The state of Colorado does not require that, as a homeowner, you carry homeowners insurance. While this may be true, most mortgage companies will require that you carry homeowners insurance on your home at least for the duration of your mortgage. With that being said, the actual requirements of how much homeowners insurance you will need to carry will vary from one lender to the next, so it is recommended that you speak to your lender prior to purchasing homeowners insurance in Colorado.
Aside from lender’s requiring your home have insurance, you may want to have insurance on your own just because. These types of policies are generally known as an actual cash value policy. Market conditions will not cause this type of policy premium to fluctuate since the premium that you will pay will be based on how much you purchase your home for (minus the value of the land it is built on) so they are generally cheaper policies. The problem with this is that if you were to lose your home, you may not get a large enough settlement to get a similar home.
There is also a policy known as replacement value. These are obviously more expensive than the actual cash value since these policies will pay for the total replacement of a home regardless of what was paid for it initially and regardless of how much the home’s value has depreciated since initial purchase. The settlement you receive to replace your home will be the value of the home at the time of loss rather than at the time of purchase. This is a much better policy in the long run.