Though it’s required if you have a mortgage, some homeowners can have a tough time getting insurance - even through no fault of their own. Some houses are riskier to insure, which means insurance companies may reject your application or charge a higher premium for coverage. There are certain things that can make some homes (or homeowners) more difficult to insure than others. But fear not. Even if your home is difficult to insure, there are still ways for you to find affordable coverage.
What can make your home difficult to insure, and what can you do about it?
Certain geographic locations are considered “high-risk” if they’re prone to natural disasters or crime. If you live in an area that’s highly susceptible to hurricanes, earthquakes, tornadoes, wildfires, or floods, your policy is likely to be more expensive. Some insurers will even consider a nearby body of water to be a higher risk. You’re also looking at an increased rate if you live in an area with a lot of theft, vandalism, and other crime.
For example, after Hurricane Sandy, insurance for beachfront properties in New Jersey skyrocketed. Insurers now see these homes as higher risk because of the history of destruction and location near a volatile body of water.
The best way to offset the high risk of a high-risk location is to install safety features in your home. If you live in an area prone to hurricanes, for example, you’ll want hurricane shutters and a strap on your roof. If your home is susceptible to crime, you’ll want an active security system. You can still live where you want, as long as you take the necessary precautions.
At InsuraMatch, we work with several different insurance companies that specialize in coastal risks. If you live near the water and are searching for homeowners insurance, give one of our insurance advisors a call today at (844) 824-2887.
That charming 1920s ranch isn’t as charming as it looks. Older homes are a higher risk to insurers. Aged homes often run into more issues because they require more maintenance. They also may be costlier to repair because the materials and style is out of date. Plus, they aren’t always up to modern building codes, and insurers don’t want to take the risk if you’re not at code.
You don’t have to avoid the old, quaint homes you want, though. We recommend remodeling and upgrading your home, especially key structural elements, to meet modern building codes. You can still maintain the original integrity of the house while making your home safer and less vulnerable.
After making any remodels, show documentation to your insurer to prove that your home is more structurally sound than its age may suggest. They’ll likely decrease your premium or offer a more comprehensive policy.
The condition of your home will also play a major role. Old homes aren’t high risk if they’re in tip-top shape. And new homes aren’t perfect if they’re made with hazardous or deficient construction materials.
Insurers don’t like to take a risk with homes that have foundation issues, bad plumbing, old electrical systems, or missing insulation. They’re also wary of wood stoves and other fire risks. They’ll also consider the fire rating of your roof, looking for a fire-retardant finish (especially if you have wood shakes or shingles).
If your insurer considers your home high-risk because of its condition, it’s probably high-risk for the health and safety of the inhabitants inside as well. You’ll want to address and upgrade any hazards in your home as soon as possible to keep your family safe and your homeowners’ insurance premium low.
4. Claims history
Your insurance company can see how many claims have been made on the home, even if they weren’t the insurers or you weren’t the owners. If your home has a history of a lot of claims, the insurer will presume that the house is higher risk for a claim in general. For example, if the previous homeowners all made flood claims, your insurer will assume that your home is in a flood-risk area.
Keep in mind that your personal claims history may also play a role. The more claims you’ve made in any of your homes, the higher your homeowners’ insurance premium will likely be.
There’s not much control you have over the previous history of claims on your house. However, you can ask the sellers about this before purchasing a house, so you can avoid moving into a high-risk home. If you already live there, you’ll want to look into the claims that were most often made on the home, so you can see where the risk comes from and install safety features appropriately.
Homes that aren’t lived in full-time are considered higher risk. There’s no one around to maintain the home or notice damage before it occurs. If a pipe leaks, it could wreak havoc for weeks or months before anyone would notice. If the electrical system failed, it could cause a fire in an instant.
Squatters also target vacant homes, and they can do serious damage to the house. Interestingly, if a squatter is injured while on your property, they may actually even sue you for damages!
Vacant homes tend to be second or vacation homes, which is why “second home insurance” tends to be higher. (It’s also higher because vacation homes tend to be in riskier locations, like along the beach or in the mountains. However, a home may also be considered “vacant” while going through renovations, so your premiums may increase during construction time.
You’ll rarely be denied coverage due to vacancy, but you’ll likely have higher premiums. To offset this cost, we recommend hiring a trusted local to check in on your house frequently.
You should also consider installing safety features, like smart home appliances. A smart thermostat will make sure the temperature doesn’t drop too low, putting you at risk of a burst pipe; a smart water heater will keep an eye out for leaks before they happen; a smart security system will alerts you to any movement on your property. Check out other gadgets that can help you save on homeowners insurance here.
6. Attractive nuisances
Homeowners’ insurers really dislike “attractive nuisances” like trampolines and pools. Attractive nuisances are any features that attract children and increase risk of injury and liability.
As the homeowner, you’re liable for any injuries that occur while guests are using these attractive nuisances on your property. This includes invited and unwelcome guests, so you’re responsible even if the neighborhood kids throw a pool party at your house without your knowledge.
Because attractive nuisances increase your liability and risk, home insurers will often exclude these from your policy or charge a higher premium. With a few safety features, like a locked gate or trampoline net, you can offset this risk, though. Learn how to avoid making your home’s features attractive nuisances here.
7. Other considerations
Other factors that can make it hard to get insurance include:
- Owning a dog, especially certain breeds
- Owning an exotic pet
- Working from home
- Lapses in coverage
- Insurance and credit score of homeowner
Getting home insurance for a higher-risk home
Are you struggling to insure your high-risk home?
If it’s because of the location of your home, you might want to chat with your neighbors to see how they got insurance. If it’s because of the claims on your home, ask your realtor who the previous insurer was.
Ultimately, the best way to find quality insurance for your home is to shop around with an independent agent like InsuraMatch. Our agents have tools that allow us to compare multiple insurers and plans at once, so you can find the right coverage at the right price for your home. A licensed insurance agent can help you understand your risk and steps you can take to minimize it to low costs, as well as identify discounts that may help bring down premiums that reflect high risks.
Get in touch with one of our expert insurance advisors today at (844) 824-2887 to compare quotes and see how much we can help you save on homeowners insurance.
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