The Best Homeowners Insurance in Colorado of 2023

Because of Colorado’s high housing prices and some unique environmental concerns, homeowners have several factors to consider when selecting the best homeowners insurance in Colorado.

Best Overall

The Best Homeowners Insurance in Colorado Option State Farm

State Farm

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Runner-Up

The Best Homeowners Insurance in Colorado Option Allstate

Allstate

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Best for Low Rates

The Best Homeowners Insurance in Colorado Option Lemonade

Lemonade

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A lot can be said for peace of mind—especially when it promises to protect the roof over one’s head. This may be one of the biggest advantages of homeowners insurance because if there’s one area where people don’t like to gamble, it’s with their home.

A homeowners insurance policy helps homeowners cover the costs associated with repairing or rebuilding their home after a covered event such as a fire or burglary. It also protects the personal belongings within it. With most mortgage lenders requiring proof of homeowners insurance before they’ll provide financing, the vast majority of homeowners will find themselves searching for a homeowners insurance policy at one time or another. But just as every home is different, so are the needs of every homeowner, so when it comes to selecting a provider, prospective policyholders have a lot to consider.

For example, Colorado homeowners who live in areas at high risk of flooding may need to purchase a separate flood insurance policy, while other residents may prioritize finding an insurance company that includes damage caused by hail as part of its standard coverage without charging a separate deductible. These factors come alongside universal insurance considerations like eligibility and cost, so each homeowner will need to create a list of priorities and review the options to find the best homeowners insurance in Colorado.

  1. BEST OVERALL: State Farm
  2. RUNNER-UP: Allstate
  3. BEST FOR LOW RATES: Lemonade
  4. BEST FOR SERVICE MEMBERS: USAA
  5. ALSO CONSIDER: American Family Insurance
The Best Homeowners Insurance in Colorado Options
Photo: istockphoto.com

What to Consider When Choosing One of the Best Homeowners Insurance Companies in Colorado

When homeowners are comparing the best options for homeowners insurance in Colorado, reviews written by policyholders can provide some insight into the customer experience, while AM Best reviews can indicate the company’s overall financial health. These factors, along with more obvious considerations such as coverage options and costs, are important for homeowners to weigh when selecting an insurance provider.

Coverage Amount

Choosing a homeowners insurance provider begins with a homeowner determining the amount of coverage needed. Many homeowners insurance policies cover the replacement cost of the dwelling, or the amount of money it would take to rebuild the home in the event of a covered loss. These policies also offer coverage for personal property and liability, though the extent of this coverage can vary widely among providers. The way this coverage is paid out will also depend on the policy terms, which will dictate whether the money received following a claim accounts for the depreciation of the home and possessions within. If a homeowner has a replacement cost policy, the insurance company will pay to replace damaged items with new items of the same type and quality. If the policy has actual cash value coverage, however, the insurance company will only cover the depreciated value of the possessions, which means the policyholder will more than likely need to pay out of pocket to replace damaged items with new ones of a similar quality.

To determine how much homeowners insurance is needed, homeowners will need to consider what their home, personal possessions, and other assets are worth. Most insurance companies will provide estimates for this using their own tools, though a homeowner may choose to create their own inventory of their possessions to make sure they purchase sufficient coverage to replace them if they are damaged or destroyed by a covered event.

Policy Options

Each homeowners insurance policy is unique, largely in part because of the varying policy options offered by each provider. While some companies may include additional coverage within their standard policy, such as increasing dwelling limits to offset hefty rebuilding costs, others may only offer this type of coverage at an additional cost. For this reason, taking the time to understand the specific terms and conditions of each provider is crucial for homeowners when it comes to selecting the right one.

When shopping for homeowners insurance, prospective policyholders will want to have their priority list nearby to understand how each provider’s policy offerings suit their needs. They will also want to note whether there is an additional cost associated with the coverage types they require.

Insurance Premiums

Wondering how much homeowners insurance costs? For many, cost is one of the most important factors to consider with any type of purchase. With insurance, this cost is represented by the annual insurance premium. A homeowners insurance premium is the amount of money policyholders can expect to pay in return for their coverage. Although the specific way this premium is paid may depend on the provider or even the method of payment, most insurance companies offer flexible payment options on a monthly, quarterly, semiannual, or annual basis. For homeowners who have a mortgage, the insurance premium will be collected monthly as part of the mortgage payment until the loan is paid off.

To determine a homeowner’s premium, the insurance company will consider personal factors, such as the individual’s credit score and claims history, alongside property factors, such as the insured value, age, location, and general condition of the property. But insurance premiums will also differ among providers, making this a particularly important consideration for homeowners when obtaining quotes.

Quote Process

To be able to properly compare Colorado homeowners insurance companies, homeowners will need to go through the process of getting quotes from several of their top contenders. Most major insurance providers offer quotes online, over the phone, or with an agent if the company has a physical location near the homeowner’s residence.

But despite the growing popularity of online quote tools, estimates for Colorado homeowners insurance may be most accurate when they are obtained over the phone or in person. This is because many insurance companies offer policy add-ons and discounts that may impact the overall price of the policy. Because of this, homeowners seeking more clarity and guidance may find it helpful to speak with an agent to get a quote.

Claims Process

Having homeowners insurance is one thing, but actually using it is another thing entirely. Although some homeowners may go years without needing to file a claim, it’s still important that they understand the claims process for each homeowners insurance provider they’re considering. After all, homeowners who are well versed in their options for submitting a claim won’t have to worry about navigating a completely foreign process if or when disaster strikes. Therefore, when comparing providers, homeowners will want to consider how timely and convenient the claims process is designed to be with each insurer.

For example, online claims platforms have become commonplace for insurance providers, but some may be more user-friendly than others. Some companies may even allow policyholders to submit claims from a convenient mobile app. But while some homeowners prefer this hands-off, streamlined approach, others may wish to communicate directly with a claims expert who can provide direction and answer questions. To select a provider with a claims process that aligns with their personal preferences, prospective policyholders will want to review each company’s options for submitting a claim as well as the time it will take for a claim to be paid out when conducting their research.

Deductibles

Alongside insurance premiums, deductibles make up the other side of the cost consideration coin. In fact, the deductible on the insurance policy may directly impact the insurance premium. A homeowners insurance deductible is the amount of money the policyholder agrees to pay out of pocket for repairs before insurance coverage kicks in. For example, if a homeowner has a $1,000 deductible and makes a $10,000 claim, the insurance company will pay $9,000 and the policyholder will pay $1,000. Some companies may offer deductibles of set amounts, such as $500 or $1,000, while others may offer them as a percentage of the total coverage amount. Many providers will also have separate deductible options for events that are not covered under standard policies but are instead covered by endorsements.

When available, lower deductibles may seem like an obvious choice to keep costs lower when a claim is filed, but homeowners will need to be aware that this often leads to higher insurance premiums. The same can be said in reverse: higher deductibles, or agreeing to pay more at the time a claim is filed, will typically result in lower up-front costs.

Additional Policies

Standard homeowners insurance policies cover personal property to a limit, but certain high-value items are typically excluded. Homeowners who own jewelry, sports equipment, antiques, or expensive computer equipment will want to consider scheduled personal property coverage for these items to ensure they are protected should they be damaged or destroyed by a covered event.

Homeowners looking for high-risk homeowners insurance in Colorado may need to look into purchasing additional policies. For instance, Colorado homeowners who live in high-risk flood zones may need to take out a separate flood insurance policy, as flood damage isn’t covered under a standard homeowners insurance policy and most mortgage companies will require it. Policy add-ons and endorsements exist to allow homeowners to personalize their coverage to fit their specific needs, so it’s wise for policyholders to take advantage of them.

Discounts

Due to high property values, Colorado homeowners insurance rates can also be high, but many insurance providers offer discounts that can help lower the cost associated with protecting the property. Some of these discounts may be available for first-time policyholders, while others may be given to loyal customers who have stuck with their insurance provider for several years.

One example of a homeowners insurance discount comes in the form of policy bundling. If someone already has car insurance through a provider, that provider may give a discount if the policyholder bundles it with a new homeowners insurance policy. Discounts may also be available for doing things like installing security devices or replacing the roof.

AM Best Ratings

AM Best is an independent credit-rating agency that analyzes the financial strength and standing of insurance providers. AM Best ratings can tell customers how reliable and trustworthy an insurance company is based on its creditworthiness and financial stability. These are important factors for homeowners to consider, as a company’s financial strength can directly impact its ability to provide high-quality coverage and quickly resolve claims.

AM Best examines insurance company data like balance sheets and operating performance reports to determine its ratings, which range from a high rating of A++ (“Superior”) to a low rating of D (“Poor”), reflecting the agency’s level of confidence in the provider’s ability to meet its financial obligations. Based on this information, homeowners may feel more comfortable selecting an insurance company with a high AM Best rating.

Our Top Picks

To identify the top homeowners insurance companies in Colorado, we looked for providers that offer affordable rates, extra endorsements, and discounts opportunities alongside a smooth claims process and strong financial footing.

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  • Quote process: Online, phone, agent
  • Claims process: App, online, phone, agent
  • Deductibles: 0.5 percent, 1 to 5 percent, $5,000 or $10,000
  • Discounts: Multipolicy, protective device, impact-resistant roofing
  • AM Best rating: A++

Pros

  • High $1 million personal liability coverage available
  • Standard increased dwelling limit coverage
  • Generous 35 percent discount on home and auto bundles available
  • Multiple convenient ways to submit a claim
  • Impact-resistant roofing discount available
  • A++ AM Best rating

Cons

  • Unclear other-structures coverage

Why It Made the Cut: With competitive rates, generous discounts, and multiple convenient ways to file a claim, State Farm is one of the largest insurance providers in the nation for a reason. In addition to its standard coverage, State Farm offers dwelling coverage that can protect the homeowner if rebuilding costs exceed the home’s insured value. While some companies may offer increased dwelling limits at an additional cost, State Farm includes this extra coverage at no extra cost with Colorado policies. Colorado residents also have the option to increase their personal liability coverage to $1 million, which is a high limit within a homeowners insurance policy. This could come in handy if a homeowner, resident family member, or pet is found liable for damage or injury to a third party. The company rounds out its generous offerings with multiple discount opportunities, including an impact-resistant roof discount and a significant discount on home and auto insurance bundles of up to 35 percent off, which means Colorado policyholders may be able to save on their home and auto coverage by going with State Farm. When obtaining a quote from State Farm, homeowners will want to be aware that the online quote tool does not provide coverage limits for other structures on the property, such as detached garages or sheds. This doesn’t mean these structures have no coverage options, but customers seeking coverage for structures beyond the primary residence may benefit from getting a quote over the phone to avoid confusion. State Farm customers can file a claim online, over the phone, in person, or through the company’s user-friendly mobile app. This plethora of options means homeowners can choose the method that is most convenient for them, making it easier to file a claim. And residents seeking peace of mind from their insurance provider may be interested to learn that State Farm also has the highest possible rating from AM Best, an A++ grade, which signifies the company’s strong financial situation and creditworthiness.

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  • Quote process: Online, phone, agent
  • Claims process: App, online, phone, agent
  • Deductibles: 1 percent or 2 percent, $1,000 to $5,000; Windstorm/Hail: 1 percent or 2 percent, $1,000 to $5,000
  • Discounts: Multipolicy, protective device, responsible payment, claim-free, loyalty, new customer, home buyer, automatic payments, early signing, smoke-free
  • AM Best rating: A+

Pros

  • Unlimited loss of use coverage for up to 24 months
  • Wide range of extra endorsements
  • Multiple convenient ways to submit a claim
  • Optional online personal information protection

Cons

  • Separate windstorm and hail deductible

Why It Made the Cut: Loss of use coverage, a wide range of extra endorsements, and a unique personal information protection offering are just a few of the factors that make Allstate a great choice for Colorado homeowners. As part of its standard homeowners insurance policy, Allstate offers Colorado customers unlimited loss of use coverage for up to 24 months. This means the company will pay for living expenses (like food and lodging) above and beyond a policyholder’s normal living expenses for up to 2 years should the home be rendered uninhabitable following a covered event. This means that homeowners with an Allstate policy can rest easy knowing they won’t need to worry about paying for a roof over their head if the worst comes to pass. The company also allows customers to customize their homeowners insurance coverage by selecting extra endorsements to purchase from a wide variety of options. Some of these add-on options include extended coverage for roof surfaces, coverage for water backup, coverage for service lines, coverage to bring the home up to code, and replacing damaged property with energy-efficient upgrades. Prospective customers will want to note that Allstate has a separate deductible for windstorm and hail damage, which could lead to some confusion regarding out-of-pocket repair costs should this type of damage occur. However, the company offers multiple discounts to offset costs in other ways. Customers may be eligible for these discounts if they bundle their policies, remain claim-free, install protective devices such as hazard sensors and home security systems, or set up automatic payments. Allstate customers also have the option to enroll in personal information protection services that can help them track where their personal information is being shared online and shield them from fraudulent activity. To file a claim, Allstate policyholders will have several options, including over the phone, online, via the mobile app, or with a local agent. This way, customers who prefer the convenience of digital claims processes can go online or use the app, while those who would rather receive more hands-on support can speak directly to a representative for assistance.

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  • Quote process: Online
  • Claims process: App
  • Deductibles: $500 to $10,000
  • Discounts: Multipolicy, protective device
  • AM Best rating: No rating

Pros

  • Relatively low insurance premiums
  • Instant claim approval possible
  • Low $500 deductible option

Cons

  • Limited discount opportunities
  • Not currently rated by AM Best

Why It Made the Cut: Lemonade’s relatively low rates, flexible deductible options, and instant claim-approval process can help Colorado residents save time and money on their homeowners insurance policy. Lemonade’s standard homeowners insurance policies include all the basic protections homeowners expect at a relatively low cost. Although premiums will vary depending on each customer’s level of risk and selected coverage options, Lemonade offers relatively low rates overall, providing an affordable option to deal-seeking Colorado residents. In addition, the company also offers a large range of deductibles for customers to choose from, with options as low as $500, which could help customers save on out-of-pocket expenses when filing a claim. Although Lemonade offers relatively few discounts, customers can save on their homeowners insurance by bundling it with another policy or installing security systems and other protective devices on the property. And even without taking these steps, customers may find that Lemonade’s basic rates are relatively low to begin with, allowing them to obtain a good deal without the need for a big discount. The company, which uses an AI-based claims-processing platform, is able to rapidly assess and approve straightforward claims, allowing customers to receive their funds as quickly as possible. In some cases, claims may be approved instantly, though claims that show potential signs of fraud or require a more thorough review will take longer to process. Lemonade does not currently have a rating from AM Best, which may make it more challenging to determine its financial strength. However, the company does have an “A” rating from Demotech, a financial analysis firm that specializes in regional and specialty insurance providers. Lemonade’s “A” rating is said to reflect “exceptional” financial stability, which should help to assuage any concerns homeowners may have about the company’s financial footing.

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  • Quote process: Online (for USAA members), phone
  • Claims process: App, online, phone
  • Deductibles: Unknown
  • Discounts: Multipolicy, protective device, connected home, loyalty, claim-free
  • AM Best Rating: A++

Pros

  • Standard replacement cost coverage
  • Exclusive contractor network
  • A++ AM Best rating

Cons

  • USAA membership limited to service members and their families
  • Unknown deductible options

Why It Made the Cut: Service members and their families can get a great deal on homeowners insurance with USAA, which offers unique benefits like an exclusive contractor network. To be eligible for homeowners insurance coverage through USAA, customers will need to be an active or former member of the armed forces or have an immediate family member who fits that criteria. Prospective customers will need to sign up for a USAA membership before receiving a quote, which means specific deductible options through this provider are relatively unknown. But despite these limitations, USAA can be a great homeowners insurance option for those who qualify. One factor that sets USAA apart is that the company offers standard replacement cost coverage with every homeowners insurance policy. This coverage allows homeowners to receive new items to replace their older ones in the event of a covered loss and is often an extra cost with other companies. USAA policyholders can also take advantage of the company’s exclusive contractor network, which may make it easier to find qualified, reliable contractors and schedule covered repairs. This free service, called the Contractor Connection, matches USAA policyholders with local contractors who are vetted, licensed, and insured and also provides a 5-year workmanship guarantee on any work completed through the service. In addition to all of these offerings, the company boasts an impressive A++ rating from AM Best, meaning customers can relax knowing that their insurance provider has the assets needed to consistently pay out claims without delay.

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  • Quote process: Online, phone, agent
  • Claims process: Online, phone, agent
  • Deductibles: $1,000; Windstorm/Hail: $1,000
  • Discounts: Multipolicy, protective device, autopay, age of home, loyalty, renovated home, generational loyalty
  • AM Best rating: A

Pros

  • Standard diminishing deductible
  • Free wildfire prevention and mitigation services
  • Unique loyalty discount available

Cons

  • Relatively high insurance premiums
  • Limited online-quote policy options

Why It Made the Cut: Colorado homeowners seeking low deductibles might love American Family Insurance’s diminishing deductible guarantee alongside other discount opportunities. American Family Insurance, or AmFam, offers Colorado homeowners unique savings in the shape of diminishing deductibles, which come attached to every homeowners insurance policy. This means the customer’s deductible decreases for every year they go without filing a claim, and with a starting deductible of $1,000 on day one, this can mean significant savings for some homeowners. Colorado residents can also receive free added protection from wildfires as a result of the company’s partnership with Wildfire Defense Systems, Inc. This extra benefit may help prevent or mitigate damage from wildfires, and since it’s a free service offered to policyholders in Colorado, it only adds more value to an AmFam policy. Prospective customers can receive a quote online with AmFam, although policy customization options are limited through the online tool. Additional coverage options, deductibles, and other offerings may be available by speaking with an agent to obtain a quote. For some, American Family Insurance may offer somewhat higher insurance rates than those of other industry leaders, although this won’t always be the case as premiums are ultimately determined by each customer’s individual options and risk profile, among other factors. But to offset some of the cost of the premium, the company offers several discounts for customers to consider. One discount that particularly stands out is AmFam’s generational loyalty discount, which offers a lower rate to customers between the ages of 18 and 30 who have parents that are AmFam policyholders. This unique offering may provide yet another way for homeowners to save money on their insurance coverage.

Our Verdict

We gave the award for Best Overall to State Farm due to its myriad coverage offerings, large discounts on home and auto bundles, and various convenient ways to submit a claim, all while maintaining a commendable A++ AM Best rating. The Runner-Up award goes to Allstate because of its generous loss of use coverage as well as the wide variety of endorsements the company offers to policyholders to allow them to customize their policy.

How We Chose the Best Homeowners Insurance Companies in Colorado

To determine the best homeowners insurance providers in Colorado, we examined each company’s coverage options, including dwelling, personal property, personal liability, and loss of use, and considered how these options relate to the needs of residents of the Centennial State. We also considered any extra endorsements that might be available to customers to help them expand the scope of their coverage.

Cost considerations were another major factor, as well as deductible options and any available discounts that might allow homeowners to lower the total cost of their coverage. From a customer experience standpoint, both the quote and claims processes for each provider were assessed, and the financial stability and long-term outlook of each organization was also considered, referencing AM Best ratings when possible.

Before You Choose One of the Best Homeowners Insurance Companies in Colorado

Colorado homeowners insurance companies offer a wide range of coverage options at different price points, so before settling on a specific provider, it’s important for a homeowner to shop around. It’s generally recommended that homeowners obtain quotes from multiple companies to ensure they are getting the best price and coverage for their specific needs.

Because each homeowner’s situation is unique, shoppers will want to keep their list of priorities top of mind when comparing insurance companies. Although cost is an important consideration, and may very well be the top consideration for many households, factors like the type and amount of coverage as well as the customer experience are equally as important. After all, the cheapest homeowners insurance in Colorado is not necessarily the best—though it may be for some homeowners.

Cost of Opting for One of the Best Homeowners Insurance Companies in Colorado

Although insurance rates vary among providers, location is one of the biggest factors that determines the total cost of a homeowners insurance policy. With high property values and replacement costs, Colorado homeowners could, in some cases, pay more for their coverage than homeowners in other states regardless of the provider they select. The threat of wildfires, blizzards, floods, and hail could also impact the cost of coverage in Colorado.

But those seeking affordable homeowners insurance in Colorado will be happy to hear that many companies offer discounts and bundles that can lower their overall insurance costs. Deductibles selected will also play a role in determining these costs. The average cost for homeowners insurance in Colorado is $4,142 per year, which works out at $345 per month, for a policy with $400,000 in dwelling coverage.

The Advantages of Opting for One of the Best Homeowners Insurance Companies in Colorado

Homeowners insurance provides invaluable peace of mind to policyholders and promises to protect their home and possessions should covered events like theft, fire, burglary, vandalism, or certain weather events occur. Standard homeowners insurance policies also include liability coverage, which protects the homeowner in the event that a third party is injured on their property or if they are found legally liable for third-party damages themselves. Residents of Colorado who invest in a homeowners insurance policy can also benefit from:

  • Loss of use coverage to help pay for additional living expenses if the homeowner is required to temporarily relocate while repairs are completed following a covered event;
  • Several discount opportunities to lower the cost of homeowners insurance; and
  • Varying premium and deductible options to fit each homeowner’s individual needs.

FAQs

With multiple types of homeowners insurance on the market, varying levels of coverage among providers, and a long list of factors to weigh when choosing a policy, it’s understandable that Colorado homeowners may have some unresolved questions about how best to protect their home—but understanding the answers behind the following common questions can make it significantly easier to select a provider.

Q. How do I get homeowners insurance in Colorado?

To get homeowners insurance in Colorado, homeowners will need to determine the level of coverage needed, gather and compare quotes, and carefully weigh their options based on their needs.

Q. What is the average cost of homeowners insurance in Colorado?

The average homeowners insurance in Colorado cost is $4,142 per year for a property with $400,000 in dwelling coverage, though exact costs will depend on the property and the homeowner’s coverage selections.

Q. How does the crime rate in my area affect my homeowners insurance in Colorado?

Many factors play a role in determining homeowners insurance rates, including the location of the property, so homeowners based in areas that are prone to vandalism, theft, or crime may be seen as high risk and have to pay more for their coverage.

Q. Which company has the cheapest homeowners insurance in Colorado?

Of the top companies included in this roundup, Lemonade offered the lowest homeowners insurance rates based on the coverage criteria. That being said, specific rates will vary depending on the coverage needed as well as risk factors such as the age of the house, the building materials used, and more.

Q. What does homeowners insurance cover in Colorado?

Homeowners insurance in Colorado covers damages or losses caused by covered events such as wind, hail, fire, theft, and certain types of water damage, although coverage for these events can vary among providers.

Q. What is a good credit score for homeowners insurance?

To determine homeowners insurance premiums, providers will look at factors such as the homeowner’s credit-based insurance score—a score that measures debt and payment history but is weighted differently than traditional credit scores. Each provider has its own benchmark of what is considered a good score, but in general, higher credit scores will typically result in lower insurance rates from the best homeowners insurance companies.

Q. Is homeowners insurance required in Colorado?

Colorado homeowners are not required to have homeowners insurance by law. However, mortgage lenders typically require homeowners to have an insurance policy in place before they will provide financing. In addition, maintaining insurance is usually a condition of obtaining a mortgage, and if the policyholder lets their homeowners insurance lapse, the mortgage holder can purchase a new policy to replace it—typically at a much higher price.

Sources: Insurance.com

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Katie Ziraldo

Contributing Writer

Katie Ziraldo is a freelance writer and data journalist with a background in personal finance and real estate. With more than a decade of professional experience, Katie specializes in simplifying complex topics to create equitable, educational content. Her portfolio of work also includes The Detroit Free Press and Huffington Post. In her free time, you can find Katie hunting for home decor or cuddled up on the couch with her furry, four-legged friends.

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