What to do if you get turned down for homeowners insurance

By Allstate

Last updated: January 1

Some homeowners have trouble when trying to insure a home. While this can happen for a variety of reasons, many times it's because the home is considered "high risk."

When you're getting ready to buy a home, it's a good idea to do some research ahead of the sale. This can help you determine whether you may have trouble insuring the home, and can give you time to discuss potential issues with your insurance agent. But, even if you get turned down for homeowners insurance, there are a few things you can do.

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What factors might insurance companies consider high risk?

Here are some factors that may make your situation high risk:

  • Your home is located in a high-risk area: Your house may be considered high risk if it's located in an area that typically experiences, for example, extreme weather (such as hurricanes or tornadoes) or high crime, says the Insurance Information Institute (III).
  • How often the home is used: If you own a home that isn't occupied very often (for example, a vacation home), it may be considered high risk. The III says this is because the home may be more susceptible to break-ins or prolonged undetected problems, like a burst water pipe.
  • Your prior claims history: Sometimes, homeowners with a claims history have trouble getting home insurance.

Remember, these are just a few examples that may make it difficult for a homeowner to obtain insurance. Be sure to talk with an insurance agent to learn what options may be available for your specific situation.

What steps can I take if my situation is considered high risk?

Whether your situation or home is considered high risk, or you have been turned down for insurance in the past, taking these steps may help:

Consult with your insurance agent

It's a good idea to talk to your insurance agent before purchasing a high-risk home. The agent can help you find out whether you may have difficulty insuring the property. If you already own a property and can't get homeowners insurance, it's still a good idea to ask an insurance agent about next steps. An agent may be able to refer you to a local insurance program or the next appropriate contact.

Talk to the neighbors

Chances are, if your home is in a high-risk area, you aren't alone. It's possible that your neighbors have also run into issues. It doesn't hurt to ask them about how they secured insurance on their home, and who their providers are, says the III.

Contact your state's insurance department

You can also consider contacting your state's department of insurance if you're having trouble obtaining homeowners insurance. Your state may have established programs (such as a Fair Access to Insurance Requirements (FAIR) plan) to help homeowners in the area get insurance, says the III. For example, you may find this type of program is available if your home is along the coast, as many homes in the area may be deemed high risk.

What is FAIR plan insurance?

A FAIR insurance plan sells insurance to homeowners who cannot otherwise get it, says the III. The plan specifically provides an insurance option to homeowners in specific high-risk areas, where the risk is out of their control.

Keep in mind that insurance through a FAIR plan may be more expensive than coverage from a private insurer. Plan coverage and qualifications can vary by state, so be sure to consult with your state's insurance department to get details for your area.

Are there other ways to insure a high-risk home?

If you're having trouble insuring a home, don't give up. Just because your situation or home is considered high risk doesn't mean you can't get insurance at all. Here are some options you may have:

  • Make home improvements: You may be able to make improvements to a high-risk home to potentially make the home more acceptable to an insurer — for example, by upgrading building materials or installing a security gate. It's a good idea to consult with an insurer about whether this is an option.
  • Try another insurance provider: Even if you're turned down by some insurers, you may still be able to find high-risk home insurance through another provider. Not all insurance providers are alike, and their policies and requirements for insuring a home can vary. For example, you may find that some insurers offer coverage for high-risk homes, but charge an increased premium to balance out certain risks.