What is High Risk Home Owner Insurance?

For some people finding home owners insurance can become quite a headache. They find that they are having trouble getting approved or the monthly premiums are higher then they are normally used to. One reason this can happen is either the owners or the home itself has been designated as high risk. Which ever the case there are several issues which can cause a home owner to purchase high risk insurance and there are things that can be done to help minimize the cost.

The location of the home to be insured can have much to do with whether it is labeled as high risk or not. If it is located in a high crime area or an area known to be frequented by vandals then chances are the monthly premiums will be higher then a comparable home in a different neighborhood. Insurance companies track this type of information and will adjust their rates based on the amount of claims they may get from a certain area.

If you live in such a neighborhood then there are certain things you can do to decrease the risk rating of your home.

• Have a security system installed that is hard wired back to a central call center. This makes sure that someone will always be aware when the alarm goes off and can notify the right authorities.

• Have heavy duty locks installed, particularly dead-bolts. If you have a basement be sure that all windows and doors are secured with the appropriate locking devices as well.

• Keep expensive jewelry and other valuable items in a safety deposit box.

Weather and the higher occurrences of natural disasters such as floods, earthquakes, tornados, and hurricanes can also have an effect on home owner insurance rates. If you live in an area prone to these types of conditions your insurance rates will be higher. It is also important to double check with your insurance provider to make sure that you home owners policy does in fact cover this type of disaster. For instance almost all home insurance does not cover flood damage or destruction. Flood insurance must be purchased as a separate policy for anyone who lives in a flood zone. Your current insurance provider can point you in the right direction when it comes to these types of policies.

Another area that may place you in the high risk home owner insurance bracket is how many claims have been filed on the home in question. This is something that new home buyers need to be aware of. Before purchasing a house be sure to get quotes on what the home owners insurance costs will be. Make sure to find out if previous claims have been filed on the house and what they were for. If it's a reoccurring problem it may be best to pass on the house. In most cases if two or more claims are filed within one year the home will be classified as high risk, driving up the insurance premiums.

An area that many people are unaware of but can place you in the high risk category is a bad credit rating. This is something that can be improved over time by improving your credit score. This is the one thing that a home owner has complete control over.

While high risk homeowner insurance will undoubtedly cost more then regular insurance it is important that you purchase insurance to protect your home and family against unforeseen damage that may occur. Even if you fall into the high risk category be sure to shop around to find the lowest rate that adequately protects your investment.