The HO-3 Special Form is the most common homeowners insurance policy in Colorado and for good reason. It offers broader protection than older policy types and is better suited for the weather risks Colorado homeowners face every year. If you own a home here, the HO-3 is typically what lenders expect and what most insurance carriers recommend. Understanding how this policy works can help you make smarter decisions about protecting your home and everything in it.

How HO-3 Insurance Works in Colorado

• How the HO-3 Policy Works
• Why the HO-3 Is Popular in Colorado
• Where an HO-3 Is Especially Important in Colorado
• How Much Does an HO-3 Cost in Colorado?
• Get a HO-3 Policy Quote Today

How the HO-3 Policy Works

The HO-3 offers strong protection because it covers your home and other structures on an open perils basis. In plain terms, your home is protected against most types of damage unless the policy specifically excludes it. This is especially important in Colorado, where hailstorms, high winds, wildfire smoke, and sudden freezes can all impact a home in different ways. Starting with open perils coverage helps reduce gray areas during claims and provides more confidence when severe weather hits.

Personal belongings are covered differently. Personal property is insured on a named perils basis, meaning coverage applies only to the specific causes of loss listed in the policy. These include common Colorado risks like fire, smoke, wind, hail, theft, vandalism, sudden freezing, and water damage from plumbing systems. If personal items are damaged by something that is not on that list, coverage may not apply.

An HO-3 policy also includes loss of use coverage, which helps pay for temporary housing and additional living expenses if your home becomes uninhabitable after a covered loss. This can be especially helpful after large hail events or wildfire evacuations that are not uncommon in parts of Colorado. The policy also provides personal liability coverage if you are responsible for injuries or property damage to others, along with medical payments coverage to help cover smaller medical expenses if a guest is injured on your property.

Why the HO-3 Is Popular in Colorado

Colorado homeowners face a wide range of weather and environmental risks. Wildfires affect foothill and Front Range communities. Severe hailstorms are common across the Denver metro area and Northern Colorado. Strong winds impact the plains. Rapid freeze and thaw cycles put extra stress on roofs siding and foundations. These events rarely happen on their own. A single storm can involve wind hail and water damage. Wildfires can also lead to smoke damage evacuations and secondary losses. When damage has more than one cause insurance claims can become more complicated.

The HO-3 is better suited for these situations because it covers the home on an open perils basis. Coverage generally applies unless the policy specifically excludes the cause of loss. Homeowners do not have to prove that a single named peril caused the damage. This structure helps reduce claim disputes and provides more confidence during stressful claim situations.

The HO-3 also works well with coverage options many Colorado homeowners rely on. Extended replacement cost helps offset rising labor and material prices after large hailstorms or wildfire events. Ordinance or law coverage helps pay for required upgrades when homes must be rebuilt to current building codes. Matching materials endorsements can help repairs look consistent when older materials are no longer available. These protections matter most in areas with high rebuilding demand where costs can rise quickly.

Where an HO-3 Is Especially Important in Colorado

While the HO-3 is a strong choice for homeowners across the state, it becomes even more important in certain parts of Colorado where weather and wildfire risks are higher. In these areas, broader dwelling coverage can make a meaningful difference when losses are complex or severe.

• Foothill communities west of Denver such as Morrison, Evergreen, Genesee, and Conifer face elevated wildfire risk due to surrounding vegetation and steep terrain. Homes in these areas are also more exposed to wind events and winter weather. Open perils coverage helps reduce claim disputes when damage involves multiple causes.
• Colorado Springs west side neighborhoods including Mountain Shadows, Peregrine, and Broadmoor have a well-documented history of wildfire activity. These areas often require broader coverage options and policy add-ons to meet lender and carrier requirements. An HO-3 provides a more reliable foundation in high-risk zones.
• Northern Colorado cities like Fort Collins, Loveland, and Windsor experience frequent hailstorms that can damage roofs siding and exterior features. Hail losses are not always straightforward and may involve wind or water intrusion as well. Open perils coverage for the dwelling is a major advantage in these situations.
• Southern Front Range communities such as Pueblo West and Canon City see a mix of strong winds severe thunderstorms and wildfire exposure. Homes in these areas benefit from broader coverage that can respond to different types of weather damage throughout the year.

Homeowners in these regions benefit from the broader protection an HO-3 provides. Its open perils structure helps reduce claim disputes when damage has more than one cause. This gives homeowners more consistency and peace of mind in areas where wildfires hail and severe weather are part of everyday risk.

How Much Does an HO-3 Cost in Colorado?

HO-3 policies generally cost more than HO-1 or HO-2 policies because they provide broader protection and handle claims more smoothly. In Colorado, pricing can vary widely based on where the home is located and how it is built. Factors such as wildfire exposure, hail history, roof age, construction type, and overall home size all play a role in determining the final premium.

On a statewide level, many Colorado homeowners with an HO-3 policy fall within the following general ranges:

• Statewide average: A typical HO-3 policy in Colorado often falls between $2,500 and $4,500 per year for an average-sized home with standard construction and a newer roof.
• Higher-risk areas: Homes located in wildfire-prone foothill communities or areas with frequent severe hail may see annual premiums closer to $4,000 to $6,500 or higher, especially for larger homes or properties with older roofs.
• Lower-risk locations: Homes in lower-risk plains communities or dense urban areas with limited wildfire exposure may fall closer to $2,000 to $3,200 per year, depending on construction type and roof condition.

Home size also has a meaningful impact on cost. Smaller homes with lower replacement values often fall toward the lower end of these ranges. Larger homes or custom builds tend to land higher due to increased rebuild costs and higher coverage limits.

These estimates reflect current market conditions and are intentionally conservative. Colorado remains one of the more expensive states for homeowners insurance due to severe weather risks and rising construction costs. An HO-3 policy helps address these challenges by providing broader and more dependable protection when it matters most.

Get a HO-3 Policy Quote Today

The HO-3 is the preferred homeowners policy for Colorado residents because it provides flexible, dependable protection in a challenging insurance environment. Its combination of open perils dwelling coverage, named perils personal property coverage, liability protection, and loss of use benefits makes it well suited for the risks Colorado homeowners face.

If you want help reviewing your current homeowners policy or comparing HO-3 options, Castle Rock Insurance can guide you through everything in clear terms. Contact us for a free quote today!