Homeowners Insurance
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What is Homeowners Insurance?
Homeowners insurance protects one of your biggest investments: Your house. It covers a wide range of problems and circumstances. It typically protects your home and personal belongings from damage caused by various perils, such as fires, storms, theft or vandalism and other unforeseen problems.
The Four Categories of Coverage
Homeowners insurance companies in Denver, Aurora, Colorado Springs, Boulder, CO and surrounding areas typically provide coverage in 4 main categories. Learn about these categories below.
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Property: This includes your house and your personal property. This includes damage and theft. Personal property means your belongings: Furniture, curtains, rugs, clothes, shoes, jewelry, pots and pans, and TVs, down to the little knick-knacks on the bookshelves.
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Liability: This is for certain injuries or damage that members of your household are legally responsible for.
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Medical: This covers payments to others, for small injuries to guests on your property.
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Loss of Use: Reimburses you for extra expenses if you can't live at home because of a problem covered by the policy (such as a fire or storm damage). Get Your Free Quote Now!
What Does Home Insurance Cover?
The most common type of home insurance in Denver, Aurora, Colorado Springs, Boulder, CO and surrounding cities is an HO-3 policy. In the terms of the homeowners insurance world, “perils” are the circumstances that can cause a loss. HO-3 policies can either cover damage caused by :Named Perils" only. This means only circumstances specifically outlined in the policy are covered, or All Risk, meaning all circumstances are covered except for those specifically excluded in the policy. Below are the four named perils that most HO-3 policies in Colorado cover.
Types of Home Insurance Policies
Your homeowners insurance policy is designed to protect your investment on your home. However, not all policies are the same, and coverages can vary from carrier to carrier. Knowing what your policy says about specific circumstances and risks, and what to expect in case of a loss is important. It is important to also understand the different types of homeowners insurance so you can make an informed decision about the type of home insurance coverage that fits your needs and budget. Get the best home insurance quotes from the top home insurance companies in the Denver, Aurora, Boulder and Colorado Springs, CO areas.
Dwelling Coverage
Dwelling Coverage is the basis for all homeowners insurance policies in Colorado. It provides protection for the structure of your home including the floors, walls, built-in appliances and ceilings and any attached structures. It also covers a wide range of perils including fire, hail, theft and vandalism – and can help you rebuild your home in the event of a total loss (up to your policy limit).
Personal Liability Coverage:
Personal Liability Coverage protects you if you’re legally responsible for damage to someone’s property, or if you accidentally injure someone whether you’re at home or away from it. If you injure someone, your personal liability homeowners insurance will help pay for the injured persons medical bills and other potential expenses.
Contents Coverage:
Contents coverage protects items inside your home including your bed, sofa, computer, clothes and jewelry. If you ever lost all your possessions in a fire or flood, it would be expensive to replace them. Contents insurance covers the cost to repair or replace any items that are damaged. If a covered incident were to happen, you would receive a payout for the value of these items.
All Risks Coverage:
All Risks Homeowners Insurance is a type of insurance policy that doesn't name all the insured perils that are covered by the policy. Contrary to a named perils contract, an all risks policy does not name the risks covered, but instead, names the risks not covered. In so doing, any peril not named in the exclusions list is automatically covered.
Frequently Asked Questions
What is the average homeowners insurance cost?:The average home insurance cost is $1,192 a year, according to the National Association of Insurance Commissioners’ latest home insurance report. Average home insurance rates vary by state and the amount of insurance purchased. When you’re getting quotes from home insurance companies in Denver, Aurora, Colorado Springs and Boulder, Colorado areas, you want an insurance amount that covers the cost of rebuilding your home from the ground up. That’s an amount for a worst-case scenario, such as a fire or storm that completely destroys your home.
Do you pay home insurance monthly or yearly?: Depending on your mortgage and homeowners insurance company, you may be able to pay for home insurance yearly, in monthly installments or have it deducted from your escrow account. If you pay for home insurance through an escrow account, your mortgage lender may pay your home insurance premiums yearly on your behalf.
Do I want replacement value or actual cash value?: When you buy home insurance, you’ll likely have a choice between “replacement cost” and “actual cash value” coverage. Replacement cost is more expensive because it pays more in the event of a claim. It will reimburse you for new items that are like the ones that were destroyed. Actual cash value coverage pays only the depreciated value of your belongings. So if you had a 10-year-old sofa, you’re reimbursed for a 10-year-old sofa, not a nice new sofa. The option to choose actual cash value coverage may be only for “contents,” meaning your belongings. Many policies automatically include replacement cost coverage for the dwelling, meaning the house itself.
What is the difference between Insured value vs. real estate market value?:The insurance needed for your house is generally not the same as the market value of the home. Specifically, the insured value is the cost to rebuild the house if it were destroyed. The amount you could sell the house for may be more or less than the cost to rebuild. Your insurance agent can help you pinpoint an insured value, based on local building costs.
Do I include land value for insurance?: Don’t include the value of the land in your homeowners insurance amount. You want to insure your house and your belongings for the amount to replace them, and whether you own ¼ acre or 4 acres, it won't make a difference.
Does my home insurance go up every year?: Home insurance rates in Denver, Aurora, Colorado Springs and Boulder, CO and surrounding cities might go up every year due to several factors, such as making a home insurance claim, getting a dog or a installing a swimming pool. But some factors are out of your control. For example, home insurance rates can increase to account for higher labor and materials costs if you need to rebuild or repair a home. Goods and services used in construction can also increase with inflated costs. Also, rates can go up if your area has experienced disasters that have resulted in many claims from others.
What factors into home insurance rates?
Home insurance companies in Denver, Aurora, Colorado Springs and Boulder, Colorado areas use information about you and the property to determine your rate. This includes:
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The cost to rebuild the home.
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The age of the house (newer homes can be less expensive to insure).
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Your town’s fire protection rating (called a Public Protection Classification from ISO).
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Claims in your area or neighborhood (for example, frequent weather-related claims).
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The amount of insurance needed and the deductible you choose.
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Your history of making home insurance claims.
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Your credit rating
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