Colorado homeowners insurance FAQ
Your Colorado home is more than just a structure where you live. It’s where you keep your personal possessions, relax after a long day and keep warm on a cold night. It houses your family and all your memories. That’s why it’s important to protect it with an adequate amount of homeowners insurance, so that if an unexpected event occurs, you are covered.
What coverages are included in a standard home insurance policy?
A standard policy has four main types of coverage: coverage for the structure of your home, your personal belongings, liability protection and additional living expenses.
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Your Home Structure
You should buy enough home insurance so that you could rebuild your Colorado home if it is damaged or destroyed. Most standard home insurance policies also cover structures that aren’t attached to your home as well, such as sheds, garages and fences.
Liability Coverage
Liability coverage protects against bodily injury and property lawsuits in the event you are held liable. It pays for your defense in court and any damage awards you are required to pay, up to your policy limit. This includes no-fault medical coverage, which pays if someone is injured in your home.
Personal Belongings (also known as contents coverage)
Most policies cover your personal belongings at a limit between 50 and 70 percent of the amount you have your home insured for. You should conduct a thorough home inventory before you purchase insurance, so that you can determine how much coverage to place on your personal effects. Most Colorado home insurance policies cover your possessions anywhere in the world.
Additional Expenses Coverage
If your home is damaged by a covered claim so badly that you must leave during repairs, a standard homeowners policy will pay for your hotel stay, restaurant bills and even reimburse you for lost rental income if you rent out part of your home.
Is my home insured for earthquake or flood?
NO! Earthquake and flood insurance must be purchased separately from your home insurance. Earthquake and flood insurance differs from coverage for other disasters. For example, earthquake insurance covers a percentage of the damages instead of a dollar amount.
What is the difference between actual cash value and replacement cost?
An actual cash value pays to rebuild your home, minus depreciation expense for "wear-and-tear". A replacement cost policy pays to replace your home and personal property without a deduction for depreciation.
Is homeowners insurance required?
Homeowners insurance is not legally required like auto insurance. However, if you finance your home through a mortgage company or bank, they will require you to have some kind of insurance policy to protect their interest in your home. Even if you don't have a home mortgage, insuring your home adequately protects you financially in the case of a total loss.
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