Getting a Home Insurance Quote in Colorado
The largest investment that the average person makes is the purchase of a home.
For that reason, it is necessary to protect your interests as an owner by getting homeowner's insurance covering not only the property you own, but also some of the legal liability consequences that can occur from everyday living. Insurance provides financial protection for you and your family.
Use the FREE comparison quotes tool above to start your search for home insurance!
Brief History of the Homeowners Policy in Colorado
Less than fifty years ago, homeowner's policies did not exist in Colorado. In the early 1970's, homeowners' policies in which the coverage offered under basic fire policies and liability policies were combined into one policy were offered.
For information on Homeowners Insurance in Colorado at present, go to their website.
Perils That May be Covered by a Homeowners Policy
Property coverage for homeowners is by peril –which means the possible threat or risk to the property you own. These perils may be:
- Fire – obviously, when the house or a portion of the house burns
- Smoke – damage resulting from smoke from a fire
- Hail – damage to the roof, windows, and leakage from a hail storm
- Lightning – when your property is struck by lightning – this can under certain circumstances include the electrical overload of circuits as a result of lightning
- Explosion – as a result of an appliance or sudden gas leak
- Vehicular damage – if someone other than you or your family runs into the house
- Civil unrest – usually this means a riot or some such thing. War is not covered.
- Theft – from the premises; in some policies this may be extended to property in your automobile
- Vandalism
- Trees and other falling objects – the trees usually must be yours – a neighbor's tree would come under their policy
- Weight of ice, snow, and sleet – in some areas these storms can cause a roof to collapse
- Freezing, rupturing, or sudden accidental overflow of an appliance, plumbing, or air-conditioning- This has become more literally interpreted to avoid taking care of slow leaks.
Deductibles, wherein the insurance company expects the owner to pay the first $500 to $2,000 of a loss are added to these policies. Think carefully about how much money you can afford to pay in the event of a loss before you commit yourself to a deductible even though they can reduce premiums.
Earthquake, flood, war, and nuclear accidents are specifically excluded from these policies. Separate policies can be purchased to cover these perils, particularly flood and earthquake. You should examine the possibilities of these occurring in your area.
Liability Insurance is offered as a portion of your homeowners' policy to pay for personal liability. A limit of $300,000 per accident is recommended along with $5,000 medical payments. Typically, this coverage has been used to pay for liability relating to dog bites or falls by individuals on sidewalks.
Examining Your Homeowners Policy Coverage
Homeowners' policies have not yet reached the point where each company sells exactly the same coverage within stated limits as is common with automobile policies.
Read your policy carefully because assumptions of coverage can be startling if you have a loss.
How much insurance should you have on your home?
The policy provisions in every homeowner's policy require you to insure your home to 80% of the replacement value of the home.
Replacement value and market value is not the same thing. The market value reflects what the dwelling is worth on the real estate market. Replacement value reflects what it would cost to replace the house as it is in the current builder's market. Therefore, you may want to increase your insurance.
Here are a few organizations that will help you figure your replacement cost:
- HMFacts – They charge $7.00 at present for their services.
- Accucoverage – Charges $7.50 per usage
- Building-cost.net – is free
Policy Limits
Policy limits are a formula – You figure the replacement cost of your home, and then subtract 20%. Examples of policy limits:
- Building – 80% of replacement cost - $107,000
- Other structures – (garden shed, garage, etc.) 10% of dwelling cost- $10,700
- Personal Property – what's in the home – 50% of dwelling cost- $74,900
- Loss of Use – if you have to move out because of a named peril – 20% of dwelling cost - $32,100
- Liability coverage - $300,000 is recommended to adequately protect you and your family. This coverage goes with you wherever you are – so check with your insurance company if, for example, one of your children inadvertently swings a bat and injures a neighbor. Automobile liability is excluded.
- Medical payments coverage - $5,000 is recommended just in case the Chihuahua nips Great-Aunt Mabel in the leg and she requires a doctor's care.
To add to your understanding of homeowners insurance, go to the website maintained by the National Association of Insurance Commissioners (NAIC).
Inventories and Videos
Consider, if your home were destroyed by one of the perils on your homeowners policy, would you be able to recreate a list of all the things you have? Would you even be able to prove that you bought that high-end HD TV with all the links to the Internet?
The best way to do an inventory of your home is to go through it with a video camera, narrating as you go. For example, "We purchased this small Monet when we were in Paris on our honeymoon for $........" and this leather sofa was purchased when our first child was born in 2002 from (name of vendor) for (cost). Sounds tedious, doesn't it? It will help immensely if you lose your home and the contents of your home. Keep the video safely in a bank.
Oh, by the way, that Monet? You should have it appraised and a rider placed on your policy to make sure it is covered. There are limits applying to individual fine arts and jewelry on an average policy.
If You Rent, Have a Condo, or Live on a Farm
Versions of the homeowners' policies can still protect you.
Tenant's homeowners policies cover the personal property and the interests of those who rent their homes. Condominium owners can purchase from a master condominium policy or on their own from an insurance agent.
Saving Money on Homeowners Policies
Get quotations from at least three different insurance companies on your homeowners' policy. Rates vary from company to company, depending upon that company's loss experiences in the area. Ways of saving money are:
- Getting multiple quotes
- Installation of fire, smoke, and burglar alarms
- Deadbolt locks
- Increasing deductibles
Other things can cause difficulties with insuring your home. The existence of the following things at your home may cause premiums to be increased or insurance to be denied:
- Swimming pools
- Trampolines
- Some pets – including historically aggressive dogs
Make certain that your agent is aware if these factors exist.
Be Diligent in Choosing Insurance Companies and Agents
Insurance agents and insurance companies are required to be licensed in the states in which they sell insurance. To examine the status of an agent or insurance company in Colorado, go to their website. The section indicating Insurance Producers (agents) will tell you about agents; whereas, the section indicating Insurance Companies will tell you about companies.
License and disciplinary actions are contained within the same area.
You should examine the solvency of an insurance company before purchasing insurance from them. Three main rating companies will give you this information:
Read Your Policy
Once you have received your homeowners' insurance policy, be certain to read it. Since forms vary from company to company at present, you need to know what perils are covered under the policy.
Insurance policies now are intended to be read by the average person, but if you do not understand the policy, be sure to ask. And always compare rates before making a decision, using the FREE search tool below!