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Feb 8, 2021
3 min
Guide to High-Risk Home Insurance

As a homeowner, your priority will always be your property's safety, which makes perfect sense. So the first thing you would do is get a home insurance policy. However, if you find out that your property requires high-risk home insurance instead of a standard one, it can be daunting. No one wants their home to be considered ‘risky’ because it can take years of hard work to have a place that you can call home.

However, if high-risk home insurance brokers or companies have stamped your property as a high-risk, this doesn’t necessarily mean there’s something wrong with it. There can be a range of factors contributing to this. And even if it is considered a liability right now, there are some things you can do to make it better and get that insurance approved. This guide is put together to help you understand high-risk home insurance, what is considered high-risk, and what you can do about it, so let’s dive right in:      

What is High-Risk Home Insurance?

Simply put, it’s a property insurance type that offers coverage to homes that are considered riskier than a typical home. However, in some cases, the property itself might not even be ‘high-risk,’ but rather, the homeowners or even their belongings like certain pets are contributing to that status. This can make things tricky for you to decide on your own whether you or your home falls into the high-risk category or not.

Although a thorough evaluation by any reputable high-risk home insurance company in Ontario can help you figure this out, you should know the common factors too. This is important because if your home is considered high-risk, you will have to shell out more money in premiums than standard home insurance. Not getting your home approved for high-risk insurance is also a possibility.

What Factors Do High-risk Home Insurance Brokers Consider?

When classifying your home's risk level, high-risk home insurance companies consider how likely you are to make claims in the future; the likelier, the more risk is involved. Many factors are involved ranging from claims history, credit history to how risky your area is, and more. Let’s discuss the most common ones below:

· Your Property is Older: 

If your property's necessary repairs and renovations are long overdue or if the home is very old, it can be a high-risk property. A heritage property with significant wear and tear is likely to be at risk of collapsing or getting easily damaged during harsh weather, making it a big liability.

· High-risk Area Code:

If your property is located in a neighborhood that has a high crime rate, especially break-ins and vandalism, then it will be considered high-risk. Similarly, if it’s in an area with a history of floods or other natural disasters; it’ll fall into a high-risk category.

· Roof Age:

Yes, it might seem a bit odd, but high-risk home insurance companies take this into account as well. And technically; they are not wrong either. If the roof collapses, it will destroy everything beneath it; this kind of damage would require a large amount to fix.

· Issues in Property’s Structure: 

If the plumbing is not right or the pipes are leaking; they can cause your home to flood. Similarly, loose wires can be a serious safety hazard. Or, if your property's foundation is not up to the code, it’ll be considered high-risk.

· Only Used for Vacation: 

When getting high-risk home insurance in Ontario, you will be asked if you live in the property or only use it to spend your vacations. If the home is left vacant for a long time, it can be vulnerable to damages from natural disasters and break-ins.

· Credit Score: 

High-risk insurance brokers look at your credit history to determine your financial situation. Since the premiums for high-risk and all-risk home insurance types are high, companies need to know that you will be able to make payments on time.

· Past Claims: 

If someone has filed several claims in the past, then in the eyes of high-risk insurance companies, they are riskier, not the home. This might indicate that they are careless about the upkeep of their property.

· Dog Breeds: 

If you own large dogs like rottweiler or pit bull, then the dog is a liability because it can cause accidents in and out of the property.

There are more factors that high-risk insurance Ontario companies consider. However, knowing the above ones can help you make necessary preparations before reaching out to them and increasing your chances of approval.

What to Do If Your Home is Considered High-risk? – Expert Tips:

If you’ve already reached out to a few high-risk insurance companies and either got rejected or received very expensive quotes, then there are a few things you can do to improve your situation. Let’s have a look at them below:

Ask Your Neighbors:

If your home is positioned in a high-risk area, your neighbours might have gone through what you are experience right now. So, talk to anyone with a home insurance policy and find out how they did it. You can find some valuable tips tailored to the area you are living in.

You can even ask your realtor for help and learn about insurance companies that are likely to approve your application.

Make Home Improvements:

If your property has damages or structural issues, get them fixed right away. Whether you get approved for high-risk home insurance or not is a secondary issue; your safety matters the most.

Plus, improving your property will make it less risky in the eyes of insurance companies, so besides getting approval, your insurance cost may go down as well.

Talk to High-risk Insurance Brokers:

There’s a difference between high-risk insurance brokers and companies. If companies have turned you down, don’t fret; reach out to a reputable insurance advisor. They have a network of highly accredited insurance providers.

Plus, talking to a home insurance advisor means you can tell them your exact situation with confidence; they will quickly connect you with the right insurer.

Find the best insurance rates today.

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