What Can I Do if I Can't Get Homeowners Insurance?

No one will insure you. So, what do you do? If you find yourself in this predicament, you might need high-risk homeowners insurance.

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Insuring your home isn't just a requirement from your mortgage company. It's the smart thing to do to protect your biggest investment. Find out your options if you can't get traditional coverage.

Can You Be Denied Homeowners Insurance?

Yes, you can get denied for a traditional homeowners insurance policy. You might find yourself in a position where no one will insure you if your home is at a high risk of having claims. The issues can relate to the home itself or to the area where the home is located. Some potential situations that could cause a denial include:

• Location with frequent severe weather or other potential threats like flooding or brushy areas at risk of forest fires
• High-crime area
• Vacant home
• Older home or one with risky features, such as bad wiring, a cracked foundation or additions that don't meet building codes
• Use of the home, such as commercial use

You can also be denied for reasons related to you, including having a low credit score, lapsed coverage or a history of claims. Some insurance companies won't insure homeowners who own certain dog breeds.

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What Can I Do If I Can't Get Homeowners Insurance?

If no one will insure me, what are my options? You can't go without insurance completely. Mortgage companies require insurance. Even if you own your home outright, you're risking a huge investment by going without insurance. Here are some steps you can take if you're not approved when you apply for homeowner's insurance.

• Find out why. Knowing the reason a company won't insure you could help you fix the situation. It can also help you find an insurance company that might overlook those issues. For instance, if you're denied because of bad credit, you might find a company that has more lenient guidelines. If it's due to outdated wiring or plumbing, you might repair the issue to get coverage.
• Check other options. If you only applied to one carrier, try other insurance companies. You could get a yes from a different insurance company. Not all insurers have the same guidelines, so it's possible to get denied by one but not another.
• Work with an independent agent. An independent insurance agent works with several companies. They might have nontraditional options that fit your situation, or they might be able to refer you to another agent or company that can help. 
• Look into a FAIR plan. As a last resort, this coverage is run by the state and allows you to get the basic coverage you need to protect your home and meet your mortgage requirements. Contact the insurance department for your state to find out about this high-risk homeowners insurance option.

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• What’s the Difference Between Homeowners and Renters Insurance?

What Is High-Risk Home Insurance?

High-risk homeowners insurance refers to coverage when an insurance company considers you a high risk. They determine this by evaluating how much of a risk they're taking by insuring you. If there's a high risk of you filing a claim, you might have difficulty finding an insurance company to cover you. Not all companies offer high-risk homeowners insurance because of the higher chance of greater expenses.

When you find coverage, you'll likely pay more for it. You might also have more limitations on the coverage, or some things might be excluded from coverage. This means you could take on more financial risk than you would with a regular policy, but you'll still have some coverage for catastrophic events. Checking with several companies that offer high-risk homeowners insurance can help you find the best possible coverage for the best rates.

What Is FAIR Plan Home Insurance?

FAIR stands for Fair Access to Insurance Requirements. It's a state-mandated option to allow people who are denied by traditional companies to get the home coverage they need. Many, but not all, states offer FAIR plans. All the private insurance companies that have a license to provide insurance in the state back the plans, which means they also share in all profits, losses and expenses. Each company's financial obligation is based on its share of the insurance market in that state.

If you have to rely on a FAIR plan, you can expect to pay more than usual for less coverage. Because it's a state plan, the coverage and details can vary based on where you live. You might only have the option of dwelling coverage, or you might be able to add coverage for things like personal belongings.