Uninsurable Homes: What Are Your Options?

If you can't insure your house, it may be because it is considered a high-risk property. This could be due to its location in an area prone to natural disasters or high crime rates, or because it has an outdated heating system or plumbing. In such cases, you can explore alternative insurance options, such as non-standard home insurance companies or special assigned risk plans offered by states. You can also consider making repairs or upgrades to your home to improve its insurability.

If your home is considered high-risk, shop around at other companies

If your home is considered high-risk, don't panic. There are still options for insurance coverage, and it's worth shopping around at other companies. Each insurance carrier has its own underwriting guidelines, so just because one company has rejected your request for coverage, it doesn't mean that all others will do the same.

• Contact independent insurance agents or brokers: They have the expertise to find companies that offer coverage to homeowners in high-risk situations. They can help you navigate the market and find suitable providers.
• Make repairs or upgrades: If your home has been deemed high-risk due to its condition, consider making necessary repairs or upgrades to improve its insurable state. This could include fixing old plumbing, electrical systems, or an ancient heating system. By improving the condition of your home, you may be able to get an insurance company to offer you coverage.
• Reach out to your state insurance department: They can provide a list of insurers that operate in your area and may also have information about community groups or state-offered insurance plans that can help.
• Explore non-standard insurance companies: Some insurance companies cater to homeowners with non-standard insurance requirements, including those in high-risk areas. They may be more likely to offer you coverage, even if your home is considered high-risk.
• Consider HO-8 and other policy options: HO-8 policies, also known as modified form coverage, are designed for older homes or those with historic landmark status. They provide coverage similar to a typical homeowners insurance policy but include provisions addressing the aging nature of the home.
• Look into shared-market or assigned-risk plans: If you're unable to find coverage through standard insurers, most states offer special insurance plans for homes that don't qualify for the standard market. These plans are typically a last resort, as they offer limited coverage and can be costly, but they provide crucial protection for high-risk homes.

Repair or upgrade your home to make qualifying for traditional insurance easier

If your home is considered high-risk, it may be difficult to get homeowners insurance coverage. However, making repairs or upgrades to your home can help you qualify for traditional homeowners insurance. Here are some ways you can improve your chances of getting insured:

Upgrade your home's systems and security:

• Upgrade old plumbing, electrical, and heating systems to reduce the risk of fire or water damage.
• Install a home security system or smart home devices to deter crimes such as theft or vandalism.
• Improve the security of your pool area by adding a locking fence and a safety cover.

Maintain and improve your home's exterior:

• Ensure your home is easily accessible to emergency services, with well-maintained roads leading to it.
• Keep your lawn and landscaping well-maintained to show "pride of ownership."
• Consider adding impact-resistant roofing to protect against wind, snow, or hail damage.

Renovate your home's interior:

• Finish your basement or attic to increase living space, but be sure to add appropriate coverage for the new area.
• Remodel your kitchen or bathroom with quality upgrades, such as granite countertops or custom cabinets, and increase your dwelling coverage accordingly.
• If you're adding a home office, ensure you have adequate coverage for business-related assets and equipment.

Make structural improvements:

• Repair or replace your roof if it's damaged, old, or made of unacceptable materials.
• Upgrade your windows and doors to impact-resistant options for added protection against severe weather.
• Consider reinforcing your home's foundation to prevent issues like basement wall collapse during construction or renovation.

Remember to consult with a qualified professional or insurance agent to determine the specific repairs or upgrades that will help you qualify for traditional homeowners insurance.

Look into non-standard home insurance companies

If you're struggling to insure your house, it may be worth looking into non-standard home insurance companies. These companies cater to homeowners whose insurance requirements are non-standard. This could be due to the construction of the house, its location, or the owner's personal history.

For example, if your house has a thatched roof, timber framing, or a flat roof, you may need to look into non-standard insurance. Houses that are located in areas prone to damaging weather or crime, or that are empty for long periods, may also fall into this category. Additionally, if the owner has declared bankruptcy or has a history of criminal convictions, non-standard insurance may be necessary.

Non-standard home insurance covers all the risks that are not covered by standard home insurance. This could include properties that have been flooded or are in flood-risk areas, properties that are unoccupied for long periods, or criminal convictions. Subsidence is another factor that may require non-standard insurance, as most insurers will need a structural engineer's report dated within the last 12 months if the subsidence occurred less than 20 years ago.

When looking into non-standard home insurance, it's important to compare quotes from multiple companies and ask for help from insurance professionals or agents. You can also talk to your neighbours to find out which insurers they use and get recommendations.

Consider an HO-8 policy, which is designed for older homes

If your home is deemed uninsurable by standard insurance policies, you may need to consider an HO-8 policy, which is designed for older homes. An HO-8 policy is a type of homeowners insurance designed for older, historic homes that don't meet the coverage requirements of a standard home insurance policy. HO-8 policies are ideal if you don't want to make drastic renovations or upgrades to your home.

HO-8 policies cover the following:

• Dwelling coverage: This insures the physical structure of the home, including the roof, foundation, attached structures, and built-in appliances and systems.
• Other structures coverage: This protects structures on the property that are not attached to the main home, like garages and sheds.
• Personal property coverage: This insures personal property that has been damaged or stolen.
• Liability coverage: This provides financial protection by covering legal and settlement fees if someone is injured on your property or if you're found responsible for damaging someone else's property.
• Medical payments coverage: This offers coverage for minor medical expenses if a guest is injured on your property, regardless of who is at fault.
• Loss of use coverage: This insures the cost of expenses such as temporary housing if your home becomes uninhabitable due to a covered peril.

It's important to note that HO-8 policies are named peril policies, meaning they only cover specific perils listed in the policy. Additionally, HO-8 policies provide actual cash value coverage instead of replacement cost coverage, which means depreciation is factored into your payout after a covered loss.

While HO-8 policies offer vital protection for older homes, they don't cover as many hazards as a standard policy, and the coverage limits may be lower. Some common exclusions from HO-8 policies include damage by earthquake and earth movement, types of water damage, neglect or maintenance issues, wear and tear over time, pest infestations or mold, war and government action.

Contact your state insurance department to see if they offer a FAIR plan

If you're struggling to insure your home, it's worth contacting your state insurance department to see if they offer a FAIR plan. FAIR stands for Fair Access to Insurance Requirements and these plans were introduced in the 1960s to give homeowners access to insurance when their property was considered high-risk.

FAIR plans are a type of shared-market or assigned-risk insurance. They are insurance pools that sell property insurance to people who can't get covered by a voluntary or traditional insurance market. All FAIR plans cover losses from fire, vandalism, rioting, and windstorms. They may also offer standard homeowners insurance, including liability insurance. For example, FAIR plans in California cover brush fires, while Georgia and New York cover wind and hail damage for some coastal communities.

To qualify for a FAIR plan, you may need to make improvements to your property to limit the risk of fire, theft, or water damage. This could include upgrading electrical wiring, heating, or plumbing systems, or repairing your roof. If you don't make these improvements, a FAIR plan administrator may deny you coverage.

FAIR plans are generally more expensive than private insurance and offer less coverage. They are intended to be a last resort when no other insurance company will cover your property. However, they can provide crucial protection for homeowners who can't get insurance elsewhere.

Frequently asked questions