Examples of Properties That Might Face Insurance Difficulties

You might struggle to buy homeowners insurance coverage for some high-risk homes. Even if you get coverage, expect to pay high premiums for such homes, particularly if you don't do your research properly. Here are examples of such homes.

Old Properties

Old properties cost insurance carriers a lot of money due to the high risks of damage such homes face. For example:

• Old homes have weakened materials that don't fare well in case of disasters. For example, if a storm blows through a neighborhood, the homes with old roofs will experience more damage than those with new roofs.
• Old homes have vulnerable systems and installations such as furnaces or electrical systems that have suffered years of wear and tear.
• Some old homes have rare and expensive materials or designs that make the homes expensive to repair or reconstruct.

The older a home is, the riskier it is as far as home insurance companies are concerned. In many cases, the insurance carriers require a home inspection before they can cover an old home.

Vacation Homes

Vacation homes are problematic for insurance companies because such homes stay vacant for part of the year. A vacant home faces higher risks of damage and theft than an occupied home. For example:

• Thieves regularly target vacant homes over occupied homes.
• Accidents in vacant homes, such as water leaks, can worsen into serious hazards since no one is there to mitigate the damage.

The more your vacation home stays vacant in a given year, the more risks the home presents to insurers. In some cases, your insurance company might require you to buy a special form of coverage for your vacation home.

Homes With Attractive Nuisances

Attractive nuisances are things that children find attractive but can harm the children. For example, most children are fascinated by wells, but the children can fall in open wells and sustain serious injuries. Other examples of attractive nuisances include swimming pools, trampolines, and junk automobiles.

You will face a liability claim or lawsuit if an attractive nuisance on your property harms a child, and your insurance carrier will have to pay the damages. Thus, insurance carriers are often reluctant to insure homes with attractive nuisances.

Homes With a Long Claims History

Insurance companies look to the past to predict the future. According to insurance carriers, a home that has triggered numerous claims in the past is likely to trigger further claims in the future. Thus, you may face coverage difficulties if you acquire a home with a history of multiple claims. The home may face insurance difficulties even if you aren't the one that made the claims.

Homes in Disaster Areas

Natural disasters, such as wildfires, earthquakes, and storms, cost insurance companies millions of dollars every year. A natural disaster can damage a home and its contents and necessitate a complete reconstruction of the home. Some areas are more prone to natural disasters than others. Expect insurance difficulties if you are interested in a home in a disaster-prone neighborhood.

Unique Homes

Lastly, unique homes also cost insurance companies a lot of money, which means you might struggle to buy coverage for a unique home. A unique home doesn't have the characteristics of conventional homes or other homes in the neighborhood. For example, a home may be unique if it has a funny shape, is too big or too tiny or is made from unique materials.

Unique homes are difficult to insure because home insurance companies use conventional homes to do their risk analysis. A unique home is an unknown entity that may harbor hidden risks that insurance carriers are not aware of.

Coast Comp Insurance Agency can help you assess a property's insurability, advise you on how to reduce your coverage rates, and help you buy the right coverage. Contact us if you want to buy coverage for a high-risk home or if you want affordable coverage for any real estate property.