In 2023, wildfires destroyed 2.7 million acres in the U.S., according to the Center for Disaster Philanthropy, including more than 3,000 homes. In just the first six weeks after the August 2023 fire in Maui, over $516 million in homeowners insurance claims were filed.
Living in a disaster-prone area can make getting homeowners insurance a lot harder. Both Allstate and State Farm have stopped issuing new home policies in California, pointing to the uptick in floods and fires as among the reasons.
Insurers are more likely to decline coverage if there's a high likelihood of claims being filed. It doesn't just have to be disaster-related, however: Anything from living in a high-crime neighborhood to owning a swimming pool with a diving board can make you a high-risk homeowner.
Find out which insurance companies will cover high-risk homes and homeowners and what alternate programs exist if you can't get a policy elsewhere.
High-risk home insurance
Find the best homeowners insurance
What is high-risk homeowners insurance?
Home insurance companies determine coverage based on the risk of a claim being filed, the type of claim, and the associated costs. Not only is the condition and location of a home considered, according to the Insurance Information Institute (III), but the homeowner's financial background and claim history.
Some households might be considered a bigger risk but still qualify for a policy, though their premiums are typically higher and the coverage is more limited. Beyond traditional insurers, there are also state-run programs and alternative providers to close the gap.
What makes a home high-risk?
These are just some of the circumstances that can make an insurer consider your property high-risk.
Location
Houses in areas prone to wildfires, earthquakes, hurricanes or other severe weather are usually seen as a higher risk for repair-related claims. Homes in high-crime areas could present a higher risk of vandalism or theft.
High-risk features
A swimming pool may make you the envy of the neighborhood but it also poses a significant risk of injury — and of a claim being filed. A homeowner could even be held liable if a child snuck onto their property and injured themselves in the pool.
Older roof
Your roof protects the rest of your home, so an older or damaged roof poses a higher risk.
Poor maintenance
Outdated electrical or heating systems can increase the likelihood of fire or water damage.
Vacant home
A vacation home you only use a few weeks a year could be considered high-risk since it's less likely someone will be on-site to spot a leak, fire or break-in.
What makes a homeowner high-risk?
Some common reasons property owners are considered a higher risk:
Low credit score
Like a traditional credit score, your insurance score is based on your credit history. In most states, your credit score influences the price you'll pay for coverage or whether a company will even write you a policy. California, Maryland, Massachusetts, Michigan, and Oregon are among the states that restrict the use of credit scores in approval or rates.
Prior claims history
If you've filed many claims, you might have a harder time getting coverage or pay more for it. Insurers review applicants' CLUE report, which has your claims history over the last seven years.
Pets
Some breeds of dogs are seen as a higher risk, according to the III including rottweilers and pit bulls. That also applies to exotic animals and any pet with a history of aggression..
Home businesses
If you work out of your house, especially if you host clients, it could increase the risk of an accident.
How to get homeowners insurance if you're high-risk
If you own a high-risk property, you may have already been rejected by insurers or had your policy nonrenewed. That doesn't mean you can't get covered, so try again with at least three more carriers.
Part of the Farmers Insurance Group, Foremost focuses on specialty homes and has high liability limits. It will consider homeowners who have been rejected before, especially for a low credit score. In some states, policyholders can receive up to 150% of the insured amount in the event of a total loss by a covered peril.
Foremost Homeowners Insurance
Cost
The best way to estimate your costs is to request a quote
App available
No
Policy highlights
Foremost covers a variety of homes and situations — it offers traditional homeowners insurance in addition to coverage for seasonal homes, vacant homes, condos and more. A member of the Farmers group of companies, Foremost states that it offers coverage for homes that have been declined or non-renewed by other companies. It also covers high-risk situations like swimming pools and pets, and offers those who have bad credit.
AIG is known for tailoring coverage for high-value or historic properties: In most states, it only insures homes worth at least $750,000. If you live in a region prone to wildfires or hurricanes, AIG's free disaster mitigation and architectural services could come in handy.
AIG Homeowners Insurance
Cost
The best way to estimate your costs is to request a quote
App available
No
Policy highlights
AIG can cover a variety of high-end homes, including historic homes, homes outside of the United States and co-ops and condos. Its policies cover landscaping, fragile item breakage and pet damage. It also offers assistance with preventative services including background checks for staff, security consultations and water damage protection.
If you're buying, selling or renovating and won't be in your house for a while, American Family offers customized vacant-home policies available in 3, 6 and 12-month increments. You can add coverage for attached structures or possessions, like lawnmowers and snowblowers.
American Family Homeowners Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
American Family offers coverage for a variety of situations, including home-based businesses and short-term rentals. The company also offers coverage for vacant homes and vacation homes. A wide variety of policy add-ons can help you get the coverage you need and skip what you don't.
FAIR Plans
If you've been turned away by the traditional insurance marketplace, many states have Fair Access to Insurance Requirements (FAIR) Plans, sometimes referred to as insurers of last resort. Rather than a single carrier, your policy is backed collectively by a pool of participating insurers, which minimizes their individual risk. If you have a FAIR Plan and file a claim, the insurers all pay a portion of the benefit.
All FAIR Plans cover fire, vandalism, riots and windstorms, according to III, but other coverage varies by state. The policies are usually more expensive than ones on the voluntary market and may cover less. In addition, you may have to repair your roof or upgrade the electrical, HVAC or plumbing to qualify.
To see if your state offers a FAIR plan, contact your state's insurance department. To qualify, you'll have to show you've been turned down by multiple carriers.
Surplus lines insurance
To cover homes that traditional carriers can't or won't, many states allow insurance companies that are not licensed within their borders to issue policies. The surplus lines provider must still be licensed in its home state or country, however.
A homeowner with three to five rejections from traditional insurers may qualify for surplus lines insurance, which is also known as excess lines insurance. Policies can have higher deductibles and more exclusions.
Check with your state's insurance department to see what options are available.
FAQs
What is high-risk homeowners insurance?
A home may be considered high-risk (and harder to insure) because of its location, age or special features. If an applicant has poor credit or a history of claims, they may also be considered high-risk.
Is high-risk home insurance different from standard homeowners insurance policies?
People or homes considered high-risk may be able to get a standard policy, but it may be more expensive and offer less coverage.
What if I can't get high-risk homeowners insurance?
If you're unable to get insurance through the voluntary market, you may be eligible for a FAIR Plan or surplus line insurance. These policies tend to be more expensive and have more limited coverage.
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Bottom line
There are many reasons why a home or homeowner might be considered high-risk, including severe weather, maintenance issues, bad credit and even the kind of pet you have. If you're turned down, find out why and see if you can appeal or address the issue. If you're repeatedly rejected by traditional insurers, look into coverage through a FAIR Plan or surplus lines carrier.
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