The Best Homeowners Insurance Companies in Colorado

Coloradans love to brag about getting 300 days of sunshine per year, but you probably won’t hear them brag much about the hailstorms. “We’ve had a real bad run on hail in Colorado,” says Scott Foster, A.A.I. of Foster & Associates, an independent insurance brokerage agency based in Littleton. “The claims have been massive with a devastating impact on homeowners premium costs and deductibles in Colorado.”

The hope, of course, is that weather is in a bad cycle and the storms will come to pass. But for now, Colorado homeowners are paying an average of $1,383 per year for an HO-3 homeowners insurance policy, according to the National Association of Insurance Commissioners. That’s higher than the US average of $1,173, but that number will vary considerably depending on your home and where you live in the state. An HO-3 premium in Denver, for example, averages a much higher $1,720 annually, while premiums in tornado-prone Sterling go all the way up to $1,934, according to the Colorado Division of Insurance.

The Best Homeowners Insurance Companies in Colorado

  • USAA
  • State Farm
  • Farmers
  • American Family
  • Allstate

Colorado Homeowners Insurance Reviews

USAA

USAA only insures active and retired US military members and their families, but with several bases in Colorado and the Air Force Academy outside Colorado Springs, it still manages to be the second-largest provider in the state. If you can get it, we think it’s one of the best options around for most Colorado homeowners.

Creditors and customers alike love USAA. It has the highest financial ratings of any of the top five providers in Colorado (Aaa from Moody’s, A++ from A.M. Best, and AA+ from S&P), and it scored extremely well with Consumer Reports, which gave it a 92/100 in overall satisfaction. The rest of the five providers we looked at lagged significantly behind USAA here, with State Farm and Farmers Insurance at 82, and American Family Insurance and Allstate at 80.

USAA has a flat, 1% deductible for wind and hail, which is about average for Colorado homeowners insurance. Be aware, though, if you’re just shopping around: USAA won’t give you much detail on its homeowners insurance up-front, and its website is equally thin on educational materials. USAA’s prices are also a bit higher than other homeowners insurance companies, but you get a lot more for that extra dollar. We used a current customer’s account to get a quote, and we found quotes were about 25% higher than every competitor but State Farm, but it covered us at a higher replacement cost than others — nearly the full market value of our home.

State Farm

By a wide margin, State Farm is the largest homeowners insurance provider in Colorado. It was second only to USAA in overall customer satisfaction on Consumer Reports, but only provides an average claims process, according to J.D. Power. The sample quote we got was the highest out of the five providers, but this is highly personal: Your quote might be lower, depending on your home and area.

One peculiarity of State Farm is its deductible: It’s a flat 1% of the total cost of damage, with a $1,000 minimum, no matter what type of damage your home suffers. State Farm is the only homeowners insurance we looked at in Colorado that doesn’t have a separate wind-hail deductible. Wind and hail constituted 40% of all nationwide homeowners insurance claims from 2010–2014, and Colorado had the second-highest number of claims of any state, according to the Rocky Mountain Insurance Information Association. To defray their costs, many providers now include wind and hail damage as a separate deductible, which typically costs anywhere from $1,000 to 1% of your home’s quoted replacement cost, out of pocket. With State Farm, there’s just one flat fee. That might be good or bad depending on your circumstances, but it certainly keeps things simple.

When it comes to the quote itself, State Farm was straightforward, never directing us to a sales-hungry agent. And where Allstate, American Family, and Farmers gave us multiple pricing tiers, State Farm gave us one price for our initial quote that spelled out coverage options clearly. We also appreciated State Farm’s reams of educational materials and tools, such as refinancing calculators, practical videos with tips (like how to thaw frozen pipes), and forms for scheduling your valuables.

Farmers

Farmers Insurance offers the most opportunities for discounts of the providers we tested (13, by our count). That’s roughly double the number of potential discounts offered explicitly by giants State Farm (6) and USAA (7). It also has three separate pricing tiers, with its middle tier comparable in pricing and coverage to the other insurers we reviewed. The claims experience scores even with every other widely available provider (three out of five stars), aside from USAA’s gleaming five-star rating. In keeping with that average experience, Farmers holds a solid, if unexceptional, financial stability rating.

We liked how Farmers Insurance offers a “Premier” option for guaranteed replacement costs (GRC). In the event your home is completely destroyed — especially relevant for people in wildfire-prone areas — Farmers will replace it entirely. This Premium tier costs twice as much in premiums as its Standard option ($5,765/yr for our sample home compared to $2,907/yr), but it sets Farmers apart from competitors that only quoted us at regular replacement costs, which vary and may not be sufficient to cover your entire home. For what it’s worth, an agent cautioned that the higher-tiered prices are “for reference” and are negotiable depending on need.

Unlike other competitors, Farmers also tacks on a $25 annual “policy/membership fee.” While that cost is fairly negligible over the span of a year (and, remember, you have more chances to qualify for a discount to make up for it), it still sticks out. And one more annoying thing about Farmers Insurance: its online quoting process. We spent 10 minutes entering our information for an “online quote,” expecting a nice, round number to be delivered at the end. Instead, all that work just got us redirected to an agent. To be fair, that agent promptly contacted us by phone and email and sent us a detailed quote, but for someone strictly shopping around, it’s a hassle.

American Family

American Family quoted us at the cheapest rate of anyone for our sample home — it was an incredible 60% lower than State Farm and USAA. Curiously, though, it quoted our replacement cost at half the market value of our home, which gave us pause, although the agent reassured us that the quote was an “open conversation” and that the replacement cost is negotiable.

One reason our American Family’s prices were cheaper on the surface: It charged more for deductibles. American Family charges deductibles for identity fraud ($250), property loss ($1,000), and hail ($1,000). So while the overall annual price we were quoted sounds appealing, it may even out over time with added deductibles.

Like Allstate and Farmers, we had to go through a few hoops to get our quote. An agent emailed us and requested a Social Security number to get an accurate quote. When it comes to quotes, we prefer the ease of State Farm and USAA, where you can get a reasonably accurate starting price with a few clicks.

Allstate

Allstate wins points for its web savvy, discount offerings, and unique coverage options. In May 2016, Allstate rolled out extra homesharing protection for people in Colorado (and five other states) who rent out their homes on sites like Airbnb and VRBO. Allstate is the first large insurer to offer such extended protection, and it could be a worthwhile consideration for Coloradans with mountain vacation homes or coveted real estate in major metro areas. For its online presence and coverage options, we like Allstate as a provider for first-time homeowners.

One downside for Allstate was its quoting process. Like Farmers and American Family, we filled out a bunch of information on online forms expecting to see a quote at the end. Instead, we were directed to a local agent. While friendly and helpful, the rep asked us for our SSN and driver’s license number, and getting the quote took eight hours to process, where others took a matter of minutes.

It may stand out for its appealing prices and customer service, but Allstate gets a comparable, "meh" score for its claims experience. It's rated three out of five on J.D. Power, just like the other three non-military-exclusive companies.

Allstate, like American Family Insurance, offered us an Elite pricing option with a higher deductible for wind and hail damage ($1,000) and a lower-priced Base insurance option with a costlier deductible (1% of the total cost). The odds that you’ll make a claim for wind and hail are high in Denver, so it’s no small risk to pick the Base option. The Elite tier also includes many optional coverages, such as identity theft protection and building code upgrades. The Elite option averaged about $700–$1,000 less per year for our sample home than USAA, State Farm, and Farmers, but like American Family, it covered us at a lower replacement cost — about 60% of our home’s market value. If you feel uncomfortable with the replacement cost quoted by an insurer, be sure to negotiate.

Guide to Homeowners Insurance in Colorado

Look past the price

Pricing, while important, is only part of the story — the ins-and-outs of coverage should be top-of-mind while you search for a policy. Many agents miss limitations and exclusions that impact your coverage when providing a quote, so be ready to advocate for yourself to ensure the policies you look at have what you need. “Would you insure half your car?” Foster says. “It’s important to ask questions. Look at all the additional coverage options.”

Location will impact your premiums

Where you live will affect your insurance rates more than any other factor. According to Allstate, the most common claims in Denver are for theft, water damage, and hail. The Denver Post reports that a bad hailstorm lasting just a few minutes can lead to far costlier claims than a forest fire that burns for days. Meanwhile, Durango, a smaller city in southwestern Colorado, manages to dodge hailstorms (it didn’t have one in 2017, while Denver had 19, according to StormerSite). Durango also enjoys fewer claims for property crime, hence its more affordable policy prices. As a result, homeowners in Durango pay about three times less than their counterparts in Denver.

Beware of “stormchasers”

Hail is such a widespread problem in Colorado that it has spawned its own cottage industry of roofing scammers. After a really bad hailstorm, scammers — known as “stormchasers” — often go door-to-door promising roof repairs, says the Denver Post. If you get an unlicensed contractor to perform hail repairs, you could end up damaging your home and your insurance premium.

Early June 2016 saw damaging hail throughout metro Denver, which spawned a local coalition led by the Better Business Bureau and the Colorado Division of Homeland Security and Emergency Management to raise awareness about these shady contractors. Before you sign a contract with a roofing contractor, here are some tips from the coalition on how to avoid getting played:

  • Don’t get pushed into signing a contract right away. Try to compare estimates with another contractor first.
  • Make sure the contractor is registered to conduct business in Colorado by checking this database, and see to it that they have a permanent address and federal tax ID number.
  • Ask for proof of the contractor’s insurance.
  • Don’t pay a contractor in full until the work is complete.
  • Don’t sign a contract with blank entries, or wishy-washy language, where a contractor may be able to add in terms later that you didn’t agree to.
  • Make sure the contract you sign complies with Senate Bill 38.

Colorado Homeowners Insurance FAQ

How much is homeowners insurance in Colorado?

In our tests, Colorado insurance premiums generally ranged from about $500-$2,000. Still, insurance rates are always highly personal, and homeowners insurance is no exception. Everything from your credit score and home’s location to its proximity to the nearest fire station can affect your premiums. Many providers also offer a number of discounts that can greatly reduce the number you’re quoted.

Does homeowners insurance cover wildfires in Colorado?

Most Colorado homeowners insurance policies will cover wildfires under fire damage provisions in their policies. Still, there are many steps you can take to reducing damage in the event of a wildfire. The Colorado Division of Fire Prevention and Control recommends clearing 200-500 feet around your home of all trees, brush, and leaves. You should also make sure your home is easily accessible to firetrucks and emergency responders.

What is the Homeowners Insurance Reform Act?

In 2013, Colorado Gov. John Hickenlooper signed the Homeowners Insurance Reform Act, with the goal of improving communication and understanding between insurers and the insured. At the time, the Waldo Canyon wildfires of 2012 had just destroyed over 300 homes, causing more than $450 million of damage. The devastation exposed a lot of problems with homeowners insurance in the state: Typically, insurers offer 12 months of living expenses for people as their homes are being re-built, but for many victims, 12 months wasn’t enough time, and they were left out in the cold.

In addition, many homeowners were lost in the confusing terms of their policy, and didn’t understand that “replacement costs” did not mean that their home would be replaced, but rather that the insurance company would only replace the home up to a specified dollar amount. Lucy Buck, an insurance agent for State Farm based in Denver, goes to extra lengths to make sure her customers understand replacement costs, but says, “There’s been a lot of litigation and confusion around the term.”

The act sought to clear up a lot of those confusions. Among its provisions:

  • Homeowners insurance policies must have more detailed disclosures, and be written at a 10th-grade reading level or lower.
  • Homeowners and their insurers must carefully discuss “replacement value” up front rather than after the home is destroyed, and language in the written policies must define replacement costs for customers — i.e., that they may not cover the total costs of replacement for a home.
  • All insurers must offer at least 12 months of living expenses for affected customers, and must offer the option for 24 months of living expenses.
  • Insurers must offer policyholders extended replacement-cost coverage for at least 20% of the replacement limit, plus another 10% to cover laws and ordinances.
  • Insurers must consider estimates from contractors solicited by the policyholders.

The Best Homeowners Insurance in Colorado: Summed Up

USAA
State Farm
Farmers
American Family
Allstate
A.M. Best Financial Strength Rating
A++
A++
A
A
A+
J.D. Power Overall Satisfaction Score
5/5
4/5
3/5
3/5
3/5