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High-risk home insurance

Fact-checked with HomeInsurance.com

When you buy a homeowners insurance policy, the carrier is essentially promising to assume your risk in the event of a covered loss. But some homes and homeowners are riskier to insure than others. Getting approved for homeowners insurance coverage can be difficult if you’re considered a high-risk homeowner. In this article, we’re going to explain who qualifies as high risk, and how to purchase homeowners insurance if you fall into this category.

What is high-risk home insurance?

High-risk home insurance is a type of property insurance that covers homes that are considered risky to insure for one reason for another. Houses can be high risk and homeowners can be high risk depending on a variety of factors. High-risk home insurance allows homeowners to get the coverage they need to protect their home and satisfy their mortgage lender. 

Who qualifies as “high risk” in home insurance?

If you’ve ever been denied home insurance coverage, it might be because you’re considered high risk. Typically, insurance companies look at the homeowner’s background and the home itself when determining the level of risk. Some of the factors that make a homeowner high risk include:

  • Having a history of claims
  • Poor credit score
  • Having an aggressive dog
  • Criminal record

There are also considerations for the house. High-risk homes are more likely to have a claim because something could easily get damaged or need replacing. Some of the factors that make a home high risk are:

  • Structural issues or a weak foundation
  • Old roof
  • Aging home
  • Located in a high risk area for weather or crime
  • Frequently empty (vacation home)

What is FAIR plan insurance?

Homeowners who don’t qualify for traditional property insurance should consider a FAIR plan, which stands for Fair Access to Insurance Requirements. FAIR plans are managed by state governments and allow high-risk homeowners to get the coverage they need. Not every state has a FAIR plan, but many states do, particularly ones with severe weather risks.

What does FAIR plan insurance cover?

FAIR homeowners insurance plans offer less coverage than traditional home insurance policies, but enable coverage for those who might not qualify otherwise. Because of that, they should be used as a last resort for homeowners who have been repeatedly denied by private insurance companies. FAIR plans offer dwelling coverage, which protects the outside of your home. It covers damage related to:

  • Windstorms
  • Wildfires 
  • Riots
  • Vandalism

FAIR plans also include liability coverage. Liability insurance covers your legal fees if a guest gets injured on your property, or you accidentally cause property damage at someone else’s home, and you get sued. Limits for both forms of coverage will vary by policyholder and state.

How much does a FAIR plan cost?

The cost of a FAIR plan is dependent on a number of factors, but typically you can expect to spend more for a FAIR plan than a traditional homeowners insurance policy. FAIR plans are designed to cover high-risk homeowners, and the higher possibility of a claim is reflected in the cost of the coverage. In addition, the more coverage you have, the more expensive your premium will be.

FAIR plan premiums are different in every state and by ZIP code. Your premium is also based on factors such as your age, the condition of your home, your credit score and your claim history. Unfortunately, there aren’t many ways to save money on a FAIR plan. The state doesn’t offer discounts like private insurers do. 

How to get FAIR plan insurance

FAIR homeowners insurance plans are government-run, so you’ll need to contact your state’s FAIR plan administrator to learn more about the process. The Insurance Information Institute keeps a record of FAIR plan providers and phone numbers. However, there are some basic guidelines you will need to follow.

Meet the qualifications 

Not every homeowner can purchase a FAIR plan, and applying does not guarantee coverage. Homeowners must meet several qualifications in order to be approved for a FAIR plan. The qualifications vary by state, but some of the essential criteria include:

  • The home must meet local building codes
  • Someone must be living in the house permanently 
  • Cannot have any active insurance claims on the home
  • Cannot own a restricted dog breed 
  • Cannot have an unsecured pool

Submit an application

If you meet the qualifications in your state for FAIR insurance, the next step is to submit an application. In most states, you need to work with an insurance agent to file an application. Ask your state’s FAIR plan administration to connect you with a participating agent. When you submit the application, you’ll need to provide proof of denied coverage by a few home insurance providers. 

Alternatives to FAIR plan insurance

If you don’t qualify for a FAIR plan, there are some alternatives you may be able to take advantage of. In any situation, don’t be tempted to leave your home completely uninsured. Consider one of these options instead:

Get non-standard insurance

Some high-risk homeowners insurance companies offer a policy called non-standard insurance. Non-standard home insurance is a specific policy for high-risk homeowners, but it’s offered by private insurance companies rather than the government. There aren’t many companies that offer this policy, and even then, non-standard insurance tends to run on the pricier end. However, it’s worth considering as a FAIR plan alternative.

Reduce your coverage

Oftentimes, an insurance company will deny coverage because your liabilities are too risky. For instance, if you own a pit bull, you may struggle to get insurance because insurance companies are worried your dog will bite someone. If you can’t get coverage because of a liability issue, ask the insurance company if they will sell you a policy without liability insurance. Not all companies do it, but it could help you get private coverage.

Renovate your home

If your home is older or in poor condition and it’s affecting your ability to get insurance, you could spend the money to upgrade your home. Replacing the roof, installing storm shutters and reinforced windows, and fixing old pipes or electrical systems can reduce your structural issues and increase your chances of getting approved for standard homeowners insurance. 

The takeaway:

  • If you are considered high risk to insure, you may require non-standard homeowners insurance.
  • FAIR plans are designed to cover high-risk homeowners, but only include dwelling and liability coverage.
  • FAIR plans offer less coverage and are more expensive than regular home insurance policies.
  • Although not every state has a FAIR plan, most high-risk weather states do.
  • Other non-standard insurance providers are an option for high-risk homeowners.

If you’re struggling to get home insurance coverage because you or your home have been deemed high-risk, a FAIR plan could be a good option for you. Start by checking to see if your state offers a FAIR plan and whether you meet the qualifications. Remember that FAIR plans offer limited coverage, and tend to be pricey. Before you apply for a policy, consider alternative options for non-standard insurance which might offer more coverage for a better rate. For the long term, find ways to lower your own or your home’s risk profile.

Elizabeth Rivelli

Elizabeth is an insurance writer for coverage.com, where she covers insurance providers and reviews policies to help consumers find comprehensive and affordable coverage for every area of their life. She has more than three years of writing experience for top online insurance and finance publications.

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