Here's what to do if you were rejected for homeowners insurance (2024)

Homeowners insurance is the best way to protect your biggest investment.

There are many different reasons a carrier might turn you down, some of which have to do with you and some with the home itself.

High-risk location

If your house is in an area plagued by tornadoes or wildfires, a carrier may consider it too great a risk to insure. The same may be true if your neighborhood experiences a lot of crime.

You may be able to mitigate some of that risk by installing security devices or weatherproofing. Check with an insurance professional to see what improvements could help.

Potential hazards

The very thing that made you fall in love with your home — a swimming pool, wood-burning stove or treehouse, for example — could make it harder to get coverage if an insurer considers it a fire hazard or other risk.

Age of home

Older homes are more prone to problems, from leaky roofs to outdated plumbing or wiring. If a residence hasn't been sufficiently maintained over the years — if there hasn't been "pride of ownership" — it can make a company wary of insuring it.

Low insurance score

In most states, insurers can consider your credit history when deciding whether to insure your home and when calculating your monthly premiums. (California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah either prohibit or greatly restrict credit-based insurance decisions.)

Similar to your FICO credit score, your insurance score is based on your payment history, credit mix, the length of your credit history and other financial factors.

A score of 500 or less is considered poor and may result in your being turned down.

Lapsed coverage

If you let a previous homeowners policy lapse, it could hurt your chances of getting a new policy. Insurers may worry you'll let your new policy lapse, too.

Previous claim history

Carriers typically look at the history of claims on a given property — if there have been a lot of payouts for foundation repair, for example, it might suggest a more serious structural problem.

In addition, If you've filed a lot of claims on a previous homeowners policy, it could also count against you.

Part-time occupancy

Insurance companies want to know that there's someone at home to look after the property. If it isn't your primary residence — like, say, a beach house or ski condo — you might have a harder time getting coverage.

Just because you've been turned down, doesn't mean you won't be able to get coverage. The important thing is to find out why and try to rectify the problem.

Ask why you were rejected

Ask neighbors and previous owners

If the location of your home is why you can't get a policy, ask people in the neighborhood what carrier they use. If you recently bought the home, your real estate agent may be able to find out who previously insured the house.

Shop around for coverage

Just because one carrier turned you down doesn't mean they all will. If you've been rejected, try getting quotes from at least three other insurance companies.

Nationwide is one of the largest home insurers in the U.S., with high marks for its customizable policies and numerous bundling discounts.

You can also check with your state's Department of Insurance to see which companies are available in your area.

Consider a FAIR plan

If you've been turned down several times, see if your state is one of the more than 30 that offers Fair Access to Insurance Requirements (FAIR) plans, which enable high-risk homeowners to get insuranced.

Get modified coverage

Take out a surplus line policy

Surplus line insurance covers properties with unique risks that traditional carriers "can't or won't insure," according to the Texas Department of Insurance. Typically a state will allow a surplus line company, like Lloyd's of London or Berkshire Hathaway, to operate in its borders while unlicensed. (The company must be licensed in its home state or country, however.)

Most surplus line policies are taken out by businesses, but a homeowner who has made an effort to work with a standard insurance company and received three to five rejections may qualify, according to the Insurance Information Institute.

Surplus line policies may have more exclusions and higher deductibles than a standard one. In addition, your claim could go unpaid if the insurer becomes insolvent.

Work on your improving your credit

In states that allow insurance companies to consider your credit, your history of on-time payments accounts for 40% of your insurance score. So consider automating payments and, if possible, paying the full balance each month.

Other criteria include your amount of outstanding debt (30%), how long you've had credit (15%), credit mix (5%) and whether you've applied for lines of credit recently (10%).

eCredable LiftLocker®is a paid service that sends information about on-time utility payments to TransUnion, one of thethree major credit-reporting agencies, which can help you build credit. For $14.95 a month, you also receive a copy of your TransUnion credit report every month, plus identity theftalerts and other benefits.

Unlike car insurance, home insurance is not required by federal or state law. If you have a mortgage, however, you're usually required to have a policy.

Even without a mortgage, foregoing insurance is a risky move. Without it, you'll have to pay out of pocket for any damage to your house or possessions. You'll also be on the hook if you're held responsible for someone else's injuries on your property or if you cause damage to someone else's home.

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