High Risk Homeowners Insurance

Not everyone can qualify for a traditional homeowners insurance policy. The location of your home and the existence of certain risks, such as an old electrical or plumbing system, may preclude you from obtaining standard coverage. When you cannot purchase coverage through conventional means, you may have to turn to a high risk homeowners insurance policy. These policies cost more than basic plans but offer the same protection. Read on to find out if you need this type of plan, what it does, and where to buy it.

Defining "High Risk"

Most often, insurers classify homes as high risk when they are located in disaster-prone areas, such as coastal regions, flood zones, Tornado Alley, and so on. These areas tend to experience more frequent and more severe natural disasters than other regions, which is why carriers either refuse to insure homes in these areas or charge substantially more for coverage. Locations with high crime rates may also make a home more vulnerable to theft or vandalism, thereby pushing it into the riskier category. Lastly, a home in this category sometimes has nothing to do with location, but rather with the structure of the home itself. Older homes, for example, usually carry more risk than newer properties. High risk homeowners insurance can provide coverage for homes that fall into any of these categories.

Purchasing This Type of Plan

When you cannot buy home insurance coverage on the private market, you may have an alternative with high risk homeowners insurance. In most states, the government sponsors high risk homeowner insurance programs through which private carriers issue subsidized coverage to owners of high-risk properties. Such plans were made available through the federal Fair Access to Insurance Requirements (FAIR) program. To see if you qualify for a FAIR home insurance plan, you can either contact an insurance carrier or talk directly to your state's FAIR Plan office.