Winter storms, tornadoes, wildfires, floods, and earthquakes are all common natural disasters in Colorado
. Your homeowners insurance policy should cover damage from fire, lightning, wind, and hail—but you’ll need supplementary coverage for flooding and earthquakes. The Insurance Information Institute (III) found in 2016 that 29% of Americans incorrectly believed that earthquake damages were covered by their standard home insurance policy. Another 28% wrongly believed that flood damage caused by storms will be covered.
In this article, auto and home insurance
comparison app Jerry
covers everything you need to know about natural disasters and home insurance in colorful Colorado. What is homeowners insurance—and what does it cover?
A homeowners insurance policy covers damage to your home and its contents, as well as loss of use coverage, liability coverage, and medical payments coverage for visitors injured on your property. Policies can vary in terms of both perils covered and levels of coverage.
Levels of homeowners insurance coverage
HO-1: The most basic type of homeowners insurance policy, HO-1 only covers your primary dwelling—not personal property, loss of use, or liability. This coverage level will only cover a limited number of named perils such as fire, lightning, hail, and volcanic eruptions.
HO-2: This is another type of named perils policy, and it covers damage to your home plus personal property caused by the perils listed in your policy.
HO-3: This policy includes coverage for the main structure, additional structures (such as greenhouses and sheds), personal property, loss of use, liability, and medical payments. An HO-3 policy is the most common type of homeowners insurance.
Also known as all-risk coverage, HO-3 is an open perils policy that covers any perils to your personal dwelling except those listed as specifically not covered. However, personal property coverage only covers named perils.
HO-5: This is the triple crown of home insurance policies. In an HO-5 policy, you get open perils policies for your home and personal property—but you’ll be paying top dollar for this coverage.
Are you having trouble wrapping your head around all of this? Let’s take a look at a simple breakdown.
| | |
|---|
| | |
| Main structure, personal property, loss of use, liability, medical payments | |
| Main structure, personal property, loss of use, liability, medical expenses | Main structure—open perils, personal property—listed perils only |
| Main structure, personal property, loss of use, liability, medical payments | |
What perils are covered by homeowners insurance?
You need to understand what perils are named in your policy if you have an HO-1, HO-2, or HO-3 homeowners insurance policy. You can normally expect to find coverage for the following 16 named perils—however you still should read the fine print on your policy.
Damage caused by vehicles
Damage caused by aircraft
Theft or malicious mischief
Falling objects (not usually covered by HO-1)
Weight of snow, ice, or sleet (not usually covered by HO-1)
Water overflow or discharge from plumbing (not traditionally covered by HO-1)
Water heater cracking (not usually covered by HO-1)
Damage from electrical current (not usually covered by HO-1)
Frozen pipes (not usually covered by HO-1)
Notice what is missing from this list. Floods and earthquakes are two of the most common natural disasters in Colorado (and the US), and homeowners insurance cannot cover them.
The state of Colorado averages over three declared natural disasters each year. You need to understand precisely what your policy covers—and doesn’t cover—because most homeowners insurance policies don’t cover all-natural disasters.
Key Takeaway Your homeowners insurance coverage depends on your policy type and the specific perils listed on your policy.
Does home insurance cover natural disasters in Colorado?
Colorado has experienced 83 major disasters between 1953 and 2019. According to FEMA, wildfires and floods were the most common disasters. Other frequent disasters include severe storms, tornadoes, earthquakes, and droughts.
Colorado is a reasonably dry state, and hot, windy summers create the perfect conditions for wildfires. Burn scars don’t absorb water well, so when rainstorms come, flashfloods are triggered.
Let’s look at some of Colorado’s most common natural disasters and see what is covered—and what isn’t.
Wildfires
Drought conditions across the state, paired with high winds, make the perfect conditions for wildfires in Colorado. In a typical year, the state can experience 1,000 wildfires.
In Colorado, more than 200,000 properties are at risk for wildfires. While some wildfires are quickly contained, Colorado’s rugged terrain and windy conditions can make firefighting difficult. For example, the Grizzly Creek Fire that started in August 2020 burned more than 37,000 acres and wasn’t contained until December.
Homeowners insurance does cover fire damage. From the most basic HO-1 policy to an expensive HO-5 policy, every type of homeowners insurance covers some degree of fire damage.
Floods
Burn scars don’t soak up water as untouched land does. As a result, flash floods are expected when the state does receive rain. By September of 2021, 282 flash floods were recorded, smashing Colorado’s previous single-year record.
Here’s a problem: most damage associated with flooding can’t be covered by your typical homeowners insurance policy. Severe snowstorms and hail are generally considered named perils, but flooding isn’t.
If you live in a flood zone in Colorado, you should purchase a flood insurance policy separate from your home insurance. Most people buy their flood insurance coverage through the National Flood Insurance Program (NFIP)
, or you can purchase flood insurance through private companies. Earthquakes
Earthquakes are pretty common in Colorado—tectonic activity built all those gorgeous mountains, after all. The Centennial State has more than 90 potentially active fault lines. Over 700 earthquakes with a magnitude of 2.5 have been recorded since 1867.
While most of Colorado’s earthquakes have been minor tremors, the Colorado Geological Survey warns that bigger quakes (magnitude 6.5 or higher) have occurred in the state’s history and could happen in the future.
If you do want coverage for earthquakes, you’ll need to purchase a separate policy. Earthquake damage is not covered by your homeowners insurance.
Winter storms
Colorado is well known for its ski towns and mountain culture, which can only be supported with lots and lots of snow each winter. If you live in Colorado, you know that severe winter weather is to be expected. As such, you need to make sure your policy covers winter disasters.
Your homeowners insurance policy should cover things like damage caused by the weight of snow and ice on your roof, frozen pipes, and the water damage that can follow if pipes burst.
Tornadoes
Depsite being famous for its mountains to the west, Colorado ranks 9th in the US for tornado activity. The Eastern Plains of Colorado see an average of 47 tornadoes each year between May and July. Over 40% of Colorado’s population lives along its Front Range counties—right in the path of Colorado’s Tornado Alley.
Does homeowners insurance cover tornado damage?: Although tornadoes are not a separately named peril, most policies cover damage caused by wind, hail, and lightning. If a tornado hits your area, your homeowners insurance will likely cover you.
Key Takeaway Your homeowners insurance should cover claims associated with tornadoes, fires, and winter storms, but you may need additional coverage for hurricanes, earthquakes, and sinkholes.
How to file a home insurance claim
Whether you live in Julesburg or Cortez, your homeowners insurance should cover at least some of the many natural disasters Coloradans face. If your home or personal property are damaged in a natural disaster, here’s what you’ll need to do to file a claim:
Document your losses. Take photographs and make an inventory of damaged possessions.
Inform your insurance company that you want to submit a claim. They’ll assign an adjuster to review the evidence.
Determine how much you paid for each item (keeping receipts, especially for big-ticket purchases, can help with this!).
Fill out the claim paperwork your insurer provides.
Meet with the adjuster to go over the damage. Be thorough—you don’t want to miss out on money because you skipped a room on your tour.
Get repair estimates from local contractors to help you negotiate a fair settlement.
Collect your funds and set to work rebuilding your home.
You can avoid scrambling to figure out what’s covered during an emergency if you take the time to study the terms in our home insurance policy beforehand. Filing a claim will run smoother if you already know what information you need and the steps you need to take.
How to save money on car insurance
In 2016, a study from the Insurance Information Institute
found that only 17% of homeowners compared quotes online before renewing their policy. Statistically, this suggests that over 80% of homeowners may be overpaying for home insurance. Don’t sign for a policy with shopping first! Download the Jerry
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