High Risk Property and Home Insurance

Buying insurance requires a certain amount of research before you even begin comparing insurance quotes and part of that research is learning the terminology associated with different types of insurance, including auto, home, life, health and renters. One home insurance term you hope never applies to your home, but you should understand, is “high risk property.”

What is a high risk property?

Home insurance providers will consider your home insurance policy high risk if it meets one or more of four criteria. Two involve the home itself and two involve personal actions or information

1. Your home is located in an area where it is subject to above average risk of natural disaster such as flooding, hurricanes, tornados or forest fires.
2. Your home is located in a high crime area and is subject to above average risk of break-in, theft or vandalism.
3. You have a bad credit rating and the home insurance provider considers you personally high-risk, rather than the insured property.
4. A large number of claims on the property – typically two or more in one year – have been filed by you or a previous owner leading the home insurance provider to consider the property high risk.

What does owning a high risk property mean?

Very simply if your property, or you, are considered high risk by your home insurance provider your premiums will be more expensive. And it is possible your chosen home insurance provider will refuse to write a policy on your high-risk home. With a high risk property it truly pays to compare home insurance quotes to find the best possible rate. If your credit rating is causing your high risk designation, look over your credit reports for any mistakes that might be driving your credit score down. For a home in a high crime area you might get a better rate by improving your home security with an alarm system and better locks.

Did you know? You can reduce your home insurance premiums on a high risk property by purchasing a policy with a high deductible.

Takeaways:

1. A home insurance policy can be considered high risk because of the location of the home or by personal actions or information.
2. Owning a high risk property means higher home insurance rates, or even difficulty in purchasing a home insurance policy.
3. Compare home insurance quotes to find the best price with a high risk property.

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