Colorado is home to a complex climate and extreme weather events, including tornadoes, windstorms, and firestorms. Colorado homeowners should consider purchasing a policy that protects their home against damages from such events.
How Much Does Home Insurance Cost?
In 2010, according to the Insurance Information Institute, the average annual premium for homeowners insurance in Texas was $926. However, your premium will vary based on things like your home’s age, condition, its construction materials, and location. Older homes may be more expensive to insure, and some companies may not insure a house in poor condition.
To get the best deal, the first step is to compare rate quotes from numerous insurance companies for identical levels of coverage. You can also get an idea of the average cost of a policy in your city and determine if you might be paying too much by taking a look at the premium comparison reports available through the Colorado Division of Insurance.
What Does It Cover?
The typical coverage encompasses your dwelling, your home’s contents, including furniture, appliances, and other possessions, outlying structures like detached garages or tool sheds, liability, medical payments to others, and loss of use/additional living expenses. Medical payments coverage is associated with your liability coverage and pays for a person’s medical expenses if they are accidentally injured on your premises. Note that liability insurance is not always included in homeowner’s policies. Loss of use or additional living expenses coverage pays for any expenses you incur for food, lodging, and storage that are over and above your normal living expenses as a result of your home being repaired or rebuilt after a covered disaster.
Do I Have to Get Home Insurance?
Home insurance is not required by law in Colorado, however mortgage companies may require homebuyers to purchase a policy to help protect the bank’s equity in the home. But buying insurance can help protect your house and property against damage from unforeseen circumstances, and liability for accidents that injure other people or damage their property.
Optional Coverage to Consider
- Flood. Most standard homeowner’s insurance policies do not cover flood damage, and flood insurance is generally purchased as an endorsement or separate policy. Your mortgage lender will only require you to purchase flood insurance if you live in an area that is at high risk for floods. However, flooding and flash floods occur in all 50 states and Coloradans in particular may experience flooding from unexpected causes, such as winter storms, snowmelt, and rapid runoff. Homeowners in participating Colorado communities can purchase flood insurance offered by the National Flood Insurance Program through local agents and insurance companies.
- Fire and Lightning. Fire and lightning coverage is generally included in most standard homeowner’s insurance policies. It’s important to read your policy carefully to ensure you are covered in the event of these perils, since some policies do exclude them. If you are thinking of forgoing this coverage for your home or mobile home, consider the fact that Colorado has long been host to wildfire events, with 2012 being one of the state’s worst fire seasons on record.
- Hazard. Home insurance and hazard insurance are terms often used interchangeably. Home hazard insurance policies protect you from having to pay for the damage or loss of your home or its contents because of fire, lightning, windstorms, hail, theft, vandalism, and other named perils. Homeowners often make the mistake of purchasing just enough hazard insurance to satisfy their lender without making sure they have purchased enough insurance to cover all their potential losses in the event of disaster. One way you can make sure you have enough coverage is to purchase replacement cost coverage rather than actual cash value coverage.
- Windstorm. Windstorm and hail coverage is also generally included in most standard homeowner’s insurance policies, but may be excluded from some. Since Colorado faces both tornadoes and severe thunderstorms and windstorms, it is important to look over your policy carefully and verify that you have this coverage. Colorado ranks ninth in the nation for frequency of tornadoes, according to the Colorado Division of Emergency Management, so this is an important consideration.
- Scheduled Personal Property Endorsement. If you own valuables that require a higher level of insurance coverage, you may want to consider a scheduled personal property endorsement or personal article floater. Such endorsements are important if you own valuables like expensive jewelry, fine art, firearms, antiques, and rare coins and stamps and want to fully recoup your losses if you have to make a claim. Each article is itemized and described in detail in the event that the item is stolen, damaged, or lost to various perils.
Mobile Home Insurance
Since mobile or manufactured homes face different, and in some cases greater, risks than traditional homes, they require a policy specially designed with mobile homes in mind. Such policies protect your mobile home dwelling itself, the contents inside, and even provides additional living expenses coverage if you have to stay in a hotel or lease an apartment while your home is being repaired or replaced after suffering damage. Like homeowner’s insurance, a mobile home policy can also include liability coverage and medical payments in the event that someone who is not named in your policy gets injured in your home and you are found legally liable.