Like it or not, home insurance is an investment you’ll have to make if you want to be a homeowner. Even if it’s a small, older home, and you’ve already paid your mortgage off, it’ll still need some protection. Anything can happen – don’t think that your property is immune to everything. However, you’re still entitled to fair coverage. Even if you live in an area that is considered to be high risk, homeowners insurance shouldn’t be too expensive and unfair.
There ARE laws protecting you, such as FAIR – Fair Access to Insurance Requirements. These were created to help homeowners who live in high risk areas find the most affordable insurance possible. Each state has its own version of FAIR, which is partially subsidized by private insurers and taxpayers. Should some peril such as a natural disaster strike an insured property, the claim’s cost would be shared across multiple participating companies.
There are also newer options for those concerned about high risk homeowners insurance, such as those offering peer-to-peer type of funding. Everybody pays a flat fee every month into a large pool, from which the claims are paid out quickly. This might be a great option for you depending on your needs.
Even if you live in a safe area, you could still be considered “high-risk” if you have bad credit. This is something that you can work on, although it will take some time for your credit situation to improve and your score gets higher.
Factors in Determining High Risk Homeowners Insurance
Other factors, such as the climate and weather in your area and the crime rate, you really can’t change. Since you can’t change the location of your property, you can add safety features and improvements and apply for discounts. All the high risk homeowners insurance providers offer some discounts to property owners who have security systems, sprinklers, sturdier roof, and so forth.
Homeowners are also considered high-risk if they have a history of filing claims. If you’ve filed multiple claims in the past, you might have trouble getting good coverage in the future. Contact your state’s insurance department or consult with an independent agent for advice.
You don’t have to apply for a FAIR plan right away. Try to get a good insurance policy from a highly-rated provider first. If you keep getting turned down, or get high rates that you won’t be able to afford, then consider the alternatives.
Regardless of your situation, you might be interested in the unique way Lemonade Insurance is structured. The company takes a fixed fee out of monthly payments and pays reinsurance as well as unavoidable expenses, and then use the rest for paying out claims. It’s a good option for those looking for high risk homeowners insurance and available in many states.