The average cost of Colorado home insurance is $3,869 per year, according to the latest data available from the Consumer Federation of America. That's 17% higher than the national average of $3,303, which makes Colorado the 10th-most expensive state for home insurance, in part due to an increased risk of hailstorms and wildfires.

The cost of your premium will depend on several factors, including your ZIP code, the home's replacement cost, and the type and amount of coverage you need.

Colorado homeowners aren’t required by law to carry home insurance. However, if you financed the purchase of your home, your lender will likely require you to carry coverage until the balance of the mortgage is paid. 

Despite no state mandates requiring home insurance, it’s usually a good idea to purchase coverage. Without a policy, you’ll likely be financially responsible for repairing or rebuilding your home after a range of events, like fires, storms, or roof damage caused by the weight of snow or ice. 

Colorado home insurance premiums are based on factors such as:

• Your location. The cost of home insurance in Colorado depends on your city and ZIP code. Rates tend to be higher in urban areas and lower in rural parts of the state.
• Your home’s replacement cost value. You should carry enough insurance to cover the cost to rebuild your home after a covered event. The higher your replacement cost value, the more you’ll pay for coverage. 
• Your home’s safety features. Home insurance premiums tend to be cheaper for homes that have safety features, like fire alarms and security systems.
• Prior claims history. Colorado homeowners who have filed home insurance claims in the past often pay higher rates for coverage.  You may also pay more for coverage if your property has a recent history of frequent claims, even if you weren’t living there when they occurred. 
• Your chosen coverages and limits. Choosing higher coverage limits for policies, such as dwelling insurance and personal property insurance, will result in a higher premium rate. Likewise, adding policy endorsements, like water backup coverage, will lead to a higher premium.
• Your deductibles. Policies with higher deductibles are typically less expensive, though you’ll pay more out of pocket after a claim. Lower deductibles reduce out-of-pocket costs, but you’ll likely have a higher premium. 

Sometimes referred to as wildfire insurance, Colorado homeowners should check to ensure their home insurance policies include coverage for damage caused by wildfires, given how frequently they occur in the Centennial State. The policies we offer in Colorado come with wildfire coverage automatically.

Coloradans are also eligible for our Signature Coverage Collection for high-value homes.

Standard home insurance policies in Colorado have some exclusions, like earthquakes, mold, and infestations. Some of the most common excluded losses are:

• Floods. A standard home insurance policy does not cover flooding, including floods caused by overflowing bodies of water or storm surges. 
• Earthquakes or sinkholes. Damage caused by earthquakes, sinkholes, or other land shifts is typically excluded from coverage. 
• Infestations. Most policies exclude coverage for pest or rodent infestations.
• Mold, mildew, and rot. Colorado home insurance policies often exclude or limit coverage for mold, mildew, and rot.
• Vacant homes. If you own a home that is vacant for a specific period of time, coverage may be excluded or limited.

Home insurance coverage needs vary based on your risk tolerance and personal situation. Here’s an idea of how much coverage you might need in Colorado:

• Dwelling insurance. Your dwelling insurance coverage limit should be enough to cover the full cost of rebuilding your house to its original condition after a total loss.
• Personal property insurance. Your personal property coverage limit should match or exceed the total value of your personal items, like furniture, electronics, decor, fixtures, clothing, and tools. A good way to determine if you have enough coverage is to complete a home inventory. 
• Personal liability insurance. Personal liability insurance covers your losses if you get sued for third-party bodily injury or property damage. Pick a policy limit that would cover your personal assets, like savings and real estate, if you were sued after a covered incident.
• Medical payments insurance. Most home insurance policies in Colorado provide a small amount of coverage for medical payments insurance (usually around $1,000). But you can choose higher limits if you want more peace of mind.
• Additional living expenses. In general, you should choose an additional living expenses coverage limit that’s about 20% of your dwelling insurance limit. So, if your dwelling limit is $300,000, having $60,000 in additional living expenses should be sufficient.

Colorado homeowners can often benefit from adding optional coverages for more tailored protection, such as guaranteed replacement cost coverage. Here are some of the endorsements that can be beneficial in Colorado:

• Flood insurance. Flooding is a common occurrence in certain parts of Colorado, so having flood insurance can be a good thing to have. 
• Water backup insurance. Water backup insurance will cover damage that occurs if water backs up into your home through a failed sump pump or clogged sewer line.
• Extended replacement cost coverage. This endorsement will extend your dwelling coverage limit by a set amount, such as 25%. Extended replacement cost coverage can be beneficial after a natural or widespread disaster that can cause a surge in material and labor costs. 
• Ordinance or law coverage. If your home is damaged by a covered peril and you discover you need to make additional repairs to meet local building requirements, this endorsement will cover the cost to bring the damaged portion of the home up to code.