FAQs

1. Why is my Colorado home insurance increasing so fast? Colorado’s home insurance rates are rising due to the risk ratio.This includes severe hail and growing wildfire risks across the front range.

Additionally, the soaring cost of labor and building materials in the local market means that replacement cost values must be adjusted upward.

2. What is the Colorado ‘FAIR Plan’ and do I need it? The Colorado FAIR Plan is a state-mandated insurer of last resort for homeowners who cannot find coverage in the private market.

You must have been denied by 3 separate private insurers to qualify. While it provides essential protection for your dwelling, it typically offers more limited coverage and higher premiums than a standard policy.

3. Is Actual Cash Value (ACV) for roofs becoming the new standard in CO? For roofs on the older side, yes.

Many Colorado carriers are moving toward Actual Cash Value for roofs that are older than 10 or 15 years. This is to manage the high costs of frequent hailstorms. This means that your payout for a roof claim would be reduced based on the age and lifespan of your roof rather than the full price of a brand-new roof (Replacement Value).

4. What is a wind/hail deductible and why is mine so high?  The wind/hail deductible is your portion to pay when there is covered damage done to your home due to wind/hail before insurance covers their portion.

In Colorado, many insurers now require a separate wind/hail deductible that is calculated as a percentage of your homes total dwelling coverage. This means that if your home is insured for $500,000 and you have a 2% wind/hail deductible, you would be responsible for the first $10,000 ($500,000 X .02=$10,000) of a hail claim before your insurance would kick in.

5. What is a deductible buy back? A deductible buy back policy is an insurance product that reduces or eliminates the deductible you’d normally be responsible for paying on a primary insurance claim.

It’s common that these types of policies reimburse you for your deductible. While it does decrease your out-of-pocket expense come claim time, it will increase your yearly premium.

1. Why is my premium increasing even though I haven’t filed a claim? Premiums increase because insurers must adjust rates to offset the rising risk ratio.

Premiums are influenced by factors such as rising repair costs, extreme weather patterns in your area, and carrier claims experience based on a similar profile. Even with a clean record, your rates may adjust to reflect the overall cost of providing current materials and labor for all policyholders.

2. How can I lower my insurance premiums? The most effective way to lower your premiums would be to bundle your home and auto with the same carrier.

Other factors to consider are increasing your credit score, reducing traffic violations and at fault accidents, and participating in insurance company telematics programs. You can also increase your deductibles to decrease your annual premium.

3. What is the difference between Replacement Cost and Actual Cash Value (ACV)? Replacement Cost pays to replace a like/similar brand-new version of your item at today’s prices. Actual Cash Value only pays what the item was worth at the time of loss after accounting for wear and tear.

Think of buying it new at the store (Replacement Cost) vs buying it at a garage sale (Actual Cash Value).

4. Does my policy cover water backup or floods? Most likely, no.

Standard homeowners’ policies typically exclude damage from surface water (flood) or sewer and drain backups. Flood insurance is usually a separate policy managed through the NFIP or a private carrier, while water backup coverage is a common endorsement you can add to your primary homeowner’s insurance.

5. How much Dwelling Coverage (Coverage A) do I actually need? Dwelling coverage should only be the cost to rebuild your home today.

This amount will not be based on your current market value or what you bought the home for. For example, your home may be worth $600,000 on Zillow but that figure includes land and location. Your dwelling coverage should be based on the total cost to rebuild your home from the ground up at today’s labor and material rates.

6. Are my jewelry and high-value electronics covered? Most likely yes, but only up to a certain limit.

While your policy may provide some protection for personal belongings, most standard plans have a limit. The limit is often between $1,500 and $2,500 for categories like jewelry, watches, and high-end electronics. If your items exceed these amounts, you may need to schedule them individually or add a personal property blanket to ensure full replacement value. This coverage is subject to your specific policy limits, deductibles, and documented proof of ownership.

7. What is full coverage? The term “full coverage” is a common industry phrase that typically refers to an auto policy including both comprehensive and collision coverage in addition to state-required liability.

It is important to note that “full coverage” does not mean every possible scenario is covered, as deductibles, coverage limits, and specific exclusions still apply.

8. Should I join a Telematics (Safe Driver) program? Depending on your driving habits, yes.

Telematics programs use a mobile app or plug in device to track your driving habits, such as braking, speeding, time of day driven, rapid acceleration, and mileage in exchange for potential premium discounts. While these programs offer a great way for drivers to save money, your data is used to determine your risk level. Some programs may adjust rates upward if unsafe habits are detected. Every carrier has different requirements when it comes to this discount and who on the policy needs to be registered.

9. What is “Gap Insurance” and do I need it? Gap Insurance covers the difference between actual cash value of your vehicle and the amount you still owe on your auto loan or lease if the vehicle is totaled.

10. Does my insurance cover me if I drive for Uber, Lyft, or DoorDash? Mostly likely, no.

Standard personal auto policies generally exclude coverage for business use which includes ridesharing or delivery apps like Uber, Lyft, or DoorDash. Without a specific rideshare endorsement, you may face a gap in coverage between when your personal policy ends and the app’s commercial insurance begins.

11. Why is my insurance so much higher than my parents’? Insurance premiums are heavily based on risk experience.

Statistics show that drivers with fewer than ten years of experience are more likely to be involved in accidents, leading carriers to set higher base rates for this demographic. As you maintain a clean driving record, improve your credit, keep good student grades, and build your insurance history over time, you will typically see your rates decrease.

12. What is Umbrella insurance and why might it be necessary?  An Umbrella policy provides an extra layer of liability protection that kicks in after your standard auto or homeowners liability limits are exhausted.

It also adds some additional liability coverages not traditionally included on your homeowners liability. This policy can help protect your personal assets, such as your home and future earnings, from being seized to pay a judgment.