Do You Need Landlord Insurance in Colorado? A Complete Guide for Rental Owners

Colorado offers incredible opportunities for real estate investors, from booming short-term rental markets in Denver and Colorado Springs to long-term appreciation in resort towns like Breckenridge or Boulder. But owning rental property here also means preparing for wildfires, snowstorms, property damage, and the unique risks that come with hosting guests. That’s where landlord insurance comes in.

Whether you own a long-term rental, a vacation home on Airbnb, or a multifamily property, landlord insurance protects your cash flow, property, and legal exposure in a state known for extreme weather and active STR markets. In this guide, we’ll break down what landlord insurance covers, how much it costs in Colorado, what short-term rental hosts need to know, and how to strategically protect your investment without overpaying for coverage.

What is landlord insurance?

Landlord insurance, sometimes called rental property insurance, is a specialized policy that protects property owners who rent out their homes or units. Unlike standard homeowners insurance, landlord insurance assumes you aren’t living in the property full-time and instead need coverage for tenant-related risks.

What landlord insurance covers

• Dwelling coverage: Repairs or rebuilds your property after fire, wind, hail, or other covered damage
• Loss of rental income: Covers lost income if your unit becomes uninhabitable due to a covered event
• Liability protection: Covers legal fees or damages if someone is injured on your property
• Optional add-ons: Coverage for vandalism, STR guest damage, appliances, or legal expenses

Landlord insurance doesn’t typically cover tenants’ personal property, they’ll need renter’s insurance for that, nor does it include coverage for wear and tear, infestations, or maintenance failures.

Why landlord insurance is essential in Colorado

Risk	Common Impact	Covered?
Wildfires (Boulder, Summit County)	Smoke or fire damage to the property	Yes
Frozen pipes (Denver winters)	Water damage or flooding	Yes, if sudden and accidental
STR guest damages	Furniture destruction or intentional damage	Only if STR rider is added
Tenant slip and fall	Medical costs or lawsuits	Yes, under liability coverage
Tenant theft	Missing appliances, fixtures, or materials	No (unless extended coverage is added)

Colorado landlords face unique risks that make insurance especially important. Between wildfires in mountain areas, hail storms on the Front Range, and liability concerns from STR guests, insurance isn’t just a checkbox, it’s a critical asset protection tool.

How much does landlord insurance cost in Colorado?

Landlord insurance in Colorado typically costs between $1,200 and $2,800 per year, depending on your property’s location, type, and how it’s used. Short-term rentals usually fall on the higher end due to higher guest turnover and increased liability risks.

Comparing two Colorado properties: long-term vs STR

Case 1 – Aurora long-term rental:

Steve owns a 3-bedroom single-family home in Aurora that he rents to a long-term tenant on a 12-month lease. The property has no pool or fireplace and is professionally managed. His landlord insurance policy costs him $1,275 per year and includes dwelling coverage up to $250,000, liability coverage of $300,000, and $25,000 in loss of rental income protection. His risk profile is low, and he hasn’t filed any claims in the last five years.

Case 2 – Boulder STR luxury home:

Susan operates a high-end Airbnb in Boulder with designer furnishings, a hot tub, and mountain views. She hosts around 20 nights per month, year-round. Because of the short-term rental use and higher rebuild cost of the custom home, her STR-specific landlord policy comes with a much higher premium: $3,100 annually. The policy includes $500,000 in dwelling coverage, $1 million in liability, and a $10,000 vandalism rider for guest-related damage. Her insurer also requires her to have a guest agreement and install security cameras at entrances.

That’s a spread of nearly $1,825 per year, a reminder that rental strategy and property type play a huge role in your insurance costs. Understanding these variables can help you choose the right level of protection without overspending. Premiums can vary significantly depending on whether the home is owner-occupied, how often it’s rented, and the insurer’s risk modeling for Colorado wildfire or weather exposure.

What about short-term rental insurance?

Operating a short-term rental (STR) in Colorado, whether through Airbnb, VRBO, or similar platforms, introduces unique risks that standard homeowners or landlord insurance policies often do not cover. To ensure comprehensive protection, STR owners should consider specialized insurance policies tailored to the nuances of short-term rentals.

Essential Insurance Coverages for STR Hosts

Specialized STR insurance policies are designed to address the specific risks associated with short-term rentals. Key coverages include:

Coverage Type	Description
Guest Liability Coverage	Protects against guest injuries, amenity-related incidents (e.g. hot tubs or pools), and property damage caused by short-term renters.
Loss of Income Coverage	Reimburses lost rental income if the property becomes uninhabitable due to a covered peril, such as fire or water damage.
Pet and Animal Liability	Protects against claims arising from pet-related incidents, regardless of whether pets are permitted on the property.
Bed Bug and Pest Coverage	Addresses costs associated with infestations, including extermination and lost income due to canceled bookings.
Squatter Protection	Assists with legal expenses and lost income if a guest refuses to vacate the property.
Off-Premises Liability	Extends coverage to incidents occurring off the property but related to provided amenities, such as bicycles or kayaks.

It’s important to note that platforms like Airbnb offer programs such as AirCover, which provide some level of protection. However, these are not substitutes for comprehensive insurance policies and may have limitations in coverage and claim processing.

Local Insurance Requirements and Regulations

In Colorado, insurance requirements for short-term rentals (STRs) vary by city or county. Here are examples from select cities:

Denver: Hosts must carry a minimum of $1 million in liability insurance covering the property as a short-term rental. Alternatively, they can list exclusively on platforms that provide equivalent coverage. Proof of insurance is required during the licensing process.

Colorado Springs: A minimum of $500,000 in liability insurance is mandated. Hosts can either provide proof of this coverage or demonstrate that their chosen platform offers equivalent protection.

Lafayette: Insurance requirements are specified under Section 55-68(f) of the city’s regulations. Hosts must ensure compliance with these provisions.

Boulder: Short-term rentals must be the owner’s principal residence. Hosts are required to obtain a short-term rental license and submit an annual affidavit to certify principal residency. While specific insurance requirements aren’t detailed, maintaining appropriate liability coverage is advisable.

Fort Collins: The city recognizes both primary (owner-occupied) and non-primary (not owner-occupied) STRs. Hosts must provide proof of personal liability coverage, typically through homeowner’s insurance, as part of the licensing process.

Summit County: All short-term vacation rental properties in unincorporated areas must receive an STR license prior to advertising or operation. While specific insurance coverage amounts aren’t specified, hosts are expected to address neighborhood impacts and life safety issues, implying the need for appropriate insurance coverage.

Given the variability in local regulations, it’s crucial for STR owners to consult their municipality’s current requirements to ensure full compliance and avoid penalties.

Comparing landlord insurance options in Colorado

Not all landlord insurance policies are created equal, especially in Colorado, where short-term rentals introduce added complexity. Depending on how you use your property, you’ll want to choose a policy that matches your level of exposure, guest turnover, and income dependency. Here’s a quick comparison of the most common policy types for Colorado landlords, including estimated premium ranges and whether STR coverage is included.

Policy Type	Best For	Typical Premium	Includes STR?
Basic Landlord Insurance	Long-term tenants only	$1,200–$1,600	No
Landlord + STR Rider	Airbnb or VRBO hosts	$1,600–$2,400	Yes (with limits)
Commercial STR Insurance	Full-time vacation rentals	$2,500–$3,500	Yes (full coverage)

Can you deduct landlord insurance on your taxes?

Many STR hosts also deduct:

• Maintenance and cleaning expenses
• Property taxes and HOA fees
• Depreciation on the property structure
• Management or booking platform fees

How to choose the right policy (and save money doing it)

Choosing landlord insurance in Colorado isn’t just about checking boxes, it’s about tailoring protection to your rental strategy and avoiding overpriced policies that don’t actually serve your needs. Whether you’re managing a long-term lease or hosting on Airbnb, the right policy should reflect how you use the property, the risks you’re exposed to, and your financial goals.

Must-have features for STR and long-term rental owners

Before you compare premiums, make sure your policy includes the essentials:

• STR-specific coverage: If you host short-term guests, ensure your policy explicitly allows STR use. Without it, claims related to guest injuries or damage could be denied.
• Sufficient rebuild value: Don’t just insure the market value, insure for full replacement cost, especially in high-construction-cost areas like Boulder, Aspen, or Summit County.
• Loss of rental income protection: If your property becomes uninhabitable due to fire, storm, or water damage, this coverage keeps cash flow stable while repairs are made.
• Strong liability limits: Aim for at least $500,000, or $1 million if you host guests regularly or have high-risk amenities like a hot tub or pool.
• Amenity coverage: If you provide recreational features like bikes, kayaks, fire pits, or trampolines, make sure they’re covered under general liability or add-on riders.
• Vandalism or squatter protection: STR hosts are especially vulnerable to intentional damage or unauthorized occupancy. Specialized STR policies often include these protections automatically.

Smart ways to lower your premium

While coverage matters, cost does too, especially if you’re managing multiple units or high-season properties. Here are practical strategies to reduce your annual premium without sacrificing protection:

Strategy	How It Helps Lower Costs
Raise your deductible	Increasing from $500 to $2,000 can reduce your premium by $250–$500 annually, depending on your insurer’s risk modeling.
Bundle policies	Combining landlord, auto, umbrella, or homeowners coverage can earn you multi-policy discounts of 5%–15%.
Install safety features	Devices like smoke detectors, CO alarms, leak sensors, or smart locks lower your risk profile and often qualify for premium reductions.
Request STR-specific quotes upfront	Being transparent about short-term rental use ensures proper coverage; hiding it can void claims and cost more in the long run.
Shop around annually	Insurance pricing changes yearly, requoting can help you find better rates for the same coverage, especially if your risk profile improves.
Work with an experienced broker	Brokers like Proper, Steadily, and Obie understand STR risk and regulation, helping you find tailored, cost-effective protection.

Final thoughts: Protect your Colorado rental the smart way

Whether you’re managing a long-term rental in Aurora or a luxury ski condo in Vail, landlord insurance isn’t a luxury, it’s a necessity. In Colorado, the risks of property damage, liability, and STR-specific challenges are too high to go uncovered.

Choose a policy that reflects how you actually use your property. If you rent short-term, get the appropriate rider or commercial coverage. If you rely on income, don’t skip the loss of rental income protection. And always update your policy when your occupancy model changes, whether you’re going from guests to long-term tenants or vice versa.

With the right landlord insurance, you can focus on growing your rental business, not worrying about the next hailstorm, guest mishap, or unexpected lawsuit.

FAQ

Do I need landlord insurance if my property is vacant?

Landlord insurance generally does not cover properties left vacant for extended periods, typically more than 30 to 60 days. If your property is temporarily unoccupied between tenants or during the off-season, you may need to purchase a vacancy endorsement or a separate vacant property policy. This ensures you’re protected from common risks like vandalism, fire, or weather damage while the unit sits empty.

Can landlord insurance cover legal fees in tenant disputes?

Yes, many landlord insurance policies include liability coverage that can help with legal defense costs if a tenant sues you for injury or property damage. However, disputes over lease violations, evictions, or unpaid rent usually aren’t covered unless you add specific legal protection or rent guarantee insurance. It’s important to clarify the scope of legal fee coverage with your insurer.

Does landlord insurance cover appliances and furnishings?

Standard landlord insurance may offer limited coverage for appliances and furnishings you provide, such as a stove, refrigerator, or couch in a furnished rental. However, these items are usually only protected if damaged by a covered peril (like fire or water damage). To ensure full protection, especially for STRs with high-end décor, consider adding a contents coverage rider or a commercial policy.