High-risk insurance is not limited only to those who are in constant exposure to danger. High-risk insurance may also be applied to homes.
How can a home be qualified for high-risk insurance? A home is eligible for high-risk home insurance if its owner is denied standard homeowners insurance.
High-risk homes are homes which are located in areas where the crime rate is high. Homes that are located in places where heavy storms are frequent may also be considered high-risk homes. Another factor that can make your home fall under the high-risk category is failure to pay insurance premiums.
Reasons For Opting For A High-Risk Home Insurance
There are several reasons why homeowners opt for high-risk home insurance.
Cancellation Of Home Insurance
One reason why homeowners get high-risk home insurance is that their home insurance got canceled after inspection. Another reason for the cancellation of home insurance is failure to pay its premium. This is the most common reason for the cancellation of home insurance. Non-payment will show on a homeowners record, making it possible so an owner cannot get homeowners insurance anymore. In this case, a homeowner will be denied home insurance.
An insurer may no longer provide a homeowner with coverage because of multiple claims on the homeowners insurance policy.
A Vacant Home
This refers to homes whose owners have moved out with no intention of coming back. Vacant homes also refer to newly built homes whose owners have not moved in yet. A homeowner will no longer be qualified for coverage under the regular policy if the home has been vacant for a certain amount of time set out by an insurer.
Wanting To Insure A Rental Property
A homeowner has moved out of his main residence and has rented out the property. This will make him want to insure his rental property.
Multiple Mortgages On the Home
Another reason why homeowners are denied insurance under a regular policy is when they carry multiple mortgages.
Fair Access Insurance Requirements Programs
Fair Access Insurance Requirements (FAIR) programs were created to help homeowners with high-risk homes find insurance for their homes. Most states with high-peril areas have Fair programs. FAIR programs are subsidized by private insurers and taxpayers. Multiple sources unite to carry the risk of your home insurance.
In FAIR programs, it is not just one company that handles high-risk home insurance. Several companies are responsible for the claims of a homeowner in cases where an insured high-risk home is hit by disaster or peril. The FAIR plan is the last resort of every homeowner with high-risk homes.
Also read: California FAIR Plan
What To Do If You Have A High-Risk Home
As mentioned, the FAIR plan is the last resort of every high-risk homeowner. There are several things a homeowner can try out first before deciding to go for the FAIR plan.
Talking to a homeowners insurance company is one way to have your high-risk home insured. Offering them with a higher deductible will reduce the risk of the insurance company. This means you will not be filing for a claim unless a severe and costly disaster happens.
Make some disaster prevention measures to your home to make it attractive to insurers. You can also bundle up your home with your car insurance. If you have car insurance with a reputable insurance company, you are most likely to get insurance for your high-risk home.
Finding An Agent
Finding an insurance agent to help you get high-risk home insurance is another way. These are the right people who you should ask for help. Insurance agents are very resourceful and will usually have a network of companies that will be able to take your high-risk home.
These insurance agents can tell you where to go or who to approach to get insurance for your high-risk home. They know a lot of people and are familiar with insurance companies.
Ask Your Neighbor
If you are not comfortable talking to insurance agents, then probably you can try your neighbors. Go out and familiarize yourself with your neighbors. You can talk to them and inquire about their home insurance. Ask them which company their homes are insured with and probably you can also consider trying out these insurance companies.
If they give you several insurance companies, then you can do research on these companies first and see which one suits you and agrees to insure your high-risk home.
Tips On How To Reduce Your Premium
There are several ways which you can do to help lower your high-risk home insurance premium. Below are some tips on how to do it.
If you are in an area where criminality is frequent or the crime rate is high, you can reduce your premium by installing security alarm systems in your home. In areas which are frequently hit by storms and other natural calamities and disasters, your insurance premium may be lowered if you improve the foundation of your home. Doing much-needed repairs and maintenance on your home may do the trick.
Another effective way to lower your insurance premium is by raising your deductible. Generally, this is the easiest and most effective way if your home is classified as high-risk. Be sure to know that raising your deductible means paying a higher amount upfront before your insurer steps in when you make a claim so it’s essential that your deductible amount is affordable for you.
Other Reasons Why A Home May Be Classified As High-Risk
Aside from high criminality rate and disaster-prone areas, there are other reasons why a home may be classified as high risk. A home may fall under the classification of high risk if your current insurance company refuses to renew your home insurance. In other words, you are denied insurance by your insurer.
The reason for this may be because of the age and condition of your house. Just like any properties which deteriorate through time, your home may also have some damages needing repairs which can contribute to the lowering of its value. That is why it is important to be religious in maintaining and repairing your home so its age will not show.