How to Protect Your Colorado Dwelling
Each state is different when it comes to how much homeowners insurance is required by law. Colorado, as an example, is one of the few areas that doesn't require a homeowner to purchase insurance. However, if your dwelling still carries a mortgage, the lender will require coverage to protect their interest in the property. It's not uncommon for there to be differences in protection and paperwork required from a locality to the next. But regardless of the law, there are minimums for liability coverage and the like that reasonable people should carry. While a policy is an expense that Colorado doesn't require, your should keep your own peace of mind in mind.
For many reasons, you should consider buying protection that will not only ensure you have peace of mind at all times, but which will look after what many individuals view as their biggest investment - their houses. Consider buying protection that exceeds the minimum standards established by your local government. It is best to consider these minimal standards as a baseline when it comes to buying a plan. The ultimate goal should be to purchase the most coverage you can afford.
In the Rocky Mountain State, as already stated, if you have no mortgage, there is no minimum coverage required. But it you are wise, you will insure your home to shelter yourself from homelessness in the wake of catastrophe. And if you are financing your current home, there wil likely be standards you have to meet that have been put in place by your lending institution or ban in order to remain in compliance with the terms and conditions of your agreement.
Residential coverage is broken up into two main categories: Actual Cash Value and Replacement Cost.
Actual Cash Value
This is a way you measure the value of your insured property. Simply put, you can find the ACV by subtracting the amount a piece of property has depreciated from the cost it would take to replace it. You determine a "useful life" of the piece of property and calculate the percentage of remaining life. For example, if you bought a computer for $1500 two and a half years ago and lost it in a hurricane. Your insurance company may determine a normal lifespan for a computer is 5 years and a comparable new computer costs $1700. The damaged computer would have had 50% of remaining life so the ACV is $1700 times 50% or $850.
This is usually more expensive than Actual Cash Value policies, because this usually offers a larger reimbursement that is more consistent with expected payouts, after you subtract the policy deductible. The purpose of this type of protection is to provide whatever it takes to rebuild the dwelling and replace the contents.
Other Things You Should Think About
Think of endorsements as add-ons that are not typically found in basic plans. We encourage you to consider the following:
- Personal Property
Most policies will offer a certain level of protection for the items located in your home, but some people need more. If you have high value items or run a home business, this can become an essential add-on to consider. Review your policy documents and use your home inventory as a reference when thinking about this.
- Additional Living Expense
If you are temporarily displaced because of a peril, this will help you maintain a consistent quality of life throughout the claims and rebuilding processes.
This add-on is essential for those who live in a floodplain.
If you are a renter, don't assume your landlord's policy will protect youyou're your possessions. In the vast majority of cases, it won't. Look for an option that includes liability and medical payments.
This will look after the personal property and improvements made to a condominium building.
- Mobile Homes
If you use a mobile home as a permanent residence, this protection becomes very valuable. Look for a reputable provider that offers this essential product.
Don't look at the state's lax insurance legislation as an excuse to forego essential coverage, instead make sure that you are covered by a plan that will shelter your assets and personal property. For more information about how you can enjoy essential coverage at great pricing, we recommend you take a look at the official site of the Colorado Department of Regulatory Agencies so you can make an informed buying decision. Additionally, you can contact us at any time with your questions.