Landlord Insurance in Colorado: Protect Your Property

Owning a rental property in Colorado can be a lucrative investment but it comes with certain risks. From tenant damages to liability claims, unforeseen issues may impact your financial stability.

This is where landlord insurance in Colorado comes in. Unlike homeowners insurance (designed for a property you dwell in), landlord insurance protects your rental property and safeguards your financial interests.

This article will explore everything you need to know about Colorado landlord insurance, including its costs, coverage options, and more.

Key takeaways

Colorado law doesn’t require property owners to have landlord insurance. However, if you have a mortgage, your lender may require it.
On average, landlord insurance in Colorado costs between $900 and $2,902 per year.
Landlord insurance typically covers three main areas: property damage, liability protection, and lost rental income if tenants can’t rent your property.
There are some actionable tips you can use to lower premiums. For instance, you could bundle policies, raise your deductible or install safety features.

Is landlord insurance required in Colorado?

As a property owner, you may wonder, “Do I need landlord insurance?”

While it’s not legally required, most lenders will mandate landlord insurance if you have a mortgage on your rental property.

Even if it’s not required, it’s best to have this coverage in place to protect your investment – whether a home, apartment, condo, or other units.

There are numerous reasons why landlord insurance is crucial for Coloradans:

Home insurance won’t be enough

Unlike homeowners insurance in Colorado, which is designed to cover owner-occupied homes only, landlord insurance provides tailored coverage for rental properties.

Landlord insurance provides protection against property damage, liability claims, and loss of rental income – none of which is covered under a standard home insurance policy for rental properties.

Without landlord insurance, you would have to pay for damages and liabilities out of pocket, which may lead to substantial financial strain.

High risk of natural disasters and crime

Another reason you need the best landlord insurance in Colorado is that while it’s a beautiful and thriving state, it comes with risks – such as higher-than-average property crime rate, harsh weather, flooding, and tornadoes in certain areas.

For instance, according to one report, the state of Colorado ranks 4th in the nation for combined property and violent crime rates. Another report shows Colorado is the 5th most at-risk state for natural disasters.

While these risks may result in property damage or claims, landlord insurance in Colorado can provide valuable protection for peace of mind.

How much is landlord insurance in Colorado?

The landlord insurance cost in Colorado typically ranges between $900 and $2,902 per year, depending on various factors such as property location, size, and type of coverage.

This insurance protects rental property owners from financial losses due to damage, liability claims, or loss of rental income. However, rates can vary significantly based on where the property is located in the state.

Let’s break down the costs further and explore how location impacts premiums.

Urban areas: Denver

Landlord insurance in Denver – the state’s largest city – tends to be on the higher end of the spectrum. Property owners can expect to pay around $1,000 to $2,000 per year in insurance premiums, primarily because urban properties face greater risks like theft or vandalism.

The high population density in Denver also increases liability risks, contributing to higher insurance rates. If your rental property includes additional amenities such as swimming pools or is in a high-traffic area, your premiums may increase further.

Mountain towns: Aspen and Vail

In tourist-heavy areas such as Aspen or Vail, landlord insurance rates are also higher. For instance, in Vail, the standard cost for homeowners insurance is about $1,225 per year. Landlord insurance typically costs about 25% more than homeowners insurance, which would suggest an estimated premium of approximately $1,531 per year.

These regions are more prone to natural disasters like wildfires or heavy snowstorms, which increase the cost of insuring properties.

Additionally, the high value of real estate in these areas means it costs more to repair or replace damaged structures, which is factored into the premiums.

Suburban areas: Boulder and Fort Collins

Landlord insurance costs are more moderate in Boulder, Fort Collins, and other suburban cities of Colorado.

These areas often have lower crime rates than urban centers, which reduces the risk of theft or vandalism. Plus, suburban properties are relatively newer and better maintained, leading to lower premiums.

Coastal insurance: lake properties in Grand Lake

If your rental property is near a lake, such as in Grand Lake, you may pay slightly higher rates. That’s because properties near water are exposed to unique risks, such as flooding or water damage, which insurers consider when calculating premiums. Adding flood insurance may also increase your overall costs.

Types of Colorado landlord insurance coverage

Also called rental dwelling coverage or rental property insurance, landlord insurance in Colorado offers property owners a customized solution to protect their rental properties against potential risks.

Here are a few landlord insurance coverage options you’ll typically find in a standard policy:

Property coverage: Colorado landlord insurance includes dwelling coverage and coverage for other structures, such as garages or sheds. This coverage protects your rental property from damage caused by fire, lightning, wind, hail, ice, snow, and other covered perils. The policy also offers personal property coverage for items employed to maintain the rental, like lawnmowers, tools, or other equipment. However, it doesn’t cover your tenants’ belongings.
Liability coverage: Landlord liability insurance could help protect you if someone gets hurt on your property or if you accidentally damage someone else’s property. It could cover medical expenses, property repairs, and legal costs such as attorney fees or court settlements if you’re sued.
Loss of rental income: This coverage could help replace lost rental income if your tenants need to move out while you repair damages from a fire, storm, or another covered event. However, it doesn’t cover lost rent if a tenant can’t pay due to financial issues like a job loss.

Local independent insurance agents can help you explore additional coverage options to protect your rental property.

What else does landlord insurance in Colorado cover?

Every property owner’s situation is different. The risks you face can depend on factors such as the type of property you own – whether you have long or short-term tenants – and the age of the building.

Some of the best insurance companies in Colorado offer additional coverage options that Coloradans can add to their landlord insurance, such as:

Vacant dwelling coverage: This coverage protects your rental property when unoccupied. Without this, your insurance carrier may not cover damage if the property is vacant for more than 30 days.
Building code coverage: If your property is older, it may not meet updated building codes. If damaged, you may have to upgrade to comply with current regulations. This coverage could help reimburse those unexpected costs.
Rent guarantee insurance: Often called rent protection insurance or rent default insurance, it provides ‘some’ protection if a renter fails to pay rent. It could cover lost income for a set period, usually long enough to complete the eviction process. Rates are typically based on your rental amount and the tenant’s creditworthiness.

Colorado property owners should explore all available coverage options to ensure their investment and income are fully protected.

Colorado landlord insurance coverage exclusions

Like any other insurance policy, landlord insurance has its limitations. In Colorado, rental property insurance typically won’t cover:

Tenant's personal belongings: Landlord insurance won’t cover the personal property of tenants, such as furniture, clothing, or electronics. Tenants must obtain renters insurance to protect their belongings in the event of damage or theft.
Flood damage: Flood damage isn’t covered by landlord insurance or homeowners insurance, even if a covered storm causes the flood. To protect against this risk, you’ll need to add a separate flood insurance policy.
Intentional damage by tenants: If a tenant deliberately damages your property, most landlord insurance policies won’t cover the repair costs.
Normal wear and tear: Routine maintenance and gradual deterioration, such as peeling paint, worn-out carpets, or aging appliances, are excluded from coverage. Landlords are responsible for handling these issues as part of regular property upkeep.
Tenant negligence: Damages caused by tenants, such as unreported leaks or unauthorized renovations, are usually not covered.
High-value items: Specialty items such as antiques, art, or expensive equipment are often excluded from coverage or have limited protection under standard policies. For such items, property owners should look for additional endorsements.

Make sure to understand what your policy does and doesn’t cover. This will help you avoid any unexpected surprises down the road.

How to lower your Colorado landlord insurance premium

Looking to save on your landlord insurance premium? You can do that with strategic actions and a proactive approach.

Whether you own a single rental property or a portfolio, implementing cost-saving measures can help reduce expenses and ensure adequate coverage.

Listed below are some actionable tips that could help lower your Colorado landlord insurance premiums:

Bundle your policies

If you have multiple rental properties, bundling them under one landlord insurance policy with the same insurance company could save you money.

The best insurance companies in Colorado nowadays provide bundled policies, which group all your properties under a single master policy. This method often includes tiered pricing, which could reduce the cost for each additional property.

Here are a few reasons why you should consider bundling policies:

It’s generally more convenient to work with one agent or company for all your insurance needs.
Discounts typically range from 5–15%, which can add up if you own several properties.
Bundling can streamline administration and provide property owners leverage to negotiate better rates.

However, don’t forget to compare bundled pricing with individual policies. This is because bundling doesn’t always guarantee the lowest cost. So, review both options carefully.

Increase your deductible

Raising your deductible is another way to lower your insurance premiums. A deductible is the amount you pay out-of-pocket before your insurance kicks in.

Many standard policies often have a low deductible, such as $500. Increasing it to $1,000 or $2,500 can lower premiums by 10–25%. Make sure you have some savings to cover the higher deductible if you need to file a claim.

If you own a high-end rental property where costly claims are more likely, a lower deductible may offer better protection.

However, for many landlords, opting for a higher deductible may be an effective way to cut costs without compromising coverage.

Install safety and security features

Add safety features to your rental property. This could reduce risks and potentially lower your annual landlord insurance premiums.

Some common upgrades property owners should consider include:

Smoke detectors and fire alarms: These could help minimize fire-related risks and may qualify you for potential discounts.
Burglar alarms and security systems: These systems could reduce the likelihood of theft and vandalism.
Deadbolt locks and reinforced doors: These enhance tenant security and deter intrusions.
Insurance providers may view properties with these enhancements as less risky, leading to lower rates.

Shop around

Don’t automatically renew your landlord insurance policy each year. Take time to compare quotes from multiple insurers, as rates can vary widely for similar coverage.

Get quotes from at least 3–5 national insurers and one local provider. Then, compare premiums, coverage details, exclusions, deductibles, and service quality.

Ask about discounts

Many Colorado landlord insurance companies offer discounts, but you often need to ask to take advantage of them.

Some possible discounts include:

Multi-policy bundling.
Loyalty renewals.
Good claims history.
Security systems or upgrades.

When you review your landlord insurance policy, prepare a list of questions to discuss potential discounts. Ask about eligibility requirements and explore all available options to reduce your costs.

Properly maintain your property

Regular maintenance can help not only attract and retain quality tenants but also help preserve your property’s value, lower insurance costs, and prevent costly repairs.

Here are some recommended maintenance tasks:

Replace air filters regularly.
Schedule routine pest control.
Test smoke and carbon monoxide detectors.
Drain water heaters periodically.
Re-caulk bathroom areas.
Clean gutters.
Conduct regular property inspections.

If a landlord maintains their property, they can reduce risks, improve tenant satisfaction, and save money on insurance premiums.

Screen tenants thoroughly

Tenant behavior largely affects the likelihood of filing claims. When you carefully screen potential tenants, you can reduce risks associated with negligence or property damage.

Look for tenants with a good rental history, stable income, and positive references. Insurers may consider these efforts as ‘reducing liability’ and may reward you with lower premiums.

Still have questions?

Curious to learn more about landlord insurance in Colorado? Here are some frequently asked questions to address common concerns:

Can a landlord require renters insurance in Colorado?

Yes, landlords in Colorado can require tenants to carry renters insurance. This policy protects tenants’ personal belongings and can include liability coverage, reducing the landlord’s financial exposure in case of tenant-caused damages.

How much renters insurance should a landlord require in Colorado?

Landlords typically recommend a renters insurance policy with at least $100,000 in liability and 10,000-30,000 in personal property coverage. This ensures tenants can cover damages or injuries they’re responsible for – protecting both parties financially.

Does landlord insurance in Colorado cover negligence?

Yes, landlord insurance in Colorado includes liability coverage for negligence. This means it could protect you if someone is entitled to damages because of your negligence, such as a slip-and-fall accident on your property. It also covers wrongful actions, like claims of discrimination against a potential renter.

Who has the cheapest landlord insurance in Colorado?

The cheapest landlord insurance in Colorado will depend on your specific circumstances. Companies like State Farm, Allstate, and Progressive often provide competitive rates, but comparing quotes and reviewing coverage details is essential.

What factors influence the price of landlord insurance in Colorado?

Several factors, including property location, size, age, and the type of coverage selected, impact the overall cost of landlord insurance in Colorado.