Insurance rates are climbing! Everyone seems to be aware of that fact right now, but many people may not completely understand why. One of the most frustrating parts of insurance is it’s not solely based on your personal insurance history (although that does play a part). Several factors contribute to the higher cost of home insurance in Colorado.
Natural Disasters: Colorado is prone to natural disasters such as wildfires, hailstorms, and floods. The nation had over 30 catastrophic natural disasters in 2023, the most ever in a single year, causing insurance companies to pay out over $50 billion. These damages and claims make insurers raise premiums (especially in areas where these events are common).
Population Growth: The rapid growth in areas of Colorado means an increase in demand for housing. Higher demand for housing can contribute to higher replacement costs, influencing insurance premiums.
Cost of Living / Inflation: The increase in the cost of living in Colorado can contribute to premiums. Construction costs and labor are more expensive, if those are higher, insurance premiums are likely to be as well. Most companies and contractors that fix damages to a home (roof, water damage, etc) are paid by insurance companies. As there costs go up so do their bills to insurance companies – directly increasing your rates.
Home Values: This increasing value of a home, leads to increasing replacement costs. To make sure you have adequate coverage for a loss you may have higher premiums.
Even with all these things seemingly working against us – there are ways to save on your home insurance.
The following tips can help you decrease your premiums.
Bundle Your Policies: It might not always be the lowest cost option, but most companies offer significant discounts
for bundling. If you are currently insuring your home and autos with different companies, call each company to
get a quotes with your policies bundled with them.
Have a Good Credit Score: A good credit score helps you qualify for lower insurance rates.
Stay Claims-Free: Avoid making small claims that can increase your insurance premiums. Fewer claims results in
lower premiums and no claims can qualify you for a claim-free discount.
Higher Deductibles: Having a higher deductible lowers your premium. You will need to make sure that you are
able to cover the deductible in the event of a claim. If you purchase a new build home with a brand new roof, or get
your roof replaced after a hail storm, you may want to increase your wind/hail deductible for a few years
as the chance of another claim soon after is unlikely.
Early Signing Discount: If you are buying a new home or your current policy is coming up for renewal – look at
switching sooner rather than later. There are significant discounts that can be locked into the life of the policy
if you get quotes and/or purchase a policy 7-10 days before the effective date.
And finally…..
Shop Around: Different companies offer varying premiums for similar coverages. Depending on a company’s
appetite for risk, they may be offering lower rates to attract new customers. If another company has
experienced a lot of claims recently in an area, their rates will increase to compensate for their losses.
While it may seem like a daunting task to shop for insurance, I promise you it can be a very easy experience. As an insurance broker, I can gather your information and look at multiple companies to see which is best for you. By simply providing your current dec pages or renewal notices I can have all the information I need. Having a quick call (or email) can also help us review what you are looking for. And once done, I am here to help if a claim or policy change ever needs to be made – no 1-800 numbers or service centers to deal with!
Reach out and let me help you save on your home/auto insurance.
