Landlord Insurance in Fort Collins: What You Should Know

Fort Collins has grown from a quiet college town into one of Colorado’s most desirable places to live. For landlords, that growth means opportunity, but it also means higher stakes if something goes wrong. Located in “Hail Alley,” the city faces storms that cause hundreds of millions in property damage across the state each year. Homes near the foothills are at greater risk for wildfires, and winter freezes can turn small leaks into costly repairs overnight. While not required by law, having landlord insurance in Fort Collins is one of the smartest ways to protect your investment.

In this guide, we’ll cover the differences between landlord insurance vs. homeowners insurance, what landlord insurance costs in Fort Collins, the types of policies available, and how to file a claim. By the end, you’ll feel more confident choosing a policy that keeps your property protected, your tenants comfortable, and your personal assets safe. 

What Is Landlord Insurance?

Landlord insurance is a special type of policy built for any property you rent out to tenants. It is different from the insurance you’d buy for your own residence because it focuses on protecting your investment rather than your personal belongings. A standard Fort Collins landlord insurance policy typically includes three main areas of protection:

1. Dwelling coverage: Pays to repair or rebuild the structure of the home after a covered event like hail, wind, or fire.

2. Liability coverage: Helps cover medical bills and legal costs if someone gets injured on your property and you’re deemed responsible for the incident. 

3. Loss of rental income coverage: Reimburses you if tenants have to move out because of covered damage and stop paying rent while repairs are being made. 

Not every scenario is automatically covered, especially if you purchase only the bare minimum coverage. Most Fort Collins landlord insurance policies will have a list of exclusions for things like eviction costs, tenant belongings, mold cleanup, pest infestations, normal wear and tear, natural disasters, and damage caused intentionally or by neglect.  

If any of these exclusions worry you, you can usually add them on to your policy for an extra cost. Some of the endorsements (optional coverages) you may consider include: 

• Wildfire coverage: Helps pay for repairs or rebuilding if your property is damaged by wildfire

• Vacancy coverage: Keeps your property protected even if it sits empty for more than 30 days (or however long your policy specifies) during renovations or between tenants

• Sewer backup protection: Helps if spring runoff overwhelms your drains and causes water to flood your basement  

• Equipment breakdown coverage: Handles major system failures, like furnaces that quit in the winter or HVAC systems that shut down during the summer months

• Hailstorm coverage: Covers repairs to roofs, siding, and other damage after a hailstorm 

• Landlord belonging coverage: Protects items you own that stay with the rental, such as appliances, tools, or lawn equipment, if they’re damaged by a covered event

• Flood coverage: Pays for repairs if your property is damaged by flooding

• Crime-related coverage: Covers vandalism, theft, and other damages caused by criminal activity 

With the right combination of coverages, landlord insurance in Fort Collins can be customized to match your property’s specific risks. A good policy not only protects your investment from costly surprises but also allows you to put your energy into keeping your tenants happy and your business running smoothly. 

Comparing Landlord Insurance vs. Homeowners Insurance

If you’re a first-time landlord, you may be curious about landlord insurance vs. homeowners insurance. That curiosity is a good thing because understanding the difference now can save you money and headaches later. 

Homeowners insurance is meant for a home you live in, not one you rent out. It focuses on protecting your personal belongings, the home’s structure, and covering your living expenses if you need to move out during repairs. Fort Collins landlord insurance works differently. It’s designed for income-producing properties and focuses on the building itself, liability coverage if tenants or visitors are injured, and loss of rental income if a covered event makes the home unlivable.

Rental properties carry more risk than owner-occupied homes. For instance, tenants may not spot or report issues right away, allowing small issues to turn into major damage. Student rentals tend to have high turnover rates, and icy sidewalks create more liability. For all these reasons and more, landlord insurance costs about 25% more than homeowners insurance. That said, landlord insurance costs can often be written off as a business expense, meaning the higher price of Fort Collins landlord insurance can be partially offset at tax time.

If you want your investment protected, understanding the difference between landlord insurance vs. homeowners insurance is essential. Relying on the wrong policy can cost you thousands of dollars and cause even more stress when something goes wrong. 

Different Types of Rental Property Coverage

Not all landlord insurance in Fort Collins is the same, and knowing your options can help you align your policy with your property and budget. Most insurance plans fall into one of three categories, known as dwelling policies. The main types are DP1, DP2, and DP3, and each one offers a different level of coverage, payout method, and impact on your landlord insurance costs.

DP1 Policies

A DP1 policy (Dwelling Fire Form 1) is the most basic form of Fort Collins landlord insurance. It covers only nine “named perils,” which are specific risks listed in your policy such as fire or lightning. If it’s not named, it’s not covered. Claims are paid at actual cash value (ACV), meaning the payout is reduced for depreciation. That means if your older roof is damaged, the payout will be based on what it’s worth right now, not what it would cost to put in a brand-new one. DP1 policies usually have the lowest landlord insurance costs, but the limited coverage makes them best for cheaper rentals or places you can afford to fix yourself. 

DP2 Policies

A DP2 policy (Broad Form) gives you more protection than a DP1. It still lists the exact scenarios it will cover, but that list is much longer, usually around 18. Along with events like fire and wind damage, it often includes vandalism, burst pipes, and damage from falling trees. One major advantage is how it pays claims. Instead of actual cash value, a DP2 policy pays at replacement cost, meaning you get the full amount you need to fix or replace what was damaged without losing funds to depreciation. Many landlords go with a DP2 policy because it offers broad coverage without breaking the bank. 

DP3 Policies

A DP3 policy (Special Form) is the highest level of protection you can get for landlord insurance in Fort Collins. As an “open peril” policy, it covers nearly any type of damage or loss unless the policy specifically lists it as an exclusion. Like DP2, it pays at replacement cost, so you’ll get enough to repair or replace with new materials instead of settling for the deprecated value. DP3 policies have the highest landlord insurance costs, but they also provide the most protection. Many landlords in Fort Collins choose DP3 for high-value, historic, or fully renovated properties where repair costs can be expensive and minimizing gaps in coverage is important. 

Umbrella Insurance

Even the best Fort Collins landlord insurance policy can only stretch so far before it hits its payout ceiling. If a serious accident or lawsuit goes past that limit, the rest of the bill could land on you. Umbrella insurance adds additional liability coverage beyond what your main policy covers. That can mean the difference between a small setback and a major financial struggle. Since umbrella policies tend to be inexpensive (around $383 per year for $1 million in coverage), many landlords don’t hesitate to make the purchase. 

Limited Liability Company (LLC)

Another way to protect your rental business is to put the property under a Limited Liability Company (LLC). With an LLC, the property is owned by the company instead of you personally. If a dispute ends up in court, it’s the LLC that’s on the hook, not your personal bank account or home. Landlords with more than one property often put each one in its own LLC so that issues with one can’t affect the others. While not a replacement for landlord insurance in Fort Collins, combining an LLC with the right coverage gives you even more legal and financial protection. 

Landlord Insurance Costs in Fort Collins

Landlords in Colorado pay an average of $1,608 per year in landlord insurance costs. However, rates in Fort Collins are often higher. The city gets hit with big weather events like hailstorms and winter freezes, and homes near the foothills are more at risk for wildfires. Older houses in neighborhoods like University Acres or Old Town can also cost more to insure because repairs are usually more expensive. Here are some of the main things that can raise or lower your premium:

• Policy type: Comprehensive DP3 policies packed with endorsements cost more than a basic DP1 plan.

• Location: Fort Collins sits in “Hail Alley,” one of the most hail-prone regions in the country. Homes closer to the foothills also face a higher chance of wildfire damage. Both hazards make insurance claims more likely, which pushes premiums higher.

• Property condition: Updated roofs, plumbing, and wiring often lower premiums, while outdated systems raise them. Investing in certain renovations could help you save money in the long run. 

• Claims history: If you’ve filed insurance claims before, your rates could go up. 

• Safety features: Things like alarm systems, deadbolt locks, and fire sprinklers can help you qualify for discounts. 

• Replacement cost value: The more your home would cost to rebuild after a disaster, the higher your premium will be. Local property values can be a big factor. 

Taken together, these factors contribute to the higher-than-average landlord insurance costs in Fort Collins. Carefully weighing your policy options can help you stay within your budget while ensuring your investment has plenty of coverage. 

Filing a Fort Collins Landlord Insurance Claim the Right Way

When something goes wrong with your rental, how you handle the claim can make a big difference in how quickly repairs happen and how much you’re paid. Knowing the process ahead of time can save you time, stress, and money. Here’s what you need to do to file a Fort Collins landlord insurance claim:

1. Review your policy: Pull out your policy and refresh your memory on what’s covered, your deductible, and any fine print that could affect the claim. 

2. Document the damage: Take quality, time-stamped photos and videos of the damage from as many angles as possible. Show the more obvious damage, but also zoom in on anything that’s less noticeable. 

3. Prevent further damage: Do whatever you can to keep the damage from getting worse. Tarp the roof, shut off the water, or board the window. Just remember to keep every receipt so you can get reimbursed for those emergency fixes. 

4. Quickly notify your insurer: Your policy likely requires you to report damage within a certain amount of time. Aim to call within 24 to 48 hours, if not sooner. 

5. Submit all required documents: When it’s time to turn in the required documentation, send everything upfront to speed the process up. That includes repair estimates from licensed local contractors, inspection reports, and any police or fire department records if they apply.

6. Be present for the adjuster: When the insurance adjuster comes to inspect, walk them through the property and point out anything that might be easy to miss. Give context on what happened so they have all the details documented. 

7. Keep detailed records: Save copies of every email, letter, receipt, and contractor invoice. If there’s ever a delay, dispute, or denial, you’ll be glad you kept these.

In Colorado, insurers generally must pay, deny, or settle your claim within 30 days if filed online or 45 days if filed by mail. 

The Takeaway: Why Landlord Insurance in Fort Collins Pays Off

Fort Collins has a strong rental market, but it also comes with risks that can lead to costly insurance claims. From wildfires to hail and frozen pipes to floods, landlords here need to be prepared for just about anything. Having the right landlord insurance in Fort Collins gives you the coverage you need, but it’s only part of the equation. How you maintain your property, document repairs, and respond when issues arise all play a role in preventing damage, speeding up claims, and keeping your investment profitable.

Knowing the different policy types, understanding the differences between landlord insurance vs. homeowners insurance, and exploring options like LLCs and umbrella coverage can help you build a stronger safety net for your rental business.

If you want to go a step further, partnering with an experienced property manager can take even more off your plate. At Evernest, we not only help you keep your property in top condition and your tenants happy, but we also maintain the kind of detailed records, inspections, and maintenance history that can be invaluable when filing an insurance claim. Reach out today to make managing your Fort Collins rental easier than ever.