Colorado Homeowners Insurance Guide

Each state has its own peculiarities where homeowners insurance is concerned. Colorado, for example, is one of the few states that doesn't require a homeowner to purchase homeowners insurance. However, if your home still carries a mortgage, the lender will require coverage to protect their interest in the property. It's not unusual for their to be differences in coverage and documentation required from one state to the next. But regardless of the law, there are minimums for liability coverage and the like that reasonable people should carry. While a homeowners insurance policy is an expense that Colorado doesn't require, your should keep your own peace of mind in mind.

For many reasons, you should carry a level of coverage which leaves you not only feeling secure, but which will protect most consumer's largest investment: your home. You should seek coverage that provides your home with more than the minimum industry standards. Think of the minimums offered by an insurer as little more than a place to start: protecting your residence and your way of life are worth the best level of coverage you can afford. Even in Colorado!

Colorado Homeowners Insurance Laws

In the Rocky Mountain State, as already stated, if you have no mortgage, there is no minimum insurance coverage required. But it you are wise, you will insure your home to protect yourself from homelessness in the wake of catastrophe. And if your home carries a mortgage, your lender will have specific insurance requirements which you will need to follow to be in compliance with your mortgage agreement.

Residential coverage falls into two general categories: Actual Cash Value coverage and Replacement Cost coverage.

Actual Cash Value Coverage

Actual Case Value Coverage pays the fair market value of the dwelling up to a contracted policy limit, minus the deductible. The way the fair market value is determined is by an appraisal based on comparisons to other homes of a similar nature, minus the value of the land on which the home is built. Coverage for homes under actual cash value coverage policies are limited to a specific amount, regardless of appreciation in value of the home.

Replacement Cost Coverage

Replacement Cost coverage can be more expensive up front than Actual Cash Value policies, but they also often result in payments more in line with homeowner's expected payouts, also minus the stated policy deductible. The intention here is to cover whatever amount it may cost to replace the home and its contents.

Additional Endorsements to Consider

Endorsements offer additional protection not included in the average homeowners policy. Among them are:

• Personal Property

  While most policies cover a certain level of personal property in a home, an endorsement will allow a homeowner to insure personal items to a higher level. This is especially desirable for those with an in-home business.

• Additional Living Expense

  Should your home be destroyed, this insurance lets you maintain your normal standard of living.

• Flood Insurance

  This is particularly important if your domicile is located in a floodplain.

• Renters Insurance

  This insurance covers the loss of personal property and loss of use of the rental unit due to fire and may include liability and medical payments coverage.

• Condo Insurance

  This insurance covers personal property and improvements to the individual condominium.

• Mobile Homes

  A few companies offer this coverage for mobile homes used as a permanent residence.

Regardless of Colorado's lax laws regarding homeowners insurance, you would be wise to invest in a policy that protects your investment. If you have more questions about how much coverage you need or the ins and outs of insuring a home in Colorado, you can review the official site of the Colorado Department of Regulatory Agencies for more detailed information. Or contact a homeowners insurance professional.