What Happens If I Can't Get Homeowner's Insurance?

A home is a significant investment, and it is important to take steps to protect that investment against potential costly damages. A standard insurance policy for homeowners covers your home and belongings in the event of unforeseen destruction. No one expects a house fire, but they happen every day. Unfortunately, there are circumstances that make it difficult to obtain homeowner's insurance, leaving you without a way to protect your investments. What are these circumstances that can leave you denied for coverage, and what should you do about them?

1. Your home is in a high-risk area, such as an area with high crime and theft.

Insurance companies are hesitant to insure homes that may potentially lead to regular claims. If your home is in an area where crime and vandalism are a regular occurrence, you may struggle to get a standard policy. The same can be said about areas that are at high risk of extreme weather events. If your home is in an area where natural disasters, such as tornadoes or flooding, occur often - it can mean your property is at high-risk of damage. This can lead to higher premiums or even denial of coverage outright.

2. Your home is old or in disrepair.

Another reason you may be denied coverage is due to the state of your home. Older homes may be charming in their own way, but they are typically more expensive to repair in the event of damages. They tend to have more distinct and unique architectural features that are difficult to replace. Plumbing and electrical systems may be old as well and in need of repairs or updates. There could be hidden problems, such as rotting or damaged wood, toxic mold or lead, and unstable foundations. These potential problems lead insurance companies to determine the risk is just not worth it.

3. Your home is not used or occupied often.

Vacation homes are a challenge when it comes to obtaining a homeowner's insurance policy. Since they are not typically occupied year-round, they are susceptible to a variety of problems. Theft and vandalism are a huge risk when it is clear the occupants are away for an extended time. Maintenance problems such as leaks in the plumbing, or holes in the roof, can go undetected for months at a time. This means problems that could have been easily solved become a more costly issue.

4. You, or the home itself, have a claims history.

Accidents happen, even if we do our best to ensure we avoid them. Smoke alarms can alert you to a fire before it gets out of control. Security cameras and detection systems can avert the attention of would-be robbers and vandals. You can take steps to prevent issues before they happen, but unfortunately, unforeseen events do occur. If you have a lengthy history of claims, it can be a red flag to insurance companies. If the home itself has a history of claims, this can mean the house itself may have significant issues, leading you to struggle to obtain coverage.