How to Insure a High-Risk Home (2023)

Finding yourself unable to get homeowners insurance can be frustrating. If an insurance company considers you or your home a high risk, it may deny your application for coverage or nonrenew your existing policy. Fortunately, there are steps you can take to maintain coverage on your home. Here’s what you need to know about getting homeowners insurance for a high-risk home.

In this article

  • High-risk homeowners insurance options
  • How homes become high risk for insurance
  • Why you should get home insurance

What are my options for high-risk homeowners insurance?

If one company considers you or your home too risky to insure, your best next steps are to shop around with other companies and contact your local Fair Access to Insurance Requirements, or FAIR, plan, if your state has one. If these measures fail, you may have to obtain a surplus lines policy to avoid being uninsured.

Why shop for high-risk insurance with multiple companies?

Obtaining and comparing quotes from multiple home insurance companies is a great way to find the insurer whose services align with your needs.

Each insurance company evaluates your rate factors a little differently. Some are more willing than others to insure homes in areas with extreme weather, wildland fire risks or high crime rates. Some are more accepting of customers with prior insurance claims.

(Video) High Risk Homeowners Insurance

Just because one insurance company considers you too risky, it does not mean that every other company will feel the same way.

Whether you shop online, by phone or in person, quotes are free and usually only take about 10 to 15 minutes to prepare.

If you’re not sure where to begin, consider asking neighbors about their insurance providers. If you live in a high-risk area, this will help you find companies willing to insure homes with risks similar to your own.

It also often helps to work directly with an agent, rather than trying to do it yourself online. A licensed insurance agent can answer your questions and talk you through options that you may not otherwise know about.

FAIR plans and other state resources

More than 30 states and the District of Columbia have FAIR plans, which provide homeowners insurance to those unable to obtain it in the open market.

Though the eligibility guidelines and coverage options vary by state, FAIR plans typically provide the bare necessities of home insurance, and not much else. For example, they often lack the personal property and liability coverages included in standard homeowners insurance, and FAIR plans typically also protect against fewer perils.

However, if you’re in a pinch, a FAIR plan may provide the minimum protection you need for a year or two. If you can avoid claims, this may be all the time you need to begin qualifying for coverage from standard homeowners insurance companies.

(Video) How to Get Cheap High Risk Homeowners Insurance

Whether your state has a FAIR plan or not, you can also contact your state’s insurance commissioner for assistance. Your insurance commissioner’s office can often help you find additional local insurance resources and field your complaint if you believe you received your high-risk insurance designation in error.

When to consider a surplus lines policy

If you or your home are too risky for your state’s FAIR plan, you may have to consider a surplus lines insurance policy. Surplus lines providers tend to cover risks that standard insurance companies won’t accept, including unique older homes and homes in extremely high-risk settings.

In general, surplus lines tend to come with higher premiums and deductibles than standard insurance. Surplus-lines providers are also generally not subject to as much state oversight as mainstream insurance companies.

What makes a home high risk for insurance?

An insurance company may classify your home as high risk and either nonrenew your existing policy or deny your application for new coverage for a variety of reasons, including some that are beyond your control.

The most common reasons homes are declared high risk include:

  • A homeowner filing multiple insurance claims within a short amount of time
  • Multiple recent home insurance claims for a single location, regardless of ownership
  • A home’s exposure to extreme weather, wildland fire or crime
  • Poor maintenance and upkeep, such as roof deterioration or unsafe electrical, plumbing or heating
  • Use of home for purposes other than full-time residence, such as a vacation home

Excessive claims are a particularly common cause for high-risk home insurance designations.

(Video) Insurance For High Risk Homes

If you file one claim, your home insurance company is likely to increase your future rates in the form of a surcharge. A second claim within two or three years may get your policy nonrenewed, which is an insurance company's decision to stop insuring you when your current policy term expires.

If you need to insure a home you plan to buy, a claim filed by your future home’s current or prior owner may also impact your insurability and rates.

Most insurance companies report claims to the Comprehensive Loss Underwriting Exchange (CLUE), an industry database powered by LexisNexis.

When you request a quote, insurance companies usually pull a CLUE report that contains data about any prior claims you may have filed. If you’re applying for insurance on a home you plan to buy, the CLUE report will also pull claims data for your potential new property.

Even if you’ve never filed a homeowners insurance claim yourself, you may get dinged with a higher rate or have your application denied if the property's current owners have filed too many recent claims.

Similarly, if you are purchasing a home in a high-risk area, an insurance company may charge a high rate or deny your application, even if you have no prior insurance claims.

How can I avoid high-risk insurance?

The best ways to avoid high-risk home insurance include refraining from filing claims for inexpensive losses and researching the insurability of a home you’d like to buy as soon as possible.

(Video) Alternatives to the FAIR Plan- High Risk Home Insurance from Homeinsurancealternatives.com !

Filing two $1,000 home insurance claims within a two-year period is often more likely to get your homeowners insurance non-renewed than filing one $5,000 claim over five years.

Though it may take a bite out of your wallet, covering small claims out of your own pocket is likely to save you money in the long run by helping you avoid surcharges and nonrenewal. To save money now, consider increasing your deductible to the highest amount you can reasonably afford.

Meanwhile, when you start to get serious about putting an offer on a home you’d like to buy, start researching its insurance history. You can’t access the seller’s CLUE report, but you can ask their real estate agent to obtain a copy of it for you.

As an alternative, you can obtain a quote for a future insurance policy on the home. If a licensed insurance agent runs the quote for you, they can usually tell if the property’s claims history or locational risks may make it difficult to insure.

If the property does have recent claims activity, ask the seller to provide documentation of any repairs, including receipts and inspection certifications. This information may help you qualify for coverage or get a lower rate by showing your insurance company that the home's prior damage has been fixed.

Do I have to get homeowners insurance?

There is no state law that requires you to carry homeowners insurance, but lenders typically require it for mortgages, with specified amounts of coverage.

Since lenders are typically also listed as loss payees on insurance policies, they are informed of policy changes. If your policy is canceled or lapses, a lender will typically obtain a replacement policy through a process known as forced placement. Force-placed policies tend to cost more than those you can buy yourself and often only offer limited coverage.

(Video) We Insure High Risk Homes

Even if you don’t have a mortgage, homeowners insurance can be an economical way to protect your financial investment in your home.

However, when you own your home outright, you can get as little insurance as you please, or none at all. Just be mindful that, if you don't have insurance, the costs of a potential mishap or disaster can devastate your finances.

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FAQs

What are high risk items in home insurance? ›

Many high-risk items, such as phones, laptops and jewellery, are those you carry around. This cover is known as “personal possessions” and we'll ask you if you want to add the cover when getting a quote through Compare the Market.

Can I insure my parents house? ›

If you've ever wondered whether you can insure your parents, the simple answer is no – you can't for a variety of reasons. One such reason is that our application process requires that the person being insured completes the application themselves.

What is classed as a high value item? ›

A high value item is:

Any rare or unusual collectible articles. Audio visual, photographic or sporting equipment. Computers, laptops, tablets and notebooks. Jewellery, watches or pearls.

What can void your home insurance? ›

What can invalidate my home insurance?
  • Leaving your house unoccupied for longer than your home insurance policy allows.
  • Not making necessary repairs.
  • Failing to secure your home, for example by leaving doors and windows unlocked.
  • Giving inaccurate information when taking out your policy.
30 Aug 2019

Can you insure something for more than it is worth? ›

In a word, yes, you can insure your house for more than it's worth.

Does home insurance cover theft outside the home? ›

Home contents insurance covers you against loss, theft or damage to your personal and home possessions. It can also cover you if you take items out of the home, on holiday, for example. The insurance covers your own possessions and those of close family members living with you.

Is a house still insured if the owner dies? ›

A home is typically still insured for around 30 days after the owner dies, though the exact time frame varies by company. During this time, you'll need to reach out to the home insurance company to let them know the policyholder died and ask what your options are to continue coverage on the home.

Does home insurance have to be in name of owner? ›

Benefits of taking out a joint home insurance policy

While adding a joint policyholder is not compulsory on home insurance, without it the other person would not be able to make a claim or cancel the policy. However someone could typically change and discuss the policy if they have permission from the policy holder.

Can I insure property I dont own? ›

No, you typically can't insure a house you don't own. Insurance companies verify that you have an insurable interest in a property, which typically means you own the home. If you have a good, unique reason to insure a house that is not in your name, you'll need to consult an agent or insurer directly.

Can I get insurance for a single item? ›

An Assetsure arranged policy can cover a single item such as a ring or pendant. The policy we arrange can cover a single item such as an engagement ring against loss. You can add other items of jewellery if required and throughout the term of the policy as and when required.

What is a single item limit? ›

What is a single item limit? A single item limit – sometimes called a single article limit – is the maximum you can claim on your contents insurance for any one item that's damaged or stolen.

What is a valuable in insurance? ›

With our home insurance, we define valuables as jewellery, watches, furs, items made of gold, silver and other precious metals, pictures and other works of art, stamp, coin and medal collections.

Can you have 2 home insurance policies at the same time? ›

It is not illegal to buy more than one insurance policy for your home, but doing so is unlikely to increase the amount you collect in a settlement. Insurers report claims to the Comprehensive Loss Underwriting Exchange.

Will insurance pay if door is unlocked? ›

Key points. Your home insurance will be invalid if: You give dishonest information about your home and situation when you buy the cover. Your home isn't secure, with doors and windows left unlocked.

Does leaving window open invalidate insurance? ›

Leaving windows opened or unlocked

If there is no evidence of forced entry into your home, your insurer has every right to refuse to pay your claim.

What is the 80% rule in homeowners insurance? ›

Without having at least 80% of the replacement cost of your home insured, your insurance company may only pay the difference between 80% of the replacement cost of your home and the amount of coverage you purchased.

How do I insure a large purchase? ›

One good way to insure jewelry or other valuable items is to purchase a scheduled personal property endorsement. This add-on policy is available from most insurance companies, and it allows for an increase to the personal property coverage limit for specific items, like a fine art collection or firearm.

Is homeowners insurance based on appraised value? ›

While your home's purchase appraisal will affect your home insurance rates—since home insurance premiums are based on the value of your home —these appraisals are different from homeowners insurance appraisals.

Does homeowners cover stolen cash? ›

Home insurance covers you if you have cash stolen, but it'll only cover you up to a certain amount, usually $200-$300. It's a good idea to protect your hard-earned money from theft of cash by keeping it secure and in a fireproof location.

What does homeowners insurance cover and not cover? ›

Most standard homeowners policies include repairs or replacement due to storm damage, fire, wind, or other causes included in your policy. Things like age, neglect, or wear and tear are not typically covered. Shrubs and plantings are similarly covered.

What does cover away from home mean? ›

Usually an add-on to your Home Insurance Contents cover, 'Cover away from your home' can protect your much-loved items against loss or damage when they are outside of your home. The policy extra is usually split into two sections - Personal Possessions and Specified Items.

What happens if your spouse dies and you are not on the mortgage? ›

When real estate is not held jointly, and someone dies, it must generally pass through their estate. If the deceased had a will, the will would dictate the distribution of their estate to beneficiaries (presumably your mother, in your father's case).

Does homeowners insurance cover death of spouse? ›

Does home insurance get automatically transferred to a beneficiary when someone dies? The insurance will be transferred to a live-in spouse as they would typically be listed on the policy as well.

What happens when the policyholder dies? ›

If the owner of the car insurance policy dies, what happens to the policy? A surviving spouse or executor of the deceased driver's estate will inherit the policy. This step will require documentation in the form of a death certificate and/or probate form/executor of estate documents.

Can I get homeowners insurance if the mortgage is not in my name? ›

Getting a home insurance policy is a smart idea but home insurance has to be in the name of the owner. Most insurance companies require anyone getting an insurance policy to have insurable interest on the property.

Can two people have insurance on the same property? ›

Can one home insurance policy cover more than one home? Unfortunately, the answer is no. Because each home is unique, you'll need a policy that is crafted for each specific building. Each home has variables that influence the level of risk involved, so each of your homes will need its own policy.

Can I add my girlfriend to my homeowners insurance? ›

Is my boyfriend/girlfriend covered by my home insurance? No. Not unless you are both listed on the deed, or unless you purchase an endorsement for Other Members coverage (see below). Otherwise, this person would not have property coverage or personal liability coverage.

Can a tenant have building insurance? ›

Tenant home insurance Vs.

Broader home insurance policies can combine building insurance and contents insurance, however, building insurance is the responsibility of the landlord and not the tenant. Your personal belongings, on the other hand, are your own responsibility to cover for damage, loss or theft.

What is the difference between Bailees coverage and personal property of others? ›

The main difference is that bailees coverage generally provides property-in-transit and off-premises coverage that is not available on the Building and Personal Property Coverage Form.

Who insures a leased asset? ›

In most asset finance agreements, responsibility for insuring leased equipment falls to the lessee to take care of it.

Does homeowners cover TV damage? ›

Most home insurance policies will pay out for damage to home entertainment equipment like televisions or stereos.

Is it worth getting accidental damage cover on home insurance? ›

Accidental damage cover is an optional extra you can add to your home insurance policy. You may prefer to cover the cost of any accidents or breakages yourself. However, if you can't do that, it's worth considering the benefits.

Are glasses covered by home insurance? ›

Cover for spectacles as part of your home contents insurance

HomeProtect contents insurance policies cover your glasses and prescription sunglasses for damage and theft from within your home as standard.

What is the maximum an insurer will pay out for any one claim for unspecified contents Ireland? ›

This optional extra will cover you in case personal effects are lost, damaged or stolen outside of your home. We can provide compensation for items of up to a maximum value of €1,000.

What does single article mean? ›

Single article means that which is regarded by common understanding as a separate unit exclusive of any accessories, extra parts, etc., and that which is capable of being sold as an independent unit or as a common unit of measure, a regular billing or other obligation.

What is valuables inner limit? ›

Many policyholders are also caught out by 'inner limits', which restrict the sum insured for any one item. Most policies also limit the total sum insured for all valuables (usually defined as cameras, watches, jewellery, computers etc.).

What is considered a high value item? ›

So what exactly does “high value” mean? Most moving companies will tell you any item that is worth $100 per pound or more would be considered high value. Some companies use “high value” to refer to anything over $1000.

What is umbrella insurance used for? ›

What is umbrella insurance? Umbrella insurance is extra insurance that provides protection beyond existing limits and coverages of other policies. Umbrella insurance can provide coverage for injuries, property damage, certain lawsuits, and personal liability situations.

What is LV home plus insurance? ›

✓ Loss or damage caused by things like fire, flood, theft and. subsidence to your buildings (unlimited rebuild) ✓ Full accidental damage cover. ✓ Alternative accommodation - if your home is damaged and cannot. be lived in (£100,000)

What can void your home insurance? ›

What can invalidate my home insurance?
  • Leaving your house unoccupied for longer than your home insurance policy allows.
  • Not making necessary repairs.
  • Failing to secure your home, for example by leaving doors and windows unlocked.
  • Giving inaccurate information when taking out your policy.
30 Aug 2019

What happens if you have overlapping insurance policies? ›

When overlapping coverage does exist, double recovery is not allowed. However the policyholder can demand full coverage from just one insurance company. The insurer who pays can then, in turn, demand contribution from the second insurance company. Courts will share the costs between the two.

Can a person purchase more than one policy to cover the same risk explain? ›

It's generally illegal and considered fraud, to purchase multiple insurance policies in efforts to enrich oneself; formally defined as 'unjust enrichment. ' Insureds cannot profit from a loss, thus, a carrier will never payout more than the amount of loss.

Can you be refused home insurance? ›

What Makes a House Uninsurable? Insurance providers want to ensure they're not taking on too much risk by insuring your property. If the insurer determines the risk is too great, they may reject your application for insurance coverage or cancel your current policy.

Does it matter whose name is on house insurance? ›

Homeowners insurance is there to protect the property and your wallet from facing serious damage after a covered incident. However, for this policy to even be effective, the policy must have the name of the current owners, whether it is yours or your children's.

Should you leave your key in the door? ›

Safe Practice

Don't leave keys on the inside of door locks or window ledges near the door as burglars can break a window and reach inside and unlock the door. Remove keys from view and keep them in a safe place. Don't leave your name and address on any key tags.

Is your home insurance void if you post on social media? ›

What insurers say. All said using social media to post holiday photos while you are away won't affect your insurance.

What can void contents insurance? ›

Surprising things which can invalidate your home insurance
  • Keeping quiet about an accident. ...
  • Installing pet doors. ...
  • Over-exaggerating the value of items. ...
  • Dodgy locks. ...
  • Not updating us when something changes. ...
  • Sharing holiday selfies. ...
  • Using your home for business. ...
  • Having building work done.
6 Feb 2022

Should I lock my windows at night? ›

When it comes to security, the single most important thing you can do to protect your home is lock your windows and doors. They should be locked when you're in bed, when you're not in the house and perhaps even when you're not going to be in the room for a while.

What is a single item limit? ›

What is a single item limit? A single item limit – sometimes called a single article limit – is the maximum you can claim on your contents insurance for any one item that's damaged or stolen.

What is personal possessions cover on home insurance? ›

What is personal possessions insurance? Personal possessions insurance covers your personal belongings against loss, damage, or theft when you take them outside your home. The items covered can differ from policy to policy, and you will sometimes need to specify what you want to protect.

Can I get insurance for a single item? ›

An Assetsure arranged policy can cover a single item such as a ring or pendant. The policy we arrange can cover a single item such as an engagement ring against loss. You can add other items of jewellery if required and throughout the term of the policy as and when required.

What is a valuable item in insurance? ›

When insurers talk about 'valuables', they are generally talking about things like: works of art. jewellery. stamp, coin and medal collections. collections of gold, silver or other precious metals.

What is the maximum an insurer will pay out for any one claim for unspecified contents Ireland? ›

This optional extra will cover you in case personal effects are lost, damaged or stolen outside of your home. We can provide compensation for items of up to a maximum value of €1,000.

What does single article mean? ›

Single article means that which is regarded by common understanding as a separate unit exclusive of any accessories, extra parts, etc., and that which is capable of being sold as an independent unit or as a common unit of measure, a regular billing or other obligation.

What is the difference between contents and personal possessions? ›

The main difference between contents insurance and personal possessions cover is that personal possessions insurance covers items that you take outside the home. Contents insurance, on the other hand, is for items that get damaged, lost or stolen from inside the house itself.

What is the difference between contents and personal property? ›

Personal property coverage protects the contents of a home, and is part of a homeowners, renters, or condo insurance policy. Contents coverage has special limits on high-value items. Personal property insurance, also known as contents insurance, covers your belongings if they're damaged, destroyed, or stolen.

Can I claim for lost glasses on house insurance? ›

Yes, the policy covers you for theft of your glasses from the home. If they were stolen away from the home, you can claim for this if you had included the value of the glasses in your General possessions cover when you bought the policy.

Does homeowners cover TV damage? ›

Most home insurance policies will pay out for damage to home entertainment equipment like televisions or stereos.

What is an inner limit in insurance? ›

Many policyholders are also caught out by 'inner limits', which restrict the sum insured for any one item. Most policies also limit the total sum insured for all valuables (usually defined as cameras, watches, jewellery, computers etc.).

Is it worth getting accidental damage cover on home insurance? ›

Accidental damage cover is an optional extra you can add to your home insurance policy. You may prefer to cover the cost of any accidents or breakages yourself. However, if you can't do that, it's worth considering the benefits.

Videos

1. Alternatives to the FAIR Plan- High Risk Home Insurance from Homeinsurancealternatives.com !
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2. Homeowners Living In High-Risk Fire-Danger Areas Are Facing An Insurance Crisis
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3. Home Owners Insurance In High Fire Risk Areas 7/23/19
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4. Cheap High-Risk Insurance : Basic Insurance Advice
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