What are examples of commonly covered and not covered homeowners insurance situations?

Complete Guide to Covered and Not Covered Homeowners Insurance Situations

Why This Question Matters for Colorado and Utah Residents

With average homeowners premiums reaching $3,320 annually in Colorado—35% above the national average—understanding exactly what your policy covers (and what it doesn’t) is crucial. Both states face unique risks, like hail, wildfire, and flood, and regional exclusions or claims trends can dramatically affect your protection and costs. Recent legislation in Colorado (HB23-1174) has also changed notification requirements and extended replacement cost coverage, making knowledge even more relevant.

• Elevated Risk Environment: Colorado ranks second in the nation for wildfire and hail claims, while both states see increased frequency of property losses.
• Significant Premium Differences: Annual premiums range from $2,646 in Fort Collins to $3,855 in Boulder, with Utah markets like Salt Lake City sitting closer to national averages but rising quickly.
• Gaps Can Be Costly: Standard policies exclude floods, earthquakes, and certain types of water damage—risks that are real in our region.

What Most People Get Wrong

A common misconception is that homeowners insurance is “all-risk” or covers any kind of disaster—this simply isn’t true, especially in Colorado and Utah.

Many residents are surprised to find out their policy excludes flood and earthquake damage or denies claims for gradual issues like slow leaks, wear-and-tear, or code upgrades after a loss. Even ordinary hail coverage can vary by carrier and roof type.

The Complete Picture

Generally covered situations include sudden, unexpected events: fire, theft, vandalism, lightning, hail, windstorms, and some types of water damage (like a burst pipe). In Colorado and Utah, hail and wildfire—leading causes of costly regional claims—are usually covered, but higher deductibles or specific exclusions may apply in high-risk zip codes. Loss of use (temporary housing), liability, and personal property are also protected up to your policy limits.

Not covered are events like flooding (requires separate NFIP or private flood insurance), earthquakes (can be added with an endorsement), gradual wear-and-tear, mold from long-term leaks, and maintenance issues. Ordinance or law upgrades aren’t always included unless you add specific coverage. In high-claim regions, certain older roof types may trigger coverage reductions or exclusions.

With climate hazards on the rise and average rebuilding costs increasing up to 35% in recent years, reviewing exclusions and considering supplemental policies or endorsements is essential to avoid costly surprises.

Making the Right Decision for Colorado and Utah Residents

Question 1: What perils does your policy specifically cover—and where are the gaps?

Don’t assume all risks are covered. Review your policy’s “perils insured against” and exclusion sections closely:

• Is hail included—at what deductible?
• Does your policy explicitly exclude flood or earthquake?
• Are code upgrades and extended replacement costs covered (especially post-HB23-1174 in Colorado)?

Question 2: Are you at higher risk for region-specific hazards?

Evaluate your location for wildfire, floodplain, or hail exposure. For example, homes west of Fort Collins or in Colorado Springs foothills face extreme wildfire risk; Salt Lake City neighborhoods near creeks may see seasonal flooding.

• If in a floodplain, plan on a separate flood policy.
• Consider an earthquake endorsement if your home sits near the Wasatch Fault.
• For hail-prone roofs, invest in impact-resistant shingles and confirm your coverage tier.

Question 3: Do you have the right endorsements and the ability to absorb excluded losses?

Ask yourself if you could afford out-of-pocket costs for repairs not covered by standard insurance. For higher-value belongings, water backup, or ordinance and law coverage, add endorsements. With premiums up over 50% in some areas, review your deductible and ensure you’re not underinsured for today’s construction costs. It’s better to add protection now than face a five-figure setback later.