Updated: November 1, 2024
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Securing homeowners insurance for homes requiring repair is achievable, though it often comes with increased premiums and restricted coverage choices. For properties considered high-risk due to their condition, specialized insurance policies or FAIR (Fair Access to Insurance Requirements) Plans offer tailored solutions. These options specifically cater to the needs of homes in disrepair, balancing the higher risk they present with appropriate coverage.
Purchasing homeowners insurance for homes in need of repair is possible, but may come with limited coverage options and higher premiums.
Specialized insurance policies, such as FAIR Plans, provide viable alternatives for insuring high-risk or repair-needy homes.
In some cases, homes in need of repair can secure insurance without a new inspection, particularly if recent inspections are available.
While you can purchase homeowners insurance for homes in need of repair, insurance companies generally view homes in need of repair as higher risk. Therefore, your options for insurers may be limited, and the premiums may be higher compared with homes in good condition. Policies for homes in need of repair also might have more exclusions and limitations. For example, they might not cover damages that are a direct result of the existing disrepair.
Because of the increased risk, insurance companies may require a home insurance inspection before issuing a policy. Based on the inspection, they might ask for certain repairs to be made as a condition for providing coverage.
Homeowners insurance is available for older homes, but it may come with specific considerations. Older homes can be more expensive to insure due to the increased risk of problems related to age and outdated construction.
Insurers might require a home inspection to assess these risks and might also recommend or require updates to electrical, plumbing or HVAC systems. Shop around for policies that cater to older homes to find suitable coverage.
When traditional homeowners insurance is difficult to secure for homes in need of repair, specialized options are available. Fair Access to Insurance Requirements (FAIR) plan and renovation coverage are available for such homes. These tailored insurance solutions cater specifically to the unique needs of properties that don't fit the standard underwriting criteria.
The FAIR Plan is a state-mandated program designed to provide insurance to properties that are considered high-risk and often rejected by standard insurers. For instance, if you live in a coastal area, where homes are frequently denied coverage due to storm risk, you can obtain insurance through the FAIR Plan. It's most beneficial for homeowners who have been repeatedly turned down by traditional insurers due to the condition or location of their property.
Renovation coverage is a type of insurance specifically designed for homes undergoing repairs or renovations. It covers risks associated with the renovation process. During a major kitchen remodel, if a pipe bursts, causing water damage, renovation coverage would help cover the costs. This coverage is ideal for homeowners actively improving or repairing their homes, particularly when these changes involve significant structural or system updates.
Obtaining homeowners insurance for homes in need of repair may not always require a new inspection, particularly if a recent inspection was conducted during the purchase or acknowledged by a previous insurer within the last year. However, for homes with evident repair needs, insurers often require an inspection to assess risk. Consult your insurer to understand if an inspection is mandatory in your situation.
Finding insurance for homes in need of repair requires a bit more effort but is achievable. Start by contacting insurance agents or brokers who specialize in high-risk properties or non-standard insurance. Then compare homeowners insurance quotes from various providers to find which one is most suitable for your needs and budget.
Contact Specialized Agents
Reach out to insurance agents or brokers experienced in high-risk or specialized insurance policies.
Provide Detailed Information
Be ready to give comprehensive details about the home's condition and any planned repairs.
Compare Multiple Quotes
Obtain and compare quotes from different insurers to evaluate coverage options and premiums.
Consider Pre-Application Repairs
Making key repairs before applying for insurance may increase the likelihood of coverage and potentially reduce premiums.
Homes in need of repair can get homeowners insurance through several options. This includes standard and specialized policies tailored to higher-risk properties. We answered frequently asked questions to help navigate getting specialized policies, providing insights into options like FAIR Plans and the potential for insurance without a new inspection.
Yes, you can get homeowners insurance for homes in need of repair, but it often involves specific considerations. These homes are generally seen as higher risk, so insurance options may be more limited, and premiums could be higher. Specialized policies, such as FAIR Plans, are designed for such situations, offering coverage where traditional policies might not.
Homeowners insurance for older homes is also available, though it typically requires careful consideration of the home's age and condition. Older homes might be more expensive to insure due to potential risks associated with outdated construction and systems. Insurers may require a thorough inspection and could recommend updates to electrical, plumbing or HVAC systems to ensure safety and reduce risk.
Absolutely, having homeowners insurance during construction is essential. It provides protection for your existing home and any new additions against risks such as fire, theft, vandalism and other potential hazards that can occur during the construction process. Without adequate coverage, you could face significant financial losses if something goes wrong. To ensure comprehensive protection, discuss your construction plans with your insurance provider and make necessary adjustments to your policy.
About Mark Fitzpatrick
Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.
Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.
