Homeowners Insurance For High Risk Homes

Updated October 16, 2023
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Homeowners Insurance For High Risk Homes

Homeowner's insurance is a necessity for homeowners. No one wants to be caught in the middle of a catastrophe without the means of repair. Fortunately, homeowners insurance provides owners with the help they need when disaster strikes.

Some homes are not eligible for standard homeowners insurance. For those homes, high-risk insurance is available. High-risk insurance is for homes that have been denied that standard insurance.

These homes are located in areas that are considered high-risk, such as those with high crime rates or that have drastic weather conditions. A standard home can fall into a high-risk category if the owner has not paid their insurance premium on their home insurance.

Should You Choose High-Risk Homeowners Insurance?

If you are unable to buy standard homeowners insurance, purchasing high risk insurance is a great option. Here are some reasons that you should get high-risk homeowners insurance.

Your standard homeowners insurance is cancelled

Sometimes a homeowner has standard insurance that gets cancelled. Cancellation is typically due to the owner failing to pay their premium, but sometimes it happens after an inspection in which the inspector determines that the property is in a high-risk area.

You have many claims on a policy

If a homeowner makes multiple claims on their policy, the insurer may choose to no longer provide insurance on the property.

Your home is empty

A home can only remain vacant for the amount of time determined by the insurance policy. If you move out of your home and do not plan on returning, or if your home is a new build and you have not moved in yet, the home is considered vacant. Owning a vacant home is a good reason to purchase high-risk homeowners insurance.

You don’t live in your home and want to rent it out

If you have a property that you want to use as a rental instead of live in yourself, you will want to make sure it is insured, and will need to have high-risk insurance.

You have more than one mortgage on the home

People with multiple mortgages on their home are often denied standard home insurance but can purchase high-risk insurance in order to ensure coverage.

You are denied insurance due to the age and condition of the home

Every home ages and has wear and tear. Some homes that are not kept up over the years end up looking pretty run down and deteriorated. Often insurance companies will not renew coverage or will just get denied altogether if the home seems to be falling apart.

What is a Fair Access Insurance Requirement Program?

It’s important for all homeowners to have access to homeowners insurance. In order to ensure that homeowners with high-risk homes are able to obtain homeowners insurance, Fair Access Insurance Requirement (FAIR) programs were developed.

These programs are subsidized by taxpayers and private insurers, and allow a number of companies to come together in order to hold the risk of a high-risk home. Instead of having home insurance through one company, when you have high-risk insurance, there are many companies that take responsibility for your claim if your home is struck by some sort of catastrophe.

What Should I Do if I Have a High-Risk Home?

The FAIR programs are important for homeowners who have exhausted every other option. If you have a high-risk home, you will want to consider the FAIR program only after you have taken these other steps.

Negotiate with insurance companies

Having a high-risk home doesn’t mean you won’t be able to get insurance. Present some ideas to insurance companies, with possibilities such as a higher-deductible that reduces the company’s risk. You can also spruce up your home with upgrades and measures for disaster prevention.

Talk to an agent

An insurance agent might be able to help you find a company that will provide you insurance for your high-risk home. They typically have connections with a large network of insurance companies and will know the best places you can turn to ask for insurance.

Talk to your neighbors

You can get some good recommendations from your neighbors. The bonus is that their insurance companies already have interests in your area, and may be more willing to work with you. If you’re in a high-risk area, then the companies your neighbors use might be willing to work with more high-risk homes.

Can I Reduce my High-Risk Home insurance Premium?

If you have insurance on a high-risk home, you likely have a high premium. But you don’t need to worry. It is definitely possible to reduce your premium.

For homes in high-risk areas due to a high crime rate, security systems are a plus. If you install a security system in your home, your premium should lower. Some areas are high-risk due to frequent storms and other natural disasters. If you are in one of those areas, perform repairs and maintenance to improve the foundation of your home. This added protection will usually reduce your premium.

You can also lower your premium if you increase your deductible. Just be aware that doing so will mean you have to pay higher upfront costs when you make a claim.

Insurance for High-Risk Homes

Buying a high-risk home doesn’t mean that you’re on your own. You have a number of options that will help you to get the coverage you need to take care of your home and give you peace of mind. Just be aware of the options that are out there and take it one step at a time. You’ll find the coverage you need.

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