Some policies do not provide replacement-cost coverage, but you may be able to add it with an endorsement for additional premium. Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home’s square footage, number of bedrooms and number of bathrooms. Inform the agent of any custom features that are part of the house.

When calculating your home’s replacement cost, deduct the value of the land, foundations that are below the surface of the ground and other items, such as landscaping and lawn sprinkler systems. Construction costs change, so it’s wise to update your coverage amounts annually.

Household contents automatically are covered only for their “actual cash value.” Actual cash value is the replacement cost minus depreciation. You can buy replacement-cost coverage for your possessions as an endorsement. Homeowners policies offer very limited coverage for valuables like jewelry, furs, cash and stamp and coin collections. You can buy separate endorsements to increase your coverage.

A homeowners insurance policy in Colorado usually combines five different types of coverage. According to the Colorado Division of Insurance (CDI), these include the following:
  • Dwelling pays for damage or destruction to your house and any unattached structures and buildings, such as fences, detached garages and storage sheds.
  • Personal Property pays for theft, damage or destruction of the contents of your house, including furniture, clothing and appliances.
  • Liability protects you against financial loss if you are sued and found legally responsible for someone else’s injury or property damage. A homeowners policy automatically provides $25,000 in coverage. You can buy up to $1 million in coverage for an extra premium.
  • Medical Payments pays medical bills for people hurt on your property. It also pays for some injuries that happen away from your home, such as your dog biting someone. A basic homeowners policy pays $500 in medical bills. You can pay extra and get up to $5,000 in medical payments coverage.
  • Loss of Use pays your additional living expenses (e.g., temporary housing, food and other essential expenses) if your home is too damaged to live in during repairs. Most policies pay 10–20 percent of the amount of your dwelling coverage.

— Factors That Affect Your Premium
Your premium will be based on several factors. According to the CDI, these include the following:
  • Where you live
  • Level of fire protection available in the area
  • Construction type of your home (brick or frame)
  • Type of policy you purchase
  • Amount of coverage you buy

— Lowering Your Premium by Increasing Your Deductible
homeowners policies generally carry a basic deductible of 1 percent ($1,000 on $100,000 of coverage) of the insured value of the dwelling. Deductibles are available as high as 5 percent and as low as $100, although not all companies offer deductibles that low. If you raise your deductible, you’ll have to pay more out of pocket for repairs and replacement costs before your insurance company will begin to pay. For example, purchasing a $250 deductible in lieu of a $100 deductible will mean you will normally pay $150 more out of your pocket at the time of a loss.

Companies may offer premium discounts if you take steps to reduce the chances of a loss. Each company sets the amount of the discounts it offers. Following are some of the more common homeowners discounts available:
  • Impact-resistant roof
  • Noncombustible roof
  • Burglar, fire and smoke alarm systems
  • Automatic sprinkler systems
  • Fire extinguishers
  • Premises in good condition (companies set their own standards)
  • Age of house (companies set own standards)
  • Marking personal property with an identifying number (inspection required)
  • Good claims experience for three consecutive years
  • Other policies with same company or group
  • House insured to full replacement cost
  • Senior citizens discount

The Denver region is relatively free from natural disasters; however, heavy rains can cause flooding and high winds can cause major damage to a home and occupants. These threats are of special concern to residents living along rivers and lakefront property. Depending on your home’s location, you may select additional coverage to protect your property and belongings. Even if a home is not located near a lake, flooding can occur from heavy storms and cause major damage to a home and occupants.

— Flood Insurance
Home Insurance policies don’t cover floods, but coverage is available and underwritten by the U.S. Government (specifically FEMA), which covers damage caused by rising water. The cost of insurance varies substantially based on the elevation of the property relative to the historical flood evaluations. Regardless of where you live, floods can happen anywhere due to storms, snowmelt or rising rivers.

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