How To Get The Best Landlord Insurance In Colorado
Landlord insurance in Colorado is just like any other landlord insurance; you don’t think you need it until you do. Or you could be one of those “think 3-4 steps ahead’ savants like Nikola Jokic, and are already actively doing your due diligence on landlord insurance. Either way, you’ve come to the right place. Landlord insurance can be a smart move, and in this guide, we’ll break down how it works in Colorado and what you need to look at before selecting a plan.
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What is landlord insurance?
Landlord insurance, occasionally 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 does landlord insurance cover?
Landlord insurance doesn’t cover absolutely everything, but it does cover a few events that could otherwise be financially crippling in some cases. It usually 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 usually doesn’t cover tenants’ personal property; they’ll need renters’ insurance for that, nor does it include coverage for wear and tear, infestations, or maintenance failures.
What does landlord insurance usually cover in Colorado?
Many people live in Colorado for the amazing natural landscape, but sometimes that rugged natural beauty comes with a price. Remember, people walking in the door from outdoor activities like skiing, can tend to cause more damage than just your average tenant in a city like Denver. Below are some of the Colorado-related mishaps that need to be reckoned with, and where landlord insurance can sometimes help.
| 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) |
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:
Let’s start with Steve, a contractor for Comcast cable who has a property in Aurora that he inherited from his grandmother a couple of years back. Steve now 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, on the other hand, is part of the upper echelon of the Boulder elite and has held numerous prestigious positions at the University of Colorado. Susan operates a high-end Airbnb in Boulder with designer furnishings, a hot tub, and mountain views, and typically 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 specific 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 Across Cities in Colorado
Just like most things in Colorado, insurance regulation is stipulated via the county or municipality. For example, Denver will be different than Aurora, which will be different from Westminster. Colorado is a big state, and below are the insurance regulations for the largest 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.
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.
Make sure you check your local municipal office’s website for changes in regards to court legislation, etc.
Comparing landlord insurance options in Colorado
So, if you’ve decided that landlord insurance is not a bad idea, which type of landlord insurance should you get? 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?
Yes, landlord insurance is a legitimate business expense for both short-term and long-term rental owners. You can deduct the full cost of your premium from your rental income on your annual tax return. If you own multiple properties, work with a CPA to categorize all expenses, including insurance, as part of your operating costs.
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 is about tailoring protection to your rental strategy. 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.
Landlord insurance in Colorado checklist for 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
If you are renting just one property located in the Foothills that you occasionally use, or you have multiple properties spread across ski resorts in Colorado that are always occupied in Winter, you need to protect your business. Insurance is the No. 1 way to diversify risk, and let’s face it, being a landlord can sometimes be risky, at least from a financial sense!
Are you looking for the best experts in Colorado to manage your property’s STR and cashflow, or an investor looking to get into the STR market and not sure where to start? Talk with us for a free consultation!
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.