High Risk Homeowners Insurance and a Hard Market

High risk homeowner’s insurance is not something most homeowners ever expect to need. Insurance agencies can and will refuse to renew your insurance if they decide you are high risk. There are a few reasons your home could find itself in the high risk category. The condition and age of your home and claims history can cause your insurance company to drop your policy. Living in a flood plain or on an earthquake fault could also put you in need of high risk insurance. If you live in an area prone to catastrophic losses or even high crime area, you could be at risk of being dropped or non-renewed. Knowing why you could be dropped is important but knowing what to do when it happens is vital.

If you are dropped from your insurance company for any reason other than that they have stopped writing policies in your area, you are entitled to a CLUE report. A CLUE report, or Comprehensive Loss Underwriting Exchange, is a detailed list of all homeowners insurance claims you have ever made. In most situations an agent with the right resources can still find an affordable, quality homeowners policy in almost any situation. If you fail to qualify with any other company because they consider you high risk, you may need to begin looking at FAIR Plan homeowner’s insurance.

FAIR Plan, or Fair Access Insurance Requirements, insurance is available in certain states to those who are considered high risk to insurance companies. It can be more expensive and often provides less coverage, but for those who cannot qualify elsewhere, it is the only option. Many states require consumers to have a sufficient number of declinations in order to qualify for a FAIR Plan policy and most of them even advise consumers that the best course of action is to find a policy in the private market.

High Risk Homeowners Insurance Tips

There are, however, ways to lower your premium. For example, if you are in a high crime area and are dropped for that reason, you can possibly get a lower premium by adding a home security system. In coastal areas many insurance companies will give large discounts for wind mitigation. Raising your deductible is generally a good way to lower your homeowners premium and is often a good option if you have been classified as high risk.

Every homeowner should have insurance to protect their home. High risk insurance can be more expensive but the cost of the insurance is far less than the repair and loss of the home and contents.