What Makes A House Uninsurable?

Insurance companies want to ensure they are not taking on too much risk by insuring your home. If the insurer deems the risk excessive, they may reject your application for coverage or cancel your existing policy.

In this instance, an insurance company essentially states that your property is uninsurable. Even though providers' standards for determining whether a home is uninsurable may vary, the following are some common reasons why an insurance company may deem a home uninsurable.

1. Dangerous Location

If your property is in a high-risk area, you may not be eligible for homeowners insurance. How can a location become high-risk? Your residence may be situated in a high-crime neighborhood. If so, an insurance company will be apprehensive of the possibility of vandalism or theft-related property damage. You may also be disqualified if you reside too far from a fire station or fire hydrant.

The weather hazards where you live could make it more difficult or at least more expensive to obtain insurance. A location in a flood plain or a region prone to tornadoes could pose weather-related challenges. In regions prone to particular natural disasters, such as hurricanes, you may be able to acquire a separate insurance policy to cover that peril.

2. Dangerous Home Features

Even if your home location does not present any particular dangers, your property may. Here are some examples of potentially harmful housing features:

If you have a wood-burning stove in your home, the risk of experiencing a house fire is increased.

A wooden roof that lacks a fire-retardant coating is also considered a fire hazard.

Excessive accumulation of personal belongings, whether within or outside the home, poses a danger.

Outside your property, any unstable tree limbs or entire trees that could fall on your home are also deemed hazardous.

Swimming pool Pools and hot tubs pose a liability risk because someone could drown in them.

Trampoline: Due to the frequency with which trampolines cause injuries, they are considered a liability risk.

Treehouses provide a liability risk since someone could fall out and get an injury.

In some instances, these dangerous house characteristics may only result in increased premiums, but an insurance provider could deny coverage if your home has a sufficient number.

3. Home Maintenance Issues

If your home is in disrepair, an insurance company may determine that you are ineligible for homeowners insurance. There could be a multitude of maintenance issues, such as the following:

Fragmented foundation
Leaky roof
Decrepit electrical system
Insufficient plumbing
Broken windows
A dirty or broken chimney
Uncompliant extensions or outbuildings to a residence

An insurance company will dispatch an inspector to your home to look for such problems. If the insurance provider has already issued you a policy, these maintenance issues will increase your premiums. If the insurance company performs the inspection before issuing the policy, they may decide not to cover your home if they deem it to be a high-risk property. The good news is that these problems are fixable.

4. Aging Mobile Home

In certain instances, the issue is not home neglect but rather the home's age. Generally, older homes encounter greater issues. This is true of every home, but it is especially true if you own a modular or trailer home. These homes are not intended to last as long as the majority of residences with foundations.

Particular insurance firms have a strict policy that excludes coverage for mobile or modular homes above a certain age. This age limit varies by the insurance provider. It could range from a decade to a few years.

5. Claims Background

An insurer will review the property's claims history like your claims history. Before purchasing a house, verify whether there have been any insurance claims. If a former owner filed insurance claims on the property, examine the nature of the claims.

Occasionally, a claim may suggest an underlying structural condition that placed the prior residents in danger. This could pose a risk to you as a prospective resident and cause the insurance company to deny coverage. In addition, if the home has a history of frequent insurance claims, the insurance company may determine that the home is too dangerous to insure.

6. Poor Building Quality

A home with mediocre or subpar construction may also render it uninsurable. The house may exhibit apparent damage symptoms when the building is subpar or the foundation is inadequate. Therefore, the residence will be uninsurable and hazardous to occupy.

These residences raise liability concerns and are more likely to result in frequent claims. Many insurance companies will deny coverage for a poorly constructed home due to the high risk involved.

7. Substandard Remodeling

Similar to substandard construction, substandard remodeling may render a home uninsurable. Renovations can raise the value of a home, but if they are conducted improperly, the house may become hazardous. The insurance company will want to ensure that the renovation adheres to building requirements and does not harm the electrical wiring or plumbing of the property. If the renovation is deemed unsatisfactory, the insurer will likely decline your application for homeowner's insurance.