Why You Need High Risk Homeowners Insurance?
How do you know if you need high risk homeowners insurance?
Every single home should have insurance, but not every insurance company can insure every home. Some homes are considered high risk, and as such, an insurance company may not cover them at all, or may only cover a limited number of them.
After all, insurance companies need to be able to pay out claims and make a profit, which is impossible to do if they insure a slew of homes that are more likely to submit high cost claims.
If you have a high risk home—or if you don't know if you have a high risk home but want to find out—keep reading. Here's what you need to know about high risk homeowners insurance.
What Makes Your Home 'High Risk'?
Excellent question. There are a few things that make your home high risk, and the more of these black marks your home has, the more high risk (and therefore expensive), your home will be to insure.
1. No Central Cooling or Heating:
If your home doesn't have central air, it's more likely to be considered high risk. Why? Because wall and window ACs are prone to leaking and as a result, mold and water damage.
What's more, window AC units require your window to remain open, which is a security risk.
Then you have portable heating equipment, like space heaters, which place your home at a greater risk of fire.
2. Your Roof Needs Work:
A roof with deteriorating shingles, old shingles, clay tiles or that's older can be more difficult to insure, particularly if you live in a state like Florida you need hurricane insurance in Florida.
Other roof risks include:
- Metal roofs over 20 years old
- A shed or flat shape roof over 10 years old
- A roof that has asbestos materials
- A roof with wood shingles or shake roofing
- A roof with asphalt or 3 tab shingles over 15 years old
- A roof with architectural shingles over 20 years old
3. Your Home is Vacant:
Whether your home is vacant because you are renovating or because you can't or don't occupy it for extended periods, insurance companies may be reluctant to provide coverage. The reason is simple: no one is around to monitor the home, and therefore, it's at an increased risk of vandalism or theft as well as fire and other accidents.
4. You Run A Business Out of Your Home
Homeowners insurance companies are unlikely to offer business insurance—precisely the sort of insurance you'll need to cover your business’s risks, even if that business is in your house.
Keep in mind that if you work from home, with a laptop, and perhaps a few other devices, you will likely be covered by regular homeowners insurance without an issue. However, if you run a car repair service or hair salon out of your home, for instance, your home will be considered a higher risk.
5. You Have an In Ground Propane or Fuel Tank
It's not that propane or fuel is necessarily more dangerous than other power sources, but inspectors can’t assess the condition of these in ground tanks, and therefore, cannot speak to their safety. In ground tanks can leak into the groundwater with no way of knowing and this adds an element of risk that will increase the cost of your homeowner’s insurance.
6. You Have an Old Electrical Panel
Older and/or outdated electrical panels pose a greater fire risk. As such, you may have to replace the panel altogether before an insurance provider will consider a policy.
High Risk Homeowners Insurance Can Be a Temporary Solution
Yes, high risk homeowners insurance costs more, but that doesn't mean your home always has to be considered high risk. Make the upgrades necessary to get your house off the high risk list, and then contact your insurer for a re-evaluation.
In the meantime, shop around for the best high risk homeowners policy. Get also home and auto insurance bundle quotes and compare them to find the plan that gives you the coverage you need at the most affordable price.