06/05/2026
HOW TO REDUCE YOUR RENTAL PROPERTY INSURANCE COSTS
By Marc Cunningham - May 27, 2026
Many Colorado rental property owners have experienced major increases in property insurance costs over the last several years. These increases are becoming one of the most significant operating challenges facing real estate investors in Colorado today.
Recent feedback from one of Grace Property Management's long-term real estate investors highlighted the issue clearly. After decades of owning rental properties, this owner reported that several Colorado landlord insurance policies were terminated after the carrier exited the dwelling fire insurance market entirely. Replacement quotes varied significantly in coverage, deductibles, and pricing, with many premiums nearly doubling or tripling compared to prior years.
This is not an isolated issue. Insurance costs across Colorado continue to rise sharply, particularly for rental property owners.
KEY POINTS
Colorado property insurance costs have increased dramatically in recent years
Many landlords are seeing policies canceled, reduced coverage options, and significantly higher premiums
Rising reconstruction costs, hail claims, and litigation expenses are driving insurance increases across Colorado
Rental property owners should review deductibles, coverage levels, consider self insuring, and obtain multiple insurance quotes to reduce their costs
WHY INSURANCE COSTS ARE INCREASING
Colorado property insurance premiums increased approximately 18% in 2025 alone, following several prior years of substantial increases. Colorado now ranks among the highest-cost states in the country for property insurance.
Several factors are contributing to these increases:
1. Frequent hail and weather-related claims throughout Colorado
2. Rising reconstruction and material costs
3. Higher costs for major systems such as furnaces and water heaters due to updated efficiency requirements
4. Increased litigation and liability exposure
5. Higher insurance costs for HOAs, which also impacts condo and townhome owners
General liability insurance has also increased significantly. Property owners and property management companies alike are reporting substantial year-over-year premium increases due to higher legal risk and litigation costs in Colorado.
STRATEGIES RENTAL PROPERTY OWNERS SHOULD CONSIDER
1. Increase Deductibles
2. One option investors are considering is substantially increasing deductibles to reduce premium costs. Higher deductibles may help offset some of the dramatic year-over-year premium increases.
3. Reevaluate Coverage Levels
4. Some owners are reassessing whether they need extensive supplemental coverage beyond catastrophic events. Optional coverages such as smaller loss protections, broken windows, or similar endorsements can significantly increase premiums.
5. Self Insure as Much as is Reasonable
6. Some investors are exploring partial self-insurance strategies, particularly for smaller losses. This approach requires maintaining adequate reserve funds so repairs or unexpected expenses can be covered directly if needed.
Recommended Agents
Given how much policies and pricing now vary between carriers, obtaining multiple quotes has become increasingly important. Coverage terms, deductibles, and pricing structures can differ substantially from one insurance provider to another.
FINAL THOUGHTS
For Colorado rental property owners, rising insurance costs have become a major operational and investment consideration. While pricing pressures may not improve in the near future, proactively reviewing policies, evaluating coverage options, and reassessing risk tolerance can help investors better manage this growing expense.
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