Are you moving to Arizona? Or perhaps you’re an Arizona native but are moving to a new location, or you’re shopping for new insurance coverage. In any case, purchasing homeowners insurance is a pretty straightforward process and can typically be completed by answering a few questions online or over the phone. That is unless your situation is more complicated than most and you must purchase high-risk insurance.
Insuring your home is extremely important and not something to put off for another day. Therefore, if you need insurance but find yourself in a high-risk scenario, it’s essential to find out exactly what type of insurance you need and make sure you get it. Here are some questions and explanations about high-risk home insurance.
What is High-Risk Homeowners Insurance?
If you are denied home insurance coverage for any reason, that does not mean you are resigned to just going without. Many home insurance companies will off specific plans and coverage options for those who have been deemed high risk. This increased risk coverage often comes at a higher cost, with higher deductibles and different terms. But this extra cost comes at a small price if you find yourself needing to file a claim.
High-Risk Home Insurance Scenarios
There are many situations and reasons that your home may be risky to insure. When this is the case, homeowners insurance companies will only take you on as a client under specific plans that come at a higher cost. These scenarios can be because of situations you have endured or choices you have made in the past. Most often, though, it is because of your location.
You are High Risk
Home insurance companies may consider you to be a high-risk client if you have a history of filing a lot of claims. Each claim costs the company money, and if they know they are likely to have multiple payouts on your home, they may increase your insurance rates to cover those costs.
Additionally, if you have a low credit score or criminal history, insurance companies may believe you have a high likelihood of not being able to pay your premiums and, therefore, may charge you extra. Likewise, if you have an aggressive pet on the property, the possibility of paying out a claim for a dog bite is higher than with a docile pet, therefore, you may have to purchase a separate pet liability coverage policy.
Your Home is High Risk
The more likely reason that your home is considered high risk is because of the dwelling itself. If the home is older and likely to need multiple repairs or if it is a vacation home where you do not reside for most of the year, the home might be deemed high risk.
Most high-risk scenarios, though, involve the home being located in a high-risk area.
What is a High-Risk Area?
Before purchasing home insurance, the company will assess your zip code to find out the likelihood that you will file a claim. If your area is prone to natural disasters, then your insurance rates may be higher to make up for this risk. For instance, if you are in a flood plain, live on an earthquake fault line, or live in an area with frequent monsoons, your home may be flagged as high risk.
Most companies will offer special coverage for these scenarios, such as flooding insurance covering the repair of your home, replacement of personal property, and additional living expenses if your home floods. If you are denied in the private market, though, many states offer state FAIR plans (Fair Access to Insurance Requirements) that allow you to purchase insurance. Though, Arizona does not have a government FAIR plan.
How to Buy High-Risk Homeowners Insurance in Arizona
At Independent Insurance Brokers of Arizona, we specialize in finding the best policy for your needs. If you need high-risk insurance or have a history of insurance barriers, we can help. Our team shops over 40 national and local insurance carriers to find the best deal for you to ensure that you are insured.
Call us today to find High-Risk Homeowners Insurance in Arizona.