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brown wooden house in the middle of grass fieldColorado Residents – What you need to know about Homeowners Insurance

Serving Denver, Golden, Lakewood, Arvada, Morrison, Evergreen, Littleton and Summit County

Whether you own or rent; insuring the place you call home can help protect you financially if you suffer a loss due to fire, theft, vandalism, or other covered events.

Home insurance in Colorado isn’t cheap and it gets more expensive every year. By knowing the factors that drive your home insurance cost, you’ll have a better understanding of how to save money while retaining the proper coverage to protect your most valuable asset.

Factors Effect the Cost of Home Insurance?

The Cost of your home insurance policy is computed on many different factors. Below is the list of some of the most widely used factors.

Limits of Insurance

On a declarations page of your homeowner’s insurance policy, you will see ‘limits of insurance.’ This is the highest amount your policy will payout for each listed property coverage. Usually broken down as follows:

Coverage A – Dwelling or Building Coverage (Covers everything physically attached to the home)
Coverage B – Separate Structures or Detached Structures (Covers structures on the location, but not physically attached to the home)
Coverage C – Personal Property (Covers your belongings, not attached to the structure)
Coverage D – Loss of Use (Covers additional Living Expenses you incur while home is being repaired or rebuilt)
Coverage E – Liability (Covers acts of residents that cause injury or property destruction of others)
Coverage F – Medical Payment. (Pays for injuries to others that occur on your property)

Prepacked Coverage

Usually, the carrier will prepackage major coverage shown in the example above and set minimum coverage limits.  But you may choose a higher limit depending on your budget and comfort level.  So how much you end up paying, depends on how much coverage and options you purchase.

Optional Coverage

All carriers also offer ‘optional’ coverage such as sewer and drain, personal injury or scheduled jewelry coverage. Always ask what optional coverage is available to add to your policy. The additional cost may be well worth it.


Higher deductibles usually lower your premium price by shifting part of the loss payment to you if you do have to file a claim. For example, if you had a $500 deductible, you would pay this amount before the insurance carrier would pay the rest of the covered loss. Carrying a higher deductible will always result in a cheaper annual premium.

Age of Home

Insurance premiums are calculated using complex actuarial models. One factor all models use is the age of the home. Older homes have more frequent and more expensive insurance losses

Proximity to Fire Hydrants and Fire Dept Response Time

Fire is the costliest insurance loss, therefore the home proximity to a fire hydrant and the local fire department response time is a major factor in price of the home insurance policy.

Construction Type and Materials

The outer shell of your home protects inside from the elements. The material on the exterior of the home, (roof, siding, foundation) plays an important role in potential harm caused to your home from the weather. Also, some materials are more flammable than others and this factor is computed into your insurance cost.

Geographical Location

Homes in the dry Arizona dessert are much cheaper to insure than in Colorado. That is because the dry air and lack of snow and hail in the dessert means these homes experience far less insurance losses than the homes located in Colorado, or the homes located in Tornado Alley of North Texas, Oklahoma, Kansas and Nebraska.

Past Insurance Claims

Sometimes past is a predictor of the future. Insurance companies know that a home with prior insurance losses is more likely to experience another insurance loss. This is especially true of the home with prior ‘water’ losses. The Insurance Information Institute states the average homeowner will file a claim once every 8-10 years.

Denver West Insurance Brokers is here to help you find the right insurance for your abode.
Whether you’re a home or condo owner, renter, or a landlord; one of our licensed agents will work with you to find a home insurance policy that fits your needs.  Call us at:  303-960-5290