Colorado Extended Replacement Cost: Declarations Page
Your Colorado dwelling limit is a rebuild estimate, not what you paid, because the land is not insured. Where the rule reaches your policy, the state makes your insurer offer extended replacement cost on top, and your declarations page records in bold twelve-point type whether you took it.
Your renewal packet arrives, and the dwelling coverage on the first page reads a few hundred thousand dollars below what the house cost you. Most owners read that as a lowball, or as a clerical error worth a phone call.
The number itself explains why it is low. What decides how much you actually get is a second line, further down the same page, set in bold.
The short answer: In Colorado your dwelling limit is an estimate of what it costs to rebuild the house, not what you paid for it, because the land is not insured. What the state regulates is the layer on top: C.R.S. §10-4-110.8(6)(a)(I) requires your insurer to offer law and ordinance coverage at 20% of the dwelling limit and extended replacement cost at at least 50%, raised from 10% and 20% by HB23-1174 in 2023. It is an offer duty, not a duty to provide, so where the duty applied, whether you carry those layers is a record of your own election, and §10-4-110.8(6)(a)(II)(A) requires that election to appear on your declarations page in bold twelve-point type. Several kinds of policy sit outside the duty, so find out whether it reached yours.
Your dwelling limit was never your purchase price
That number answers a question about construction, not value. It estimates what it would take to rebuild the structure, and the lot isn't part of it, because land doesn't burn.
Dwelling limit (Coverage A)
The most the policy will pay to repair or rebuild the house itself. It is an estimate of reconstruction cost, not a market price, and it excludes the land.
Where the lot is a large share of what you paid, a limit nothing like the contract price is ordinary rather than a warning sign. Read the gap against the parcel, not the price: on the older Boulder stock this band shops, a 1955-to-1985 ranch on a generous lot, a good deal of what changed hands was dirt. Where the lot is a smaller share, the same gap is telling you about the estimate instead.
Don't shrug at it, though. If your policy carries a percentage wind and hail deductible rather than a flat dollar amount, that percentage runs against the dwelling limit, so the same number sets what you pay as well as what they pay, which is the hail arithmetic a California buyer gets wrong. That deductible is a policy form, not a legislative one.
What the legislature did write about is the layer sitting on top.
Colorado makes them offer extended replacement cost on top
The statute is §10-4-110.8(6)(a)(I). Before issuing or renewing a replacement-cost homeowner's policy whose dwelling limit is at least the estimated replacement cost of the residence, the insurer must make available to the applicant the opportunity to obtain extended replacement cost and law and ordinance coverage. Then it sets a floor: at a minimum, the insurer must offer law and ordinance coverage equal to twenty percent of the dwelling limit, and extended replacement cost of at least fifty percent.
Those percentages are recent. HB23-1174, passed after the Marshall Fire and in force since August 2023, raised law and ordinance from ten percent and extended replacement cost from twenty.
Both are defined in the statute itself, and they cover different failures. Extended replacement cost is headroom above the policy limit when rebuilding costs more than anyone estimated. Law and ordinance is the money that appears when a 1970s house has to come back to a 2026 code.
| Layer | Statutory minimum offer | What it reaches | On an $800,000 limit |
|---|---|---|---|
| Extended replacement cost | At least 50% of the dwelling limit | A designated amount above the policy limit, to rebuild under current building conditions | at least $400,000 |
| Law and ordinance | 20% of the dwelling limit | Increased costs of demolition, construction, renovation or repair from code enforcement | $160,000 |
The $800,000 is arithmetic on a round number, not a local figure; run the percentages against whatever your own page says. The law and ordinance figure is exact and the extended replacement cost figure is a floor, because the statute says twenty percent and at least fifty.
Read those two rows together and the design shows. Nobody can guarantee a reconstruction estimate is right, so the state didn't try to legislate a better estimate. It required a buffer instead. The extended replacement cost layer exists because the number underneath it can be wrong. That isn't hypothetical on this stretch of the Front Range, and the Marshall Fire's record on underinsured rebuild coverage is the local reason we keep saying so.
The same design explains why both numbers move together. The layers are percentages of the dwelling limit, so an understated Coverage A understates the headroom above it in the same proportion. The estimate underneath rests on factual inputs, among them square footage, story count, foundation type and whether a finished basement was counted as finished, and those are checkable against the house. How the estimate gets built runs under a separate rule, which this piece does not open; whether its inputs describe yours is a question for a producer with the worksheet in front of them.
And note what the statute stops short of. It obliges the insurer to offer. It obliges nobody to sell it to you, or you to buy it. So a policy without those layers isn't necessarily an oversight by your carrier. Where the duty applied, the absence is a record of a decision, and the decision was yours. Where it didn't, there may be nothing on the page to find at all. Which of those you're looking at is the last section of this piece, and it's worth reading before you pick up the phone.
Your declarations page already says whether you took them
Which is why the second half of the same statute matters more than the first. Section 10-4-110.8(6)(a)(II)(A) requires the insurer to list on the declaration page, in bold and in twelve-point type, whether a consumer purchased or rejected the additional coverages. Both ways: the line is meant to be there whether you took the coverage or turned it down.
Division of Insurance Regulation 5-1-25 supplies the exact wording for the second case. If a policyholder elects not to purchase extended replacement cost or law and ordinance coverage, this paragraph goes on the declarations page:
"You have chosen not to buy coverage available to you that would give you extra protection when you have an insured loss. This coverage includes options to increase your dwelling coverage limits, such as extended replacement cost coverage and law and ordinance coverage. To learn more about your choices, review the information included in your new or renewal policy."
The rule
Two documents answer this where the rule reached your policy. The declarations page records what you elected, in bold twelve-point type. A separate notice, sent with the new or renewal policy, gives the premium cost of whatever you declined. Whether the rule reached your policy is the last section below.
That second document carries the figure the first one is built on, and it answers the question everybody asks next. Section 5.C requires it to identify each coverage the policyholder did not elect and give the premium cost of each, naming fifty percent extended replacement cost and twenty percent law and ordinance specifically. So where the rule reached your policy and you declined, "what would it have cost me?" was already answered in writing, in a notice sent with the policy.
The rules run on their own clock: Regulation 5-1-25 reaches new policies effective, and renewal offers sent, on or after 1 January 2025. On an older policy that hasn't renewed since, don't expect the paragraph.
The declarations page is a five-minute errand. It's in the renewal packet, or in your carrier's portal. The separate notice is harder, because it arrived once, possibly a year ago, and it's often not posted online beside the dec page. Your carrier can send it again. Deciding what to do about either is a conversation for a licensed insurance producer, who can quote the layers on your house. That sits under a different licence from real-estate brokerage, and we'll stay on our side of the line.
While you're in there, two more lines are worth finding in the same packet, and both sit downstream of the dwelling limit. Other structures, personal property and loss of use are typically written as percentages of Coverage A, and loss of use, the coverage that pays for somewhere to live while the house is rebuilt, is usually capped in months as well as in dollars. A Front Range rebuild has to clear permitting and current code, and get in line for a contractor, before it starts, so running out of months while you still own a lot is a different failure from running out of dollars.
The second is how the policy pays for a roof, because hail is what this corridor produces year to year and fire is the catastrophic tail. Some otherwise replacement-cost policies settle an older roof on a depreciated basis. Loss of use and roof settlement are both questions for a producer rather than for us.
It's the errand behind advice we already give. We tell anyone listing a 1955-to-1985 Boulder house to check the rebuild coverage against current construction costs, and buyers on Loveland's west side to ask for extended replacement cost. A seller does that to protect the sale, but the limit is still theirs until closing, and the corridor's hail season doesn't pause for a listing. Colorado's answer is that you may not have to ask: where the rule reached your policy and it was written or renewed since 2025, it should already be printed.
Why yours might say nothing at all
Some policies sit outside this rule entirely, which is why a blank page isn't automatically a missing line.
The duty covers replacement-cost policies, so one written on actual cash value sits outside it. And it only attaches where the dwelling limit is at least the estimated replacement cost, so on a policy already written below that estimate the duty never attached at all. That estimate is the carrier's own figure, and it usually isn't printed on the declarations page, so this test needs a number you'd have to ask for rather than read off the page.
There's also a definition underneath all of it, and it's narrower than you'd guess. Section 10-4-110.8(3)(c) reads: "'Dwelling' means a single-family home, other than a mobile home, condominium, or manufactured home, that is used as a primary residence by the owner of the dwelling." A condominium, a manufactured or mobile home, or a house you own and don't live in, the one you kept as a rental or hold as a second home, may not be what that sentence is describing. The statute doesn't define "condominium", and we aren't going to tell you which side of that word your own place falls on. What the definition does to the duty in your case goes to your producer or the Division of Insurance, and it's worth asking before you read anything into a blank page.
Then there's the carve-out, which deserves a careful sentence rather than a confident one. Subsection (6)(a) doesn't apply to a policy that already includes certain coverages in amounts at or above the ones it specifies. HB23-1174 added inflation protection coverage to that list, and whether a policy carrying ordinary inflation guard therefore sits outside the offer duty, or whether the list's amount threshold has to be met first, is read differently by the statute and by the regulation, and it isn't ours to settle for your policy. Inflation protection coverage is the statute's own term for it, automatic adjustments against the impact of inflation, so it's worth checking whether your own policy carries it before you assume the offer duty applied to you. Which reading governs goes to your producer, or to the Division of Insurance.
The two documents are least clear about the third case: a policyholder who never answered either way. The statute describes a consumer who purchased or rejected; the regulation's paragraph is written for a policyholder who elects not to purchase; neither says what happens if you never answered at all. Section 5.C may reach further, because it is framed as a state rather than an act, describing coverage the policyholder "has not elected". That isn't ours to settle either. If the bold line is missing from your page, the questions for your carrier are narrow and they go in one call. Is this policy written on replacement cost or actual cash value? Does it carry inflation protection coverage? What is the carrier's current estimated replacement cost for the house? And did the rule reach this policy at all — if it did, was the offer made, and what does the file record as the answer?
Notice what this does and doesn't settle. Whether your limit is the right limit belongs to the reconstruction estimate, which has a paper trail of its own. The declarations page settles something narrower: whether the buffer was offered, and what you did with the offer. None of that ambiguity changes the errand: pull the page, find out whether it says purchased, rejected, or nothing at all, and take that answer to someone licensed to act on it.
If you're buying rather than renewing, you don't have a declarations page yet, and that's the better position. The duty runs before issuance as well as before renewal, so where it applies, the offer is owed when the policy is placed: you make the election on the way in instead of discovering a year later what was recorded for you. Ask for both layers to be quoted before you bind, and priced separately, so you're weighing two numbers rather than answering yes or no.
The prior question is more urgent, though: whether a carrier will write the house at all, which runs on its own clock during the contract and on the west side of the corridor can decide the deal outright, as we set out in what insurability does to a Loveland purchase.
The bottom line
A dwelling limit below your purchase price is normal where the lot is a large share of what you paid, because you didn't insure the land. The checkable question is whether you took the two layers Colorado makes your insurer offer, and on a policy the rule reached, your declarations page answers it in bold twelve-point type. Several kinds of policy sit outside the rule, so find out whether it reached yours. Do it now rather than at renewal: once there's a loss or a fire burning nearby, carriers commonly stop writing and stop increasing coverage.
True North Boulder is a real-estate team with eXp Realty. This is general information, not insurance, legal or tax advice; for your policy and your limits, talk to a licensed Colorado insurance producer; where the question is what the statute reaches, that one is for a lawyer.
Frequently asked
Why is my dwelling coverage lower than what I paid for my house?+
Because it isn't a price at all. The dwelling limit is an estimate of what it would cost to rebuild the structure, and the land is not part of it. On a lot that carried much of what you paid, a limit well below the purchase price is what the arithmetic produces, not a mistake. Whether the estimate itself is sound is a separate question, for a licensed insurance producer.
What does Colorado require my insurer to offer?+
Where the duty applies: law and ordinance coverage equal to 20% of the dwelling limit, and extended replacement cost of at least 50%. C.R.S. 10-4-110.8(6)(a)(I) sets that floor before issuing or renewing a replacement-cost policy whose dwelling limit is at least the estimated replacement cost. HB23-1174 raised those from 10% and 20% in 2023. It is a duty to offer, not a duty to provide.
Where does my policy say whether I rejected the coverage?+
On the declarations page, where the offer duty applied. C.R.S. 10-4-110.8(6)(a)(II)(A) requires the insurer to list there, in bold twelve-point type, whether a consumer purchased or rejected the additional coverages, so the line appears either way. Division of Insurance Regulation 5-1-25 sets the wording used when a policyholder declines, and its Section 5.C requires a separate notice, sent with the policy, giving the premium cost of each coverage not elected. Several kinds of policy sit outside the duty, including one written on actual cash value, one whose dwelling limit is below the estimated replacement cost, one that already carried qualifying coverage, and one not issued or renewed since the rule took effect. On those the line may not be there at all. Separately, the statute defines “dwelling” narrowly, and whether that definition reaches a condominium, a manufactured or mobile home, or a house you own and do not live in is a question for your carrier or the Division of Insurance.
Sources & notes
- The offer duty and the percentages. C.R.S. § 10-4-110.8(6)(a)(I): “Before issuance or renewal of a replacement-cost homeowner’s insurance policy whose dwelling limit is equal to or greater than the estimated replacement cost of the residence, the insurer shall make available to an applicant the opportunity to obtain extended replacement-cost coverage and law and ordinance coverage. At a minimum, the insurer shall offer law and ordinance coverage in an amount of insurance equal to twenty percent of the limit of the insurance for the dwelling and extended replacement-cost coverage in an amount of insurance that is at least fifty percent of the limit of the insurance for the dwelling. Information provided must be accompanied by an explanation of the purpose, terms, and cost of these coverages.” Read from the Colorado Revised Statutes 2026, Title 10, Office of Legislative Legal Services, 2026-09-19. Note that the provision retains both formulations: the first sentence is a duty to make available, the second a duty to offer at the stated minimums.
- That the percentages were raised, and by how much. House Bill 23-1174, as signed, section 3. Capital letters indicate new material and struck text indicates deletions, per the act’s own convention note: “the insurer shall
make-availableOFFER law and ordinance coverage in an amount of insurance equal totenTWENTY percent … and extended replacement-cost coverage in an amount of insurance that is at leasttwentyFIFTY percent”. So law and ordinance moved from 10% to 20% and extended replacement cost from 20% to 50%. On timing, the act sets no calendar date for this section: its effective-date clause carries the general rule, “at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly”, which for the 2023 regular session is 7 August 2023, and separately fixes 1 January 2025 for § 10-4-110.8(8), the reconstruction-cost subsection this piece does not rely on. ⚠ The bill’s landing page returns HTTP 406 to an automated request; the signed act PDF linked here is the copy actually read, and its approval block is a scanned signature that machine extraction does not resolve, so no signing date is asserted here. - The declarations-page notice. C.R.S. § 10-4-110.8(6)(a)(II): “No later than January 1, 2025, and as prescribed by the commissioner by rule, the insurer shall: (A) List on the declaration page of the policy, in bold and in twelve-point type, whether a consumer purchased or rejected the additional coverages listed in this subsection (6)(a); and (B) Provide the premium cost associated with the rejected additional coverages listed in this subsection (6)(a) in a separate notice with the application or renewal of the policy.” The statutory trigger is stated in the alternative and so reaches a policyholder who purchased as well as one who rejected; the regulation’s mandated paragraph, quoted in the body, is written for the decline case only.
- The mandated wording and the separate premium notice. Colorado Division of Insurance, Regulation 5-1-25 (Concerning Homeowner Coverage Disclosure Requirements), 3 CCR 702-5, §§ 5.B and 5.C. Section 5 applies “to new policies effective, and renewal offers sent on or after January 1, 2025.” Section 5.C requires, in a separate notification accompanying the new or renewal policy, “Identification and explanation of the coverage or coverages the policyholder has not elected to purchase; and … The premium costs associated with each coverage that the policyholder has not elected”, with the coverages to be identified named as “fifty percent Extended Replacement Cost and twenty percent Law and Ordinance.”
- Currency of the regulation. Read from the Colorado Secretary of State, the official publisher of the Code of Colorado Regulations. Regulation 5-1-25 was compared across three published versions of 3 CCR 702-5 — those effective 2025-03-17, 2025-12-30 and 2026-12-30 — and is textually identical in all three, at 73 lines and 5,100 characters; its own Section 9 History reads “New regulation effective July 30, 2024” in each. So it is verified unchanged through the most recently published edition. ⚠ The Division of Insurance website refuses automated requests on every path; the regulation was obtained from the Secretary of State instead. Statute mirrors carrying § 10-4-110.8 appeared in search results and were not relied on.
- The definitions. C.R.S. § 10-4-110.8(3): (3)(c) “‘Dwelling’ means a single-family home, other than a mobile home, condominium, or manufactured home, that is used as a primary residence by the owner of the dwelling.” This subsection has stood unchanged since 1 January 2014; the later amendments to subsection (3) touch the introductory portion and (3)(g), and HB23-1174 amended (6)(a) and added (3)(d.7). Note that the statute does not define “condominium”, and the word “townhome” does not appear in § 10-4-110.8; where it wants a broader reach within the same section it uses a second defined term, “owner-occupied residence” (3)(g), which is what the total-loss and wildfire provisions in (13) and (14) run on. The body describes the definition and declines to apply it to any particular property. The section’s other definitions: extended replacement cost coverage “pays a designated amount above the policy limit to replace a damaged structure if necessary under current building conditions” (3)(d); inflation protection coverage “means coverage that provides automatic adjustments of the coverage amount on the dwelling or structure being insured to protect against the impact of inflation” (3)(d.7); law and ordinance coverage “means coverage for increased costs of demolition, construction, renovation, or repair associated with the enforcement of building ordinances and laws” (3)(f).
- The carve-out, and why it is left open here. The final sentence of § 10-4-110.8(6)(a)(I): “This subsection (6)(a) does not apply to any homeowner’s insurance policy that already includes guaranteed replacement cost coverage, inflation protection coverage, extended replacement-cost coverage, or law and ordinance coverage in amounts greater than or equal to the amounts specified in this subsection (6)(a).” HB23-1174 both inserted “GUARANTEED REPLACEMENT COST COVERAGE, INFLATION PROTECTION COVERAGE” into that list and replaced “and” with “OR”, visible in the signed act. Two readings follow from the sentence itself, and its text does not choose between them. On the first, a policy that already includes any listed coverage, inflation protection among them, falls outside the offer duty. On the second, the closing qualifier, “in amounts greater than or equal to the amounts specified in this subsection (6)(a)”, governs the whole list, and inflation protection coverage has no amount specified anywhere in (6)(a) to be measured against, so carrying it would not put a policy outside the duty on that ground alone. Regulation 5-1-25 § 5.A words the same exclusion differently again, as coverage “in amounts greater than fifty-percent of the limit of the insurance for the dwelling for extended replacement cost coverage and twenty-percent … for law and ordinance coverage”, which attaches a threshold to two of the four listed coverages. The body states that the question is unsettled and declines to resolve it; which reading governs a particular policy is a question for a licensed producer or the Division.
- That the land is excluded from a replacement-cost calculation. C.R.S. § 10-4-110.8(13)(f)(I) and (II), which govern the replacement-cost calculation on a total loss, each provide that the calculation “shall not include consideration of the value of the land.” Read from the Colorado Revised Statutes 2026, Title 10, Office of Legislative Legal Services, 2026-09-19. Cited here as statutory support for the premise the body opens on; the offer duty this piece is about sits at (6)(a), not at (13).
- Percentage wind and hail deductibles are a policy-form and market practice, not a requirement of HB23-1174, § 10-4-110.8 or Regulation 5-1-25. They are mentioned only as an observation about how the same dwelling limit gets used.
- Where to take a question. Colorado Division of Insurance, homeowners insurance resources.
- Deliberately out of scope: whether any particular dwelling limit is adequate, and how a reconstruction-cost estimate is built and disclosed — the latter runs under a separate rule, Regulation 5-1-26, which implements § 10-4-110.8(8), (9.5) and (15), and is its own subject. Also out of scope: whether a carrier will write the house at all, which is linked from the body, and what a wildfire risk score notice must say and how it's appealed.
