Boulder Homeowners Insurance | Boulder Real Estate

Boulder Homeowners Insurance: Rising Costs, Key Factors & Savings Tips

Contributing Expert: Robert D. Erben, Agent/Owner – Robert Erben Insurance Agency, Inc.

Wildfires burning west of Boulder County in October 2020, along with the Marshall Fire shortly thereafter, underscore the rising climate risks affecting home insurance costs. Boulder homeowners are facing a “new normal” of skyrocketing insurance premiums. In Colorado overall, home insurance costs have surged, with premiums jumping nearly 58% from 2018 to 2023 on average. Colorado is now among the most expensive states for homeowners insurance, with an average annual premium around $4,000 for a $300,000 policy, compared to about $2,300 to $2,600 nationally.

Currently, Boulder ranks as having the 4th highest homeowner rate in the U.S. Most Boulder County residents have felt these increases first-hand: in a recent local survey, half saw their premiums double, and a few nearly tripled over the past year. Rather than raise rates, many insurance companies have completely left the state, citing non-profitability as the primary reason. Alarmingly, some homeowners in high-risk areas have even had their policies non-renewed or dropped by insurers. About 1% of Colorado homeowners are now seeing policies cancelled, a phenomenon that was once rare. Insurance experts describe a “perfect storm” of factors making this the toughest market in decades, as detailed below.

Factors Driving Boulder Premiums Up

Several key factors are contributing to rising home insurance premiums in Boulder and across Colorado:

Extreme Weather & Wildfire Risk: Colorado’s Front Range is highly exposed to natural disasters. The state has the second-highest number of hail claims and the second-most homes at risk of wildfire nationwide. Boulder County’s 2021 Marshall Fire alone caused $2 billion in damage, making it the most expensive insurance catastrophe in state history. Intense hailstorms, including one that caused $1.9 billion in losses, regularly hit the region. In fact, hail damage now accounts for 50-60% of Colorado insurance claims. These larger and more frequent weather-related claims have become commonplace, forcing insurers to readjust their rates to remain profitable rather than leave the state.
Rising Rebuilding Costs: High inflation in construction materials and labor has sharply increased the cost to repair or rebuild homes after a disaster. Insurers cite inflation, along with rising litigation costs, as major reasons for these premium hikes. Rebuilding a home in Boulder is particularly expensive given the area’s high property values, which means claims for total losses are larger. When the price of lumber, roofing, and labor rises, insurers must charge more to cover those potential claims.
Insurance Market Strains: After back-to-back years of heavy losses, many insurers have become more cautious about insuring Colorado homes. In 2022, 76% of home insurers reduced the number of new policies written in Colorado. Some companies have even pulled out of the state or certain high-risk markets entirely. In Boulder’s foothill communities, several homeowners in wildfire-prone zones have been dropped despite having no prior claims. Fewer competitors and higher risk exposure have pushed premiums higher for those who remain insured.
Home Values and Location: Boulder’s desirable location and high property values also play a role. A more expensive home costs more to insure, and some insurers now refuse to cover homes above certain thresholds. For example, several companies have stopped insuring homes worth over $1 million. Proximity to forest edges or past disaster areas can place homes in higher-risk categories, leading to additional surcharges for wildfire or flood potential.

Preparation Tips for Homeowners

While you can’t control the weather, Boulder homeowners can take steps to protect their property and potentially make it more insurable.

Wildfire Mitigation: If you live near open space or wooded areas, create defensible space around your home. Clear dry brush, trim trees away from the structure, and use fire-resistant materials for roofing, siding, and decks. For example, one Boulder homeowner plans to add metal flashing around her deck and remove a wooden fence to reduce fire-spread risk. Hardening your home against wildfire can significantly lower the chances of total loss, and upcoming Colorado rules aim to have insurers recognize these efforts in their pricing. There are also local resources, such as Wildfire Partners, to help determine the best steps to protect your home.
Hail-Resistant Upgrades: Hail is a constant threat along the Front Range. When replacing your roof or windows, choose impact-resistant materials. Some insurance companies, such as State Farm, offer premium discounts of up to 26% for certified impact-resistant roofs. The state is also proposing grant programs to help homeowners reinforce their roofs against hail.
Regular Maintenance: Stay proactive with maintenance to prevent avoidable damage. Cleaning gutters, fixing leaks, and pruning overhanging branches can reduce the likelihood of claims. A well-maintained home not only weathers storms better but also signals to insurers that you’re a lower-risk policyholder.
Review Coverage and Inventory: Review your policy annually with your agent to ensure your dwelling coverage reflects current construction costs. Keep an updated home inventory, such as photos or a video walkthrough, and store it safely. This won’t reduce your premium but will make the claims process easier and help ensure accurate reimbursement. In high-risk areas, ask your agent about endorsements or separate policies, such as flood or sewer backup coverage, to fill any gaps.

Cost Saving Strategies for Lower Premiums

Even as rates climb, homeowners can take proactive steps to manage and potentially reduce their insurance costs:

Carefully Compare Rates: If your renewal notice shows a major increase, shop around and get quotes from other insurers. A reputable insurance agent familiar with Colorado’s market can help identify better options. However, if your increase is relatively modest (under about 20–30%), staying with your current insurer may be the better choice in today’s challenging market.
Increase Your Deductible: Raising your deductible can reduce your premium, but the savings are often modest. Many insurers use percentage-based deductibles rather than flat amounts, so review your policy carefully to understand the true cost. In some cases, moving from a $1,000 to a $2,500 deductible might save less than $200 annually.
Bundle Your Policies: Consolidating your home and auto insurance can unlock multi-policy discounts. Many companies offer savings of around 20% on home coverage and 15% on auto policies. Bundling simplifies billing and can soften the impact of rising rates.
Ask About Discounts: You may qualify for discounts based on factors like security systems, fire sprinklers, claim-free histories, or recent upgrades such as roofing or plumbing improvements. Even small reductions can add up. Maintaining a strong credit history can also help, as credit-based insurance scores may still influence rates.
Keep Your Credit Score High: Similar to applying for a loan, a higher credit score can result in lower premiums. In some cases, it can even determine eligibility for coverage.
Avoid Filing Small Claims: Claims remain on record for three to five years and can lead to higher rates or policy cancellations. Always consult your local agent before filing, especially for minor issues.
Be Cautious in High-Risk Areas: In areas designated as high risk for wildfire or hail, even a small claim can result in being dropped by your insurer. Once dropped, it may be difficult to obtain new coverage. Homeowners insurance should be used for major losses, not as a maintenance plan.
Consider Location Before Buying a Home: Insurance companies use geographic “zones” to determine eligibility. Homes in restricted zones may not qualify for private coverage, leaving the state-run FAIR Plan as the only option.
Explore State Programs: Colorado’s FAIR Plan serves as an insurer of last resort for high-risk properties unable to obtain private coverage. While helpful, premiums are higher and coverage limits apply. Policies may also include cash value limitations and liability exclusions. The state is also developing a wildfire catastrophe fund and roof upgrade grants to help stabilize costs.
Surplus and High-Risk Plans: Some insurers, such as State Farm, have partnered with third-party companies to offer policies in high-risk areas. These often provide better coverage (replacement cost versus actual cash value) and more competitive rates than the FAIR Plan, allowing homeowners to remain with their trusted carrier.

How The Zach Zeldner Team Can Help

As real estate professionals, we understand that rising insurance costs can affect both buyers and sellers. One way we support our clients is by requesting the current homeowner’s insurance policy during a transaction. This helps prospective buyers understand expected costs and gives sellers the opportunity to present their home with added transparency.

Our team also connects clients with trusted local insurance partners, including Robert Erben of Robert Erben Insurance Agency, Inc., who can provide tailored insights, quotes, and guidance on coverage options. Whether you’re preparing to sell, buying a home, or simply reviewing your current coverage, we’re here to help you make informed, confident decisions.

Final Thoughts

By understanding the factors driving Boulder’s rising home insurance costs, homeowners can make informed decisions. Focus on strengthening your home against disasters, review your coverage needs carefully, and take advantage of available discounts and programs. While premiums in Colorado may remain high, thoughtful preparation and smart planning can help manage long-term costs.