line
Colorado insurance rates can vary a lot depending on where you live, so whether you are in Denver or insuring a ski chalet in Vail, take the time to shop around. There are a lot of great picks for home insurance, including some of the biggest names in the country, which should make it easy to find the one that’s right for you.
For a list of companies that we recommend, visit our Best Insurance Companies page.