Landlord Insurance Colorado

Last updated: May 24, 2025

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"The first rule in investment is don't lose and the second rule in investment is don't forget the first rule." - Warren Buffett

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Landlord insurance in Colorado is a specialized insurance package designed for rental property owners across the state—from Denver’s urban apartments to mountain town cabins. It functions similarly to homeowners insurance but is specifically crafted to address the unique risks and protections needed by landlords managing rental properties in Colorado’s diverse climate and legal landscape.

Whether you manage a single property in Colorado Springs or a portfolio of rentals in Boulder, landlord insurance Colorado is essential for safeguarding your investment against potential risks and liabilities.

Not all insurance policies labeled for homes will cover the specific needs of rental property owners. Understanding the fundamental coverages in a Colorado landlord insurance policy and learning how to optimize your premiums is crucial for landlords statewide.

Insurance costs are rising sharply nationwide, and Colorado is no exception, with premiums increasing by over 25% in the past year and a half. This trend impacts landlords’ bottom lines across the state—from Fort Collins to Pueblo—making smart insurance shopping vital to maintain rental income flow.

At OfferMarket, we analyze thousands of landlord insurance Colorado policies annually through our private lending and insurance divisions. Our data reveals that many Colorado landlords pay about 27% more than necessary due to working with non-specialized insurance agencies unfamiliar with the nuances of landlord insurance in Colorado’s market.

Some agents may push higher-priced policies due to commission structures or limited carrier options. Many do not specialize in Colorado landlord insurance, limiting their ability to provide cost-effective and comprehensive coverage.

To help Colorado landlords access better insurance options, we developed the OfferMarket Insurance rate shopping platform. It lets you compare quotes from over 40 carriers in under a minute, tailored for Colorado’s rental market. Our experts verify and quality-control each quote to ensure it meets Colorado’s rental property insurance needs while saving you money. Each month, we save Colorado landlords thousands of dollars—we look forward to helping you see how much you can save!

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What risks does Landlord Insurance Colorado cover?

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A full landlord insurance policy in Colorado typically includes these key coverages:

🏠 Property insurance tailored to Colorado’s weather and property types
⚖️ General liability insurance protecting against tenant or visitor injuries
💸 Business interruption insurance safeguarding rental income during repairs
🌊 Flood insurance (required separately if your property lies in a Colorado flood zone)

Property Insurance for Colorado Rentals

One of the biggest risks for landlords in Colorado is damage to their property, whether from hailstorms on the Front Range, wildfires in mountain areas, or winter freeze damage. Property insurance in Colorado landlord insurance covers repair costs, and often temporary housing for tenants if the property becomes unlivable during repairs.

Colorado landlord insurance offers three main property insurance “forms” covering various perils:

Property Insurance Form	Typical Coverage in Colorado
Basic Form	Fire, lightning, internal explosion (common fire risks in Colorado’s dry seasons)
Broad Form	Includes burglary, glass breakage, falling objects (such as snow or ice damage)
Special Form (DP-3)	Covers all risks of physical loss except those explicitly excluded, ideal for Colorado landlords

Basic Form Perils in Colorado

The most affordable landlord insurance in Colorado covers essential perils such as:

🔥 Wildfires and fire damage (a concern in Colorado’s wildfire-prone regions)
🌩️ Lightning strikes common in summer storms
💥 Internal explosions

Extended Coverage Perils

Colorado landlords can add extended coverage perils, remembered by the acronym WCcSHAVVER:

🌬️ Windstorm (Colorado’s strong mountain winds)
🦹‍♂️ Civil commotion
🔥 Smoke damage (not caused by fire directly)
🌨️ Hail (especially important in Colorado’s Front Range and mountain towns)
✈️ Aircraft damage
🚗 Vehicle impact
🌋 Volcanic action (rare in Colorado)
💥 Explosion
❗ Riot

V&MM (Vandalism and Malicious Mischief) is also an option, which can be important in certain Colorado urban areas.

Broad Form Perils

Colorado’s Broad Form landlord insurance adds coverage for perils such as:

🥷 Burglary damage (relevant for urban centers like Denver and Colorado Springs)
🧊 Ice and snow weight damage (a common issue during heavy Colorado winters)
🪟 Glass breakage (important for properties with large windows or mountain lodges)
🚰 Accidental water or steam discharge
🧊 Freezing of plumbing or appliances
✈️ Falling objects (e.g., tree branches during snowstorms)
⚡ Electrical surges
🏚️ Building collapse due to snow or structural issues
💥 Tearing asunder

Special Form (DP-3) Perils in Colorado

The most comprehensive landlord insurance in Colorado, DP-3, covers all direct physical losses except those specifically excluded. Common exclusions for Colorado landlords include:

🌊 Flooding – Colorado properties in floodplains will need separate flood insurance
🌎 Earthquake – an additional endorsement required in some parts of Colorado
🤡 Intentional damage
⚠️ Building code enforcement costs
🔌 Power outages off the premises
🇺🇸 Government seizure

General Liability Insurance for Colorado Landlords

General liability insurance protects Colorado rental property owners from claims if someone is injured or their property is damaged while on your rental premises. This coverage is crucial whether you own a Denver condo or a mountain cabin near Aspen.

Most Colorado landlord insurance policies covering 1-4 unit rentals provide liability limits ranging from $100,000 up to $1,000,000 per incident, and aggregate limits between $1,000,000 and $2,000,000 annually.

If a tenant slips on icy steps outside your Colorado property and sues you, or a contractor suffers an injury while repairing your rental, your general liability insurance handles medical bills, legal fees, and settlement costs.

Risks covered include:
🚑 Injury at the rental property in Colorado
⚖️ Legal defense and lawsuits

Business Interruption Insurance (Loss of Rent)

Landlords in Colorado also face the risk of rental income loss if a covered event forces tenants to vacate. For example, if a hailstorm damages your property in Colorado Springs and tenants must move out temporarily, business interruption insurance will cover lost rent.

This coverage is usually very affordable, often around $1 per $1,000 of annual rental income. So, for a Colorado rental generating $40,000 in yearly rent, business interruption coverage may cost about $40 per year.

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Flood Insurance for Colorado Rental Properties

Certain Colorado properties—especially those near rivers like the South Platte or in mountain valleys—may fall within FEMA-designated Special Flood Hazard Areas (SFHAs). If your rental is in one of these flood zones, lenders will require flood insurance.

Colorado landlords can check flood zones using FEMA’s Flood Map Service to determine flood risk. Flood insurance policies, commonly issued through the National Flood Insurance Program (NFIP), typically offer coverage up to $250,000 or the loan balance, whichever is greater.

Because Colorado experiences flash floods and localized flooding risks, flood insurance is a vital addition for landlords in vulnerable areas. It is separate from standard landlord insurance.

Landlord Insurance for DSCR Loans in Colorado

If you’re financing Colorado rental properties with a Debt Service Coverage Ratio (DSCR) loan, you must meet specific insurance requirements. DSCR lenders often demand strict coverage limits and endorsements, which can be challenging to meet without expert insurance support.

Your insurance premium directly influences your DSCR calculation and thus your loan eligibility and rental cash flow. To maximize loan amounts and optimize returns on your Colorado rental investments, securing affordable, compliant landlord insurance is critical.

Use our DSCR and cash flow calculators to see how insurance costs impact your rental property’s financials in Colorado.

How Much Does Landlord Insurance Cost in Colorado?

Several factors affect your landlord insurance premiums in Colorado:

Location

Colorado’s varied geography—from the high plains to the Rocky Mountains—affects insurance rates. Underwriters factor in local risks like wildfire zones near Boulder, hail frequency in Denver, or flood risk along mountain streams.

Repair costs for labor and materials can also vary widely, with mountain towns often having higher expenses.

Property Insurance Type

Your choice of property insurance form significantly influences costs.

While Basic Form is cheapest, many Colorado landlords prefer Special Form (DP-3) for broader protection against the state’s unpredictable weather and unique risks.

Dwelling Coverage Amount

The dollar amount of dwelling coverage selected is usually the largest factor in premium cost. If your Colorado property’s replacement cost is estimated at $250,000, you can insure anywhere from less than replacement cost up to full replacement cost.

We strongly advise Colorado landlords to insure at full replacement cost value (RCV) to avoid costly coinsurance penalties.

Deductible

Choosing a higher deductible lowers your annual premium. Many Colorado landlords opt for $5,000 deductibles instead of $1,000, balancing out-of-pocket risk and premium savings.

Claim History and Frequency

Insurance companies in Colorado assess risk based on your personal and property claim history. Frequent claims or serious losses across your properties can raise premiums or result in coverage limits.

Property-specific claims like water damage from frozen pipes during Colorado winters or fire claims from wildfire proximity impact rates significantly.

Crime Score

Crime data at the neighborhood level influences landlord insurance premiums in Colorado’s urban areas such as Denver, Aurora, or Colorado Springs. High crime scores related to vandalism or theft will increase insurance costs or restrict coverage options.

Though crime scores may not reflect security features at your specific property, they play a major role in underwriting decisions.

Property Condition

The state of your Colorado rental property greatly influences your landlord insurance premiums. Insurers evaluate factors such as the property’s age, maintenance level, and structural integrity to estimate risk. Properties in Denver, Boulder, or mountain towns that are well-maintained with modern systems—like updated HVAC to handle Colorado’s seasonal extremes, new plumbing to prevent freeze damage, and durable roofing materials rated for hail—typically qualify for lower insurance rates.

Conversely, older or neglected properties, especially those with aging electrical wiring or worn-out roofs vulnerable to Colorado’s frequent hailstorms, face higher premiums due to increased claims risk. Presence of hazardous materials, such as lead paint or asbestos often found in historic Colorado homes, can also raise costs or lead to coverage exclusions.

Insurers may require repairs or updates before issuing a policy, particularly for vacant properties or those in disrepair. Well-maintained properties may benefit from discounts if equipped with safety features like sprinkler systems, snow guards on roofs, or security alarms.

💡 Pro tip: Colorado landlords can reduce premiums by investing in regular upkeep, replacing outdated systems, and documenting improvements. Comparing quotes from multiple carriers and working with insurance specialists familiar with Colorado’s market can help secure the best terms. Prioritizing property condition lowers risk and protects your investment.

How to Protect Your Colorado Rental Property

While landlord insurance Colorado is a cornerstone of protecting your rental assets, other proactive steps complement your risk management:

Tenant Screening

Prevention is key in Colorado rental management. We advise conducting credit checks and background screenings on every adult tenant applicant. Establish firm standards for credit scores and disqualifying background issues. Avoid exceptions unless balanced with added security measures like higher deposits or personal guarantors.

Regular Maintenance

Inspect your Colorado rental quarterly to prevent small problems from escalating—especially important in areas with heavy snowfall or seasonal rains. Watch for roof leaks, basement water intrusion, or mold, which are common issues due to Colorado’s climate variations. Document all repairs and upgrades and share maintenance records with your insurer to potentially reduce premiums.

Tenant Maintenance Education

Educate your tenants about basic property care. Teach them to report maintenance promptly, change HVAC filters, and protect plumbing during cold snaps by letting faucets drip. These steps help prevent costly water damage and other common claims in Colorado’s rental market.

DP-3 Insurance (Special Form)

The DP-3 policy form, known as Special Form landlord insurance, is widely regarded as the most comprehensive coverage for Colorado rental properties. It provides replacement cost payments on covered losses, unlike actual cash value policies that factor depreciation.

What is Coinsurance?

Many landlord insurance policies in Colorado include a coinsurance clause. This means you must insure your property to a minimum percentage (usually 80%) of its replacement cost value (RCV). If you insure for less than this threshold, you may be penalized financially during a claim.

Coinsurance Formula

If insurance coverage is less than required:

(Insurance Carried ÷ Insurance Required) × Loss = Claim Payment - Deductible

For example: A Colorado rental home with a replacement cost of $300,000 but insured for only $150,000 suffers a $50,000 loss. With a $5,000 deductible, the payout calculation is:

($150,000 ÷ $300,000) × $50,000 = $25,000 - $5,000 = $20,000 claim payment.

This means you would cover $30,000 of repair costs out-of-pocket, underscoring the importance of insuring at or above replacement cost without coinsurance penalties.

Landlord Insurance Markets in Colorado

No matter where in Colorado your rental property is located—from the urban core of Denver to rural mountain towns—we provide tailored landlord insurance solutions designed for the state’s diverse markets.

💡 Pro tip: Colorado’s unique climate and property types require specialized underwriting. Working with insurers experienced in Colorado landlord insurance ensures competitive quotes and proper coverage.

Best Landlord Insurance in Colorado

When searching for landlord insurance Colorado, you have many options. The best policy balances the risks you’re willing to accept, the premium you want to pay, and the competitiveness of your rate shopping process.

We recommend a thorough landlord insurance policy for Colorado rental properties that includes property insurance, general liability insurance, business interruption insurance, and flood insurance if your property lies in a flood zone.

Partnering with an insurance agency specializing in Colorado landlord insurance—and with access to numerous carriers—ensures you get the broadest protection at the best price. Start your landlord insurance quote today with OfferMarket Insurance and see how much you can save on your Colorado rental properties.

Landlord Insurance Guidelines for Colorado DSCR Loans

Below are typical landlord insurance requirements for DSCR loans in Colorado, reflecting industry best practices for risk management:

Property Coverage

General Liability Insurance Guidelines

Business Interruption Insurance Guidelines

Coverage	Requirement
Flood Insurance	Required if property is in flood zone (with Flood Zone Determination)
AM Best Rating	A- VIII or higher
Term	1 Year
Limits	Greater of $250,000 or loan balance
Cancellation Notice	30 days
Lender’s Designation	Mortgagee