The Best Homeowners Insurance Companies in Colorado
The best homeowners insurance companies in Colorado will help cover your home against the devastating Colorado weather without breaking the bank. 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 best Colorado home insurance providers should also have the financial stability to back up any claims you need to file. A good customer experience and a history of satisfactory claims support doesn’t hurt, either.
With so many to choose from in the Centennial State, we put together a rundown of our five top picks to help take the guesswork out of the shopping process. We compared everything including market share, claims satisfaction, discounts, coverage policies, and financial strength ratings in order to help you find the best Colorado homeowners insurance for your home.
The Best Homeowners Insurance in Colorado: Summed Up
The 5 Best Homeowners Insurance Companies in Colorado
Allstate wins extra points for its discount offerings and unique coverage options. It offers extra home sharing protection for people in Colorado (and 11 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.
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 most of the other three non-military-exclusive companies we evaluated.
Another factor that put Allstate ahead of the rest was its mobile app, including the Digital Locker feature. This app makes it easy for you to create a record of your personal belongings which can be incredibly helpful when it comes time to determine just how much coverage you need.
“Homeowners in Colorado should be prepared for wildfires and significant storm damage to their home given the high degree of risk of these events. As a result, homeowners should definitely take the effort to create a home inventory that includes photos, videos, and documents of their personal property in the home (furniture, electronics, housewares, etc.) as well as the fixed assets of the house (appliances, equipment, building materials, etc.)”
John Bodrozic Co-Founder, HomeZada
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.
Farmers Insurance offers ample room to save with its discounts. 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.
Farmers’ online quote process doesn’t seem annoying until the very end. 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 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.
We had to go through a few hoops to get our quote from American Family. An agent emailed us and requested a Social Security number to get an accurate quote. You also have to enter your Social Security number into the online quote form. We prefer the ease of USAA, where you can get a reasonably accurate starting price with a few clicks.
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. Along with State Farm, it has the highest financial ratings of any of the top five providers in Colorado (A++ from A.M. Best), and it scored extremely well with Consumer Reports, earning the rank of “excellent” in all categories including ease of claims process and timeliness of payment.. The rest of the five providers we looked at lagged significantly behind USAA here.
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.
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, and provides an above 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 thing that sets State Farm apart from other Colorado insurers is that it doesn’t have a separate wind/ hail deductible. Most companies, hoping to defray costs, charge a separate, higher deductible for these perils. There’s a chance State Farm could save you money on costly claims, considering other providers’ wind/ hail deductibles may be as much as 2% of the home’s value — but costs will depend on your individual situation. One sure upside is that this rule simplifies the claims process, which is welcome news since Colorado has the second highest number of wind/ hail claims of any state.
On the flip side, State Farm’s single-deductible policy means that the company can’t offer a lower deductible for smaller losses, like theft or minor fires. We recommend speaking with your agent about the likelihood of these types of claims where you live. If you’re in an area with relatively high rates of property theft, for example, it may be worth considering an insurance company that’s able to offer a lower out-of-pocket for those types of claims.
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. The online quote tool is relatively simple to use, but it does require you to enter your Social Security number. If this is more information than you’re comfortable sharing online, we recommend speaking with an agent directly. 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.
How We Found the Best Homeowners Insurance Companies in Colorado
First, we singled out the top five homeowners insurance providers in Colorado by market share: State Farm, USAA, Farmers Insurance Group, Allstate, and American Family Insurance. Then, we used our review of nationwide homeowners insurance providers as a starting point and dug into each one individually. We looked at each company’s financial standing, pored over customers’ claims, examined satisfaction ratings, and compared coverage options and discounts. We also played the role of a homeowner in Denver to gauge the quote process and helpfulness of customer service agents.
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 reported 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 2018, while Denver had 16, 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 “storm chasers”
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 “storm chasers” — 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.
Familiarize yourself with 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.
Colorado Homeowners Insurance FAQ
Is homeowners insurance mandatory in Colorado?
No, you are not legally required to have proof of homeowners insurance in order to own a home. However, you will likely need homeowners insurance in order to qualify for a loan or mortgage. Lenders typically require it to protect the amount of money owed on the loan.
How much is homeowners insurance in Colorado?
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. Insurance rates are also highly personal. Everything from your credit score and your home’s 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.