Insure Your Future

Insurance Coverage For High-Risk Homes

14 May 2020 by Sue Palmer

Homeowners insurance companies are wary of high-risk homes, such as homes in flood zones. If you have a high-risk home, you might struggle to find coverage for it or pay high premiums. Fortunately, the following measures can ease your burden of insuring your high-risk home.

Mitigate the Risks

Understand what makes your home a high risk and mitigate the risks. A home inspection can help you identify serious risks. For example, insurance companies might be wary of your home if:

• The home is vacant
• The home is in a flood zone
• The roof is old

All of these are things that shouldn't deny you coverage. For example, you can arrange for a caretaker to live in your home to reduce the risks associated with the vacancy. For flooding, proper drainage and home maintenance can help.

Exclude Extreme Perils

If you can't or don't want to get rid of a risk, then the next best thing is to exclude it from your insurance policy. For example, many home insurance companies don't want to cover pets, especially aggressive dog breeds.

Fortunately, some of these carriers will allow you to exclude animal coverage from your policy. However, don't just leave it at that — get liability coverage elsewhere so that you don't pay for animal-related liabilities out of your pocket.

Consider Local Insurance Companies

In some cases, national insurance companies don't understand the unique risks that local neighborhoods face. The insurance industry doesn't work well with ambiguous or unknown risks. Fortunately, small or regional insurance companies usually step in to cover such areas. Therefore, consider dealing with such regional companies if the major plays are not interested in doing business with you.

Choose a High Deductible

Another useful trick is to opt for the highest deductible you can. The deductible is the out-of-pocket expenses you have to pay when an insurance company approves your claim. A high deductible reduces the risk exposure to your carrier because they won't pay as much as they would if you had a allow deductible. Remember to have an emergency fund that can cover the deductible in case disaster strikes.

Consult the Neighbors

Lastly, you may also get some help by consulting the neighbors. This can be helpful if you are new to the area — for example, if you have just bought a home in a new city and you are struggling with an insurance purchase. The same insurance companies that your neighbors use may be willing to do business with you.

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