Colorado Homeowners Insurance

Last Updated on September 29, 2020 by Andrew Lee

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It takes more than just a down payment to own a home. You also have to maintain it and make sure it remains protected, especially against inclement weather and other possible losses as well as damage-causing incidents.

The easiest, most practical way to protect your property, as well as the valuables it contains, is to purchase a Colorado homeowners insurance policy. With this, you can have a greater peace of mind and sense of security knowing that you don’t have to worry about out-of-pocket expenses for property losses/damages.

Average premiums for homeowners and renters insurance in Colorado

According to a recent National Association of Insurance Commissioners (NAIC) study, the average homeowners insurance policy premiums in the country is $1,096.

Homeowners paid an average of $1,160 putting it at the 26th place in the ranking from highest to the lowest expenditures

Renters, on the other hand, had a median expenditure of $203  putting the state in 13th place

ValuePenguin, a financial resource group, also conducted its own homeowners insurance-related study. It listed the monthly insurance payments of CO homeowners as $82.48.

When you compare Colorado’s annual insurance premium average with that of the national average, you’ll find out that the former has nearly 1.06% difference from the latter.

Coverage categories in the event of a loss

In standard insurance policies, you’ll typically find four major classifications. These include Coverage A to D. A covers structural losses, B covers other forms of structural losses, C covers contents, and D covers loss of use of the property/Additional Living Expenses.

The Additional Living Expense coverage applies when you find yourself in a situation wherein you can’t live in your home for a certain period of time. This will provide you with financial assistance in paying for temporary rent, food, gas, and mileage.

Key Facts and Market Trends in Colorado: In a separate report, NAIC revealed that there are 46 domestic insurance companies in the State of Colorado as of 2015. The total count, including domestic and licensed foreign insurance firms in the same year reached 1,487.

Insurance company settlements: waiting period in Colorado

Colorado homeowners insurance policy holders share the same question: how long will it take before their insurance company will settle with them. As the United Policyholders cited, this depends on many factors, such as the coverage included in the policy and their limits. Considering these, finalization of the settlement can take anywhere from several months to years.

Colorado state rules on cash value, replacement cost and depreciation

The world of homeowners insurance is quite the complex one. However, it is important you at least have a basic understanding, particularly the most commonly used terms.

Comparing Colorado’s annual insurance premium average with the national average, the former has nearly 1.06% difference from the latter.

Three of the terminologies you’ll encounter a lot of times include “Actual Cash Value” (ACV), “Depreciation,” and “Replacement Cost.” Here’s a formula that already includes all three: To determine the ACV, subtract the depreciation value (amount or percentage that factors in age and condition) from the total cost of replacement. The replacement cost is the amount of money that the insurance company will shell out to replace a damage/lost property. They may either settle with you in the form of a new item with the exact specifications, or one similar in terms of type and quality.

Having this type of insurance gives you peace of mind and a sense of security knowing that it protects your property and its contents you have worked so hard for. So never underestimate the power of maintaining a homeowners insurance policy: it can make all the difference in your finances in the event a natural or man-made disaster wreaks havoc on it.