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The worst thing that can happen to a homeowner is applying for high-risk home insurance. This could result in higher premiums and create more trouble when looking for coverage.
There are a number of reasons why you might be classified as high-risk. It could be due to the state of your property or your financial standing. If you want to overcome this issue, and secure your mortgage, here you will find everything there is to know about high-risk home insurance in Ontario.
There are common reasons why you might have to get high-risk home insurance. The first one is when your property is located in an area that is prone to natural disasters. For instance, if you are living in the US in an area such as California, you could be considered high risk.
California is at the top of the list of states that could experience wildfires throughout the year. That’s why you should consider buying a higher coverage and why your premiums are higher compared to other homeowners.
Other factors that could result in a high-risk classification are having a low credit score and if the property you are purchasing has a long claim history.
Even though the situations mentioned above are the most frequent, there could be other elements that the insurance company considers high risk. If you want to know if your property needs high-risk home insurance, check out the list below.
Key Issues on a High-risk Property
Since we have mentioned three of the most common issues that result in high-risk classification. Here we are going to focus on other factors that could have the same effect when applying to homeowner’s insurance.
In case you don’t match with any situation described, chances are you might need a standard policy with higher insurance. To find the best policies in the market, check this page.
Before we look into the issues that could lead any homeowner to apply for high-risk home insurance in Ontario. You need to understand that being high risk means you are most likely to file claims in the future. For instance, if you live in a dangerous neighbourhood where there is a lot of theft.
There is a higher probability that you might request reimbursements to replace your personal belongings. Now let’s check out other key issues that you can find in a high-risk property.
1. Rural Homes
Rural homes sometimes fall under a high-risk classification because of their location. Usually, these properties are located far away from the main cities and build in places where they are exposed to storms.
Other homes that are close to large bodies of water, such as lakes, mean the property is more likely to experience flooding.
2. Older/Historic Property
If your house is outdated and constructed with older materials, it would be considered a high risk. Also, if you live in a home with heritage designation or vintage features that could be difficult to replace, you will have to pay higher premiums.
3. Vacation Homes
You can think about these as properties that are not occupied the full year, only during some seasons or holidays. The reason why they are considered high-risk is that no one is keeping up with regular maintenance.
Let’s say that you have a summer cottage near the beach that you only use when the children are on vacation. If a pipe were to get clogged or the roof damaged, it could take you several weeks to find out and repair it.
4. Some Rental Properties
Most real estate agents would recommend you to only rent a property that is located near your home and they are right.
In case you live more than 100 kilometres away from the house you are renting, you would be considered an absentee landlord. If you are not close to the property to take care of any issues, you’ll need high-risk coverage.
5. Structural Problems
If your plumbing system is outdated, your wiring is deteriorating, or your walls have foundational cracks, your premium will increase. That’s why before purchasing a property, you need to do a complete inspection of all the possible issues.
6. History Report
Apart from having a long history of claims, if you ever cancelled a policy, or missed consecutive payments, you will be considered high risk. Also, it won’t help if you have various mortgages on your property.
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4 Tips to Find High-risk Home Insurance in Ontario
If you are part of any of the cases described below, there is no doubt you will need to find high-risk insurance in Ontario. To help you out, we are going to give you some tips to get the coverage you need.
1. Ask for Quotes
If you know you are classified as a high-risk homeowner, you may have to talk to more than one agent. Brokers will help you find what you are looking for with the best price in the market.
2. Talk with Your Community
In case you move to a high-risk location, chances are your neighbours experienced the same problem you are going through. That’s why they are the best point of contact. Talk to them and find out how they got their policy. This could help you save lots of time in the process.
3. Surplus Carrier
Most people don’t consider a surplus carrier when they need high-risk insurance, but that might be their best option.
A Surplus carrier specializes in these types of policies and homeowners rejected by other insurance companies. However, choosing a surplus carrier should be your only alternative after you talk with the insurance companies.
4. Reduce Risks
Some people have the possibility of eliminating their high-risk classification by reducing their risk. This means making improvements to your plumbing system, installing more security in your property or paying for a new roof.
The only way to find out what you can fix is through a complete report of your home. Also, keep in mind that you need to be a good customer. Pay all your premiums on time and improve your financial status.
