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High-risk home insurance covers homeowners who may be at a higher risk of filing a claim, either because they live in an area more prone to disasters than others, because they have a history of filing claims, because they are frequently away from home or because they live in a home that falls short of the insurers’ safety standards.

If it’s riskier to cover you, you’ll likely pay more in premiums than someone who can be covered by a traditional homeowners insurance policy with roughly the same amount of coverage. 

However, many people won’t be able to get high-risk homeowners insurance coverage at all, and they may have to rely on their state’s FAIR plan (if one is offered) coverage or surplus line insurance, both of which have drawbacks.

Other people who need high-risk homeowners insurance but can’t afford the premiums may be able to qualify for coverage or save money on their premiums by undertaking home safety measures.

What does high-risk homeowners insurance cover?

High-risk homeowners insurance typically offers the same core protections as standard policies, like damage from fire, wind, or theft, but is specifically designed for properties that insurance companies consider more likely to experience claims. 

“When your home is in a high-risk area, you’re essentially red-flagged by insurers as a potential claim just waiting to be made,” said Chap Michie, home insurance expert and vice president at Guardian Service. “That’s why standard home coverage isn’t good enough and why you may well require add-ons such as flood, earthquake or wildfire coverage.”

Basic coverage

  • Dwelling coverage: Protects the physical structure of your home against covered perils
  • Personal property protection: Covers your belongings inside the home
  • Liability coverage: Provides financial protection if someone is injured on your property
  • Additional living expenses: Helps with costs if you’re temporarily displaced from your home

Additional coverage you may need

  • Flood insurance: Standard homeowners policies explicitly exclude overland flood damage, so if you live in a flood zone, you may need to get a National Flood Insurance Program (NFIP) policy, which may have limited coverage, or a flood insurance policy separate from your home insurance. 
  • Earthquake insurance: If you live in an area prone to earthquakes, your typical home insurance may not include coverage for earthquake-caused structural damage.
  • Wildfire insurance: As with earthquake insurance, wildfire coverage is often unavailable from your typical home insurance policy, although other forms of fire damage are covered.
  • Wind/hurricane insurance: Homeowners living in an area at high risk for hurricane—or tornado-related damage may need to purchase additional coverage or a new policy to cover wind and hurricane damage.

What makes a home high-risk in the eyes of insurers?

Several factors make a home risky to insure. Some involve the home itself, such as where it’s located or how it’s constructed. Other factors are personal to the homeowner, such as whether they have filed a lot of claims or keep an aggressive dog as a pet.

Geographic risks

Homes in areas more prone to severe weather are likely to be considered high-risk. Wildfires, floods and tornadoes are some of the most common weather and climate concerns for high-risk homes. In addition to weather, topographical perils, such as a propensity for earthquakes and sinkholes or close proximity to a mine, will likely not be covered except by high-risk home insurance.

Beyond natural disasters, living in a high-crime area may add to your risk, as theft and vandalism are often covered perils in your home insurance policy.

Home-specific risks

Older homes with outdated electrical, plumbing, or roofing systems could be considered high-risk. These homes are more vulnerable to damage in a disaster, and faulty or unsafe construction could cause injury to others.

Claims history and insurance score

Your claims history could make you riskier to insure. If you’re filing claims frequently, an insurer might decide it does not want to continue insuring you or require you to purchase expensive or limited coverage.

You’ll also have to consider your insurance score, a calculation made by the insurer of your creditworthiness, which is similar to a credit score. Your insurance score accounts for financial factors like your payment history (for premiums), outstanding debt, and the age of your oldest credit accounts. 

How FAIR plans provide coverage for high-risk homes

Fair Access to Insurance Requirements (FAIR) plans are last-resort coverage for high-risk homeowners whom home insurance companies have declined to insure. Mandated by state law in the 33 states that offer some version of them, FAIR plans offer basic property insurance but come with significant limitations.

How FAIR plans help homeowners in high-risk areas

FAIR Plans function as shared-risk pools created by state legislation and operated by associations of insurers licensed in that state. Each participating insurance company shares in the program’s profits and losses based on their market share within the state.

Differences between FAIR plans and standard homeowners insurance

  • Limited coverage: FAIR plans typically offer more basic coverage than standard homeowners policies, often covering only specified perils rather than comprehensive protection
  • Higher premiums: Due to the elevated risk profiles, FAIR plan coverage generally comes at premium rates higher than standard market policies
  • Coverage of last resort: These plans are designed as the market of last resort options after homeowners have been denied coverage by multiple private insurers
  • Not all perils are covered: Additional endorsements or separate policies may still be needed for perils like flood or earthquake

States that offer FAIR plans

Thirty-two states plus the District of Columbia offer some version of the FAIR plan, according to the Insurance Information Institute. They are as follows:

  • Alabama
  • California
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • New Jersey
  • New Mexico
  • New York
  • Ohio
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Texas
  • Virginia
  • Washington
  • West Virginia
  • Wisconsin

Alternative home insurance policies for high-risk coverage

Because not everyone can afford a high-risk homeowners insurance policy, and because FAIR plans may not be adequate for your needs, you have several other options to consider if you need home insurance coverage.

Surplus line/non-admitted insurers

These are carriers who can create customized home insurance policies for you. Also called the excess line market, these policies may have higher premiums, and their coverage isn’t regulated by your state’s insurance department (hence “non-admitted”). As a result, surplus line coverage typically costs more than a standard homeowners insurance policy.

Talk to an independent agent

Independent agents can access home insurance policies offered by smaller or nonstandard carriers, often local insurers who work directly with your community.

Why some insurers leave high-risk areas

Insurers have been leaving or reducing coverage for high-risk areas, with homeowners finding that their policies are not being renewed or that their premiums have become too expensive. This is primarily due to the increasing intensity and severity of climate change-related catastrophes, with weather events like hurricanes and wildfires increasing in strength and duration. 

With damages exceeding billions of dollars, insurers have had to revise their risk models to stay profitable, and they’ve relied on reinsurance companies—which provide financial backing for insurers—to be able to pay claims. This has resulted in reinsurance companies themselves feeling the strain, thus threatening the financial stability of insurers and reinsurers alike.

Ways to lower your high-risk home insurance premiums

While lowering your home insurance premiums is no easy task, especially for high-risk homeowners insurance premiums, there are several steps you can take.

Renovate your home to improve its safety

Investing in home safety improvements offers significant savings potential for high-risk properties. Installing impact-resistant roofing and hurricane shutters in storm-prone areas or updating electrical systems and plumbing can qualify for substantial discounts. Fire-resistant materials in wildfire zones also trigger premium reductions.

“Modifications that reduce actual risk are essential,” Guardian Service’s Michie said. “For example, adding a metal or asphalt Class A fire-rated roof in place of a worn-out shake roof can make your home a better prospect for coverage in wildfire zones. Raising your home above base flood elevation (BFE) can substantially lower your flood insurance premium. Seismic retrofitting your home, such as anchoring your home to its foundation, can open the door to earthquake coverage.”

You may even be able to receive a credit to your premiums from your insurer. 

“Insurers often grant credits for new electrical, plumbing or HVAC systems because it reduces the risk of water or fire-related damage,” Michie said. “And smart home technology—such as moisture sensors, auto water shutoffs or monitored security systems—don’t just improve home safety, they often qualify for premium discounts.”

Increase your deductible

Choosing a higher deductible — $2,500 or $5,000 instead of $1,000 — can lower monthly payments, although you may have higher out-of-pocket expenses when damages occur.

Bundle your home and auto insurance

Policy bundling is among the simplest ways to secure discounts. If your insurer allows, combining your homeowners policy with auto insurance can save you as much as 10% to 25%.

Shop around and compare home insurance quotes

Regular comparison shopping is essential in volatile, high-risk markets. Different insurers offer different levels of coverage, and you may be able to find similar or identical coverage at a lower premium by looking at various carriers’ offerings. 

Frequently Asked Questions

Can I switch from a high-risk home insurance policy to a standard policy?

You may be able to do this if you can demonstrate that you’ve made significant renovations to your home to bring it in line with your insurer’s safety standards. Otherwise, you may only be able to switch to a standard policy if you accept lower levels of coverage.

How long does a home remain classified as high-risk?

A home’s high-risk classification typically doesn’t have a fixed expiration date. Instead, this designation remains until the specific risk factors that triggered it are addressed or the surrounding risk landscape changes. 

Most insurers consider claims history for three to five years for claims-based high-risk designations, after which the impact on rates gradually diminishes if no new claims occur.

Source:

The Insurance Information Institute. “What if I can’t get coverage?” Accessed April 2025.

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Zack Sigel

 
  

Zack Sigel is a writer and editor based in New York City. He has been managing editor at Policygenius and M1 Finance, where he led teams specialized in writing about business and finance, and he has also written about music and culture for Hyperallergic, VH1, Complex, and the Los Angeles Review of Books. Zack has a bachelor's degree from New York University, Tisch School of the Arts.

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