Rental Property Insurance Guide for Denver Owners

Section 1: If you own a single-family rental home

The policy you need is a landlord policy (your agent may call it a dwelling fire or DP-3 policy), plus an umbrella policy on top of it. A standard homeowners policy is not built for a rental and can leave you uncovered the moment a resident moves in.

The mistake we see most often

An owner moves out, rents the home, and never calls their insurance company. Their homeowners policy is written for an owner-occupied house. Many carriers will deny or reduce a claim on a house that is being rented, because the risk they priced is not the risk they are now carrying. If you are converting the home you used to live in into a rental, call your agent before the first resident moves in and convert the policy. This is the single most important item on this page.

What a landlord policy covers

• The structure. Fire, wind, hail, lightning and other named perils, ideally at replacement cost. In Colorado, confirm how the policy handles hail and roof claims, since hail is the largest driver of claims and premiums in the Denver area.
• Other structures. Detached garages, sheds and fences.
• Landlord liability. If a resident or their guest is injured on the property and you are found responsible, this pays for legal defense, settlements and judgments up to your limit.
• Loss of rental income. If a covered loss (a fire, a burst pipe) makes the home unlivable, this replaces the rent you lose while it is repaired. This is the coverage that keeps your mortgage paid during a bad year.
• Your own property at the home. Appliances, tools and anything else you leave on site. It does not cover the resident’s belongings.

Four questions to ask your agent

1. How long does loss of rent coverage last, and is there a dollar cap? Twelve months is common. A major fire rebuild in the Denver area can run longer than that.
2. Does coverage change if the home sits vacant? Many landlord policies restrict or end coverage after 30 to 60 days of vacancy. Ask what the window is and what a vacancy endorsement costs. Tell your Executive Property Manager when you know a turn will run long.
3. Are vandalism, theft and water or sewer backup included, or do they need an endorsement? Most landlord policies are named perils policies, which means anything not listed is excluded. Sewer backup is a common Denver claim and a common exclusion.
4. What is my liability limit, and do I have an umbrella? See below.

Why we recommend an umbrella policy

An umbrella policy sits on top of your landlord policy and pays claims that exceed its liability limit. It is the coverage for the worst day: a serious injury, a dog bite, a fall on an icy walk. Our long-standing recommendation is a $2 million umbrella, and we consider $500,000 the minimum. Umbrella coverage is inexpensive relative to what it protects, and one policy can cover multiple rental properties.

What your landlord policy will not cover

• The resident’s furniture, electronics and personal belongings. That is what renters insurance is for, and it is the resident’s to buy.
• Flood and earthquake, which are separate policies.
• Wear and tear, deferred maintenance and pest damage.
• Rent lost because a resident stopped paying. That is a collections and eviction matter, which is why Grace carries an Eviction Guarantee on every lease we place.

Section 2: If you own a rental condo or townhome in an HOA

Your HOA’s master policy covers the building. It does not cover the inside of your unit, your liability, or the share of the HOA’s deductible it can bill you after a hailstorm. You need your own HO-6 policy written for a rental, with loss assessment coverage of at least $25,000 and no sublimit.

What the master policy actually covers

Every HOA carries a master policy, paid for through your dues. In most Colorado associations it covers three things:

• The building’s structure, usually from the foundation to the bare walls of your unit (sometimes called “walls in” or “bare walls” coverage, and some policies go further; your HOA’s declarations say which).
• The common areas: roofs, parking lots, pools, clubhouses, landscaping.
• The HOA’s liability for injuries in those common areas.

Many owners assume that is the end of the story. It is not. The master policy carries a deductible that has grown dramatically as hail claims have climbed. Deductibles of $25,000 per claim, or 5% of the building value for wind and hail, are now common in the Denver area. Under Colorado law (C.R.S. 38-33.3-313(6)), the association can assess that deductible to the owner whose unit caused the loss, or divide it pro rata among the owners whose units were damaged. After a large hailstorm, that can mean a bill of $10,000 to $25,000 or more arriving in your mailbox with 30 days to pay.

The four coverages you need on your own policy

Ask your agent for an HO-6 policy written for a non-owner-occupied unit (some carriers call this a landlord condo or rental condo policy). It should include:

1. Interior improvements and betterments. Everything from the drywall in: flooring, cabinets, counters, paint, fixtures, appliances. The master policy stops at the walls, and anything an owner has upgraded since the building was built is the owner’s to insure. Most HOA memos we see recommend at least $25,000 here; use the actual replacement cost of your finishes.
2. Contents, if the unit is furnished. If you provide furniture or appliances beyond what is built in, insure them. If the unit rents unfurnished, you may be able to skip this.
3. Landlord liability. Injuries to your resident or their guests inside your unit, or caused by a condition in your unit (a leak that damages the unit below is the classic example). Add an umbrella policy on top, same as a single-family owner.
4. Loss assessment coverage. This pays your share of a special or loss assessment when the HOA bills you for a master policy deductible or a shortfall. It is the coverage that matters most and the one most often written wrong.

The loss assessment fine print

This is where owners get burned. Many policies include loss assessment coverage by default, but at a $1,000 or $2,000 limit, and some add a “special limit” clause that caps the payout at that amount when the assessment comes from the master policy deductible, even if you bought a $50,000 limit. A Colorado Springs owner facing a $17,000 hail assessment in 2026 believed she had $50,000 of coverage and was offered $1,000. The Colorado Division of Insurance has logged more than 200 complaints on loss assessment disputes since 2019.

When you review your policy, confirm all five of these:

• The limit is at least $25,000. Our recommendation since 2020 and the figure most Denver HOA memos land on. Match it to your HOA’s actual deductible if that is higher.
• There is no sublimit for assessments that come from the master policy deductible. Ask the question in exactly those words.
• The coverage responds if you are the only owner assessed, not just when the whole association is.
• You know what your own deductible on the loss assessment coverage is.
• The endorsement covers the same perils as the master policy (all risk or special form), including wind and hail.

If your agent cannot confirm all five in writing, get a second quote.

Two more things to do this week

• Pull your HOA’s current insurance memo or certificate and read the deductible. Most associations send one annually or post it on the HOA portal. Forward it to your Executive Property Manager so we have it on file.
• If you have a mortgage, your lender will want proof of the master policy. The HOA’s insurance agent can issue that certificate; you will need your name as it appears on the loan, the property address and the lender’s details.

A note on townhomes

Townhome associations vary more than condo associations. Some carry a master policy that covers the full structure, some cover only common areas and expect each owner to insure their own building. Read your declarations, or ask the HOA manager which it is, before you buy a policy. If your townhome HOA does not insure the structure, you need a full landlord policy as described in Section 1, plus loss assessment coverage for the common areas.

Section 3: Why we do not require residents to carry renters insurance

We strongly recommend renters insurance to every resident, and our lease says so. We do not make it a lease requirement, because under Colorado law a requirement would give you nothing you do not already have, and your real protection is your own landlord liability and umbrella coverage.

This is the insurance question owners ask us most, usually because an out-of-state carrier or a lender has asked them to confirm that “tenants carry $100,000 of liability coverage.” Here is the honest answer.

• A renters policy belongs to the resident. In Colorado the landlord cannot compel a resident to file a claim, cannot be paid from it directly, and cannot cancel or enforce it. If a resident lets the policy lapse in month three, you would never know and could do nothing about it.
• The resident’s responsibility does not depend on it. Under Grace’s lease the resident is liable for damage they or their guests cause, insured or not. A renters policy makes it more likely they can actually pay; it does not create the obligation.
• Your protection is your own policy. A landlord liability limit you have chosen deliberately, plus an umbrella, is what stands between you and a large claim. A resident’s $100,000 policy is not a substitute, and many carriers asking for it are applying a template written for other states.
• What we do instead. Our lease (Section 11, Resident Safety and Property Loss) recommends and urges every resident to carry renters property and liability insurance, and we explain why in plain language on our Renters Insurance Guide for Residents, which every new resident receives at move-in.

If your carrier insists on a tenant insurance requirement as a condition of your policy, send the request to your Executive Property Manager. We will walk through what the carrier is actually asking for and whether a different carrier is the better answer.

Section 4: Managing the cost

Colorado property insurance premiums rose roughly 18% in 2025 on top of several years of steep increases, and some owners saw policies non-renewed as carriers pulled back from the dwelling fire market. Four things we tell owner-clients:

• Raise your deductible. You are insuring against catastrophe, not a broken window. A higher deductible with an adequate maintenance reserve is usually the better trade.
• Reassess add-ons. Small-loss endorsements raise premiums noticeably and rarely pay back.
• Self-insure small losses. Keep a reserve so you can pay for minor repairs directly and save the policy for real events. A claim history can also make a policy harder to place in the current Colorado market.
• Get at least three quotes. Coverage terms, deductibles and pricing vary widely between carriers, and the gap has grown as the Colorado market has tightened.

Two agencies some of our owner-clients use for landlord policy quotes are the Glenn Vandine Agency (303-835-9900) and Aspen Insurance Agency (303-777-2991). We do not receive anything for the referral and you should shop them against your own agent.

Who insures what, at a glance

Frequently asked questions

• I just moved out of my house and rented it through Grace. Is my homeowners policy still good?

  Probably not. Homeowners policies are written for owner-occupied homes, and many carriers will deny or reduce a claim once the home is rented. Call your agent and convert it to a landlord policy before the resident moves in. Expect to pay roughly 15% to 25% more than your homeowners premium for the same house.

• My carrier says my tenants must carry $100,000 in liability coverage. Can Grace require that?

  We can and do recommend it, in the lease and at move-in, and we do not require it, for the reasons in Section 3. A requirement would be unenforceable in practice and would not change your exposure. Send us the carrier’s request and we will help you answer it.

• Does Grace’s insurance cover my property?

  No. Grace carries its own errors and omissions and general liability coverage for our operations as the manager. It does not insure the home or the owner. Ask your agent to name Grace Property Management as an additional insured on your landlord policy; most carriers add this at no cost and it keeps a claim from stalling when the manager is named in a suit.

• My HOA already has insurance. Why do I need my own policy on a condo?

  The master policy stops at the walls of your unit, does not cover your liability inside the unit, and carries a deductible the HOA can bill to you under C.R.S. 38-33.3-313. A $25,000 hail deductible divided among the damaged units is a real bill. Loss assessment coverage is what pays it.

• How much loss assessment coverage should I carry?

  At least $25,000, with no sublimit for assessments that come from the master policy deductible. If your HOA’s deductible is higher, match it. Ask your agent to confirm in writing that the coverage responds when you are the only owner assessed.

• My rental has been vacant for two months during a turn. Am I still covered?

  Maybe not. Many landlord policies restrict or end coverage after 30 to 60 days of vacancy. Ask your carrier about a vacancy endorsement and let your Executive Property Manager know if a turn is going to run long.

• A resident stopped paying rent. Does loss of rents coverage pay me?

  No. Loss of rents covers rent lost because a covered event (fire, water damage) made the home unlivable. Non-payment is a collections and eviction matter. That is what Grace’s Eviction Guarantee is for: we prepare and serve the required notices at no cost and contribute toward legal fees under our Risk Mitigation Guarantee.

• A pipe burst and the home is unlivable. Who pays for the resident’s hotel?

  Under Colorado’s warranty of habitability (C.R.S. 38-12-503, as amended by SB24-094), the landlord must provide comparable housing or a hotel in certain situations, and Grace’s lease and displacement process follow that law. Your loss of rents coverage may offset rent during that period, and the resident’s own loss of use coverage pays for their added living costs. This is a case where both policies matter at once.

• Should I buy a home warranty instead of raising my deductible?

  No. We do not recommend home warranty companies for rentals; under current Colorado repair timelines they are a liability more than a protection. Put the premium into a maintenance reserve instead. See Should I Use a Home Warranty Company for My Rental?

• Can Grace recommend an insurance agent?

  We are not an insurance agency and do not earn referral fees. Two agencies some owner-clients use are listed in Section 4. Get at least three quotes; terms vary more than price does.

Insurance is the one part of owning a rental where the cheapest option is almost never the best one, and where the cost of being wrong shows up all at once. Spend the ten minutes with your agent. If you want a second set of eyes on your policy, your Executive Property Manager has seen hundreds of them and is happy to walk through yours.