Consumer Tips

How to Shop for Property Insurance

If you're struggling to find property insurance —there are steps you can take to explore options beyond the Colorado FAIR Plan.

The FAIR Plan is a last resort designed for property owners who can’t secure insurance from standard insurance companies. However, standard insurance is a better choice for most people due to more competitive rates and broader coverage options.

Here are some tips to help you find the right insurance plan for your property:

Option 1: Work with a Licensed Insurance Agent

Your insurance agent is your best resource when shopping for coverage. They have access to multiple insurance markets and can help you explore options that fit your needs.

Agents can:

  • Compare policies from various standard insurers.

  • Guide you through specialty markets like surplus lines, which often cover higher-risk properties.

  • Help you navigate changes in the insurance landscape, as availability and rates can fluctuate.

If you don’t have an agent, find a licensed professional.

Option 2: Explore Standard Insurance First

Standard insurance companies often offer a wider range of coverage options at more competitive rates than the FAIR Plan.

By exploring standard insurance, you’ll have access to:

  • Flexible policies that can be customized to meet your coverage needs.

  • Potential for lower premiums than those offered by the FAIR Plan.

Broader coverage options can include more than essential protections like fire or wind damage.

Option 4: Keep Shopping—Marketplace Conditions Change

It’s important to remember that the property insurance marketplace can change frequently. Even if you're having trouble securing coverage today, new options may become available.

Here are a few reasons to keep shopping:

  • Rising home values and inflation in labor and materials are pushing insurance rates higher, but even with increasing rates, there may be more affordable options in the marketplace.

  • Increasing risks from wildfires and hail storms may limit coverage options in certain areas, but changes in risk levels and insurer capacity can lead to new opportunities.

  • Secondary markets, such as the surplus lines market, are constantly evolving, with new companies entering the market. Although their names may be unfamiliar, they have provided comprehensive coverage.

Regularly check with your agent to see if any new options have opened up in the marketplace.

Option 3: Surplus Lines–A Backup Option

If standard insurers cannot cover your property due to its high risk, your agent may recommend exploring the surplus lines market. Surplus lines insurers specialize in covering properties that don’t meet the underwriting standards of the traditional market.

These policies:

  • Are designed for high-risk properties.

  • May offer more customized coverage options than the FAIR Plan.

  • Can sometimes be more cost-effective than FAIR coverage.

Option 5: Use the Colorado Homeowner Toolkit

The Colorado Division of Insurance’s Homeowner Toolkit is a valuable resource for understanding the property insurance market.

It provides best practices for:

  • Shopping for insurance and comparing different coverage options.

  • Understanding your risks and how they may affect your premiums.

  • Finding the right agent to help you navigate the process.

Option 6: Know When to Consider the FAIR Plan

The Colorado FAIR Plan is an important safety net, but it’s not meant to be the first choice for most property owners.

Only consider the FAIR Plan if:

  • You’ve received three declinations from standard insurers.

  • Your property is considered uninsurable due to high-risk factors like wildfire exposure, location, claim history, or age.

Remember, the FAIR Plan offers limited coverage at a higher cost than standard insurance. It is meant to ensure that no property goes uninsured, but standard insurance is generally more cost-effective and comprehensive.

Even if the FAIR Plan becomes your only option for coverage, continue working with your agent to explore any emerging opportunities in the standard market. Marketplace conditions can change, and you may find better options over time.

Need Help?

If you're unsure about your eligibility for the FAIR Plan or need assistance finding an insurance agent, contact your licensed insurance professional. For more detailed information about property insurance in Colorado, check out the Colorado Homeowner Toolkit.