High Risk Home Owners Insurance

Getting slapped with a “high risk” label doesn’t mean your home is a disaster—it means insurers think you might cost them money, and suddenly your premiums triple while coverage options vanish. But here’s what they won’t tell you: most homeowners escape this trap within 36 months by fixing three specific things and knowing exactly which specialty carriers still want your business. Learn the real numbers, the actual fixes that drop your rates, and the tactical moves that get you from “denied” to “approved” faster than you think here.

High Risk Homeowners Insurance: Get Coverage When Others Say No

Your home doesn’t need to be falling apart to be deemed high risk. Living in flood zones, filing multiple claims, or having outdated heating systems—that’s enough to land you in the high-risk homeowners insurance market. That’s where insurance companies refuse you outright, your home insurance costs jump 150-300%, and finding basic insurance products becomes a nightmare.

But even when private insurers won’t touch your postal code, you can still protect your most valuable asset. Here’s how high-risk home insurance actually works in Canada, what you’ll pay, and how to get out of the high-risk category.

Key Takeaways

• High-risk homeowners’ insurance costs 150-300% more than standard policies, with deductibles jumping from $1,000-$2,500 to $5,000-$10,000
• Flood zones, roofs over 20 years old, and two claims within 36 months are the fastest ways to get flagged or denied by insurance companies
• Replacing your roof, upgrading electrical panels, and modernizing plumbing can cut premiums 15-25% within 12 months and unlock standard market access
• Fair Plan insurance covers basic fire and wind damage but excludes theft, liability, contents, and water damage—forcing you to buy multiple policies
• Specialty insurers like Facility Association and RSA Canada accept poor credit and claims history that disqualify you from standard coverage
• Most homeowners return to affordable coverage within 36 months by documenting upgrades, avoiding new claims, and requesting formal risk reassessments
• Never let coverage lapse for even 24 hours—gaps reset your claims-free discount to zero and make you look riskier to new insurers

What Is High Risk Homeowners Insurance?

High risk home owners insurance is not a separate product. It describes how insurers classify properties with expected claims well above average.

Your home falls into this category if it sits in a flood plain, wildfire zone or severe storm corridor. Past claims history matters too. Multiple water damage events or a single catastrophic loss can push you into high-risk pricing. Insurers use actuarial models to assign risk levels. Properties in the top tier pay substantially higher premiums or lose coverage entirely.

Canada lacks a unified high-risk pool like American FAIR Plans. Instead, standard insurers absorb most residential risks but increasingly refuse to cover the worst exposures. The federal government now plans a public-backed flood program to fill this gap, but implementation remains incomplete.

What Makes a Home High Risk?

Insurance providers flag homes they think will cost them money. Several factors can get your property considered high risk:

Location Problems:

• Flood zones add 40-85% to your home insurance premiums right away
• Wildfire areas within 2km of forest boundaries
• High-crime neighborhoods where theft is common
• Coastal properties that get hammered by storm damage

Property Condition Issues:

• Roofs over 20 years old (automatic 25-40% surcharge in most provinces)
• Old wiring like knob-and-tube or aluminum (60% of insurers won’t touch it)
• Ancient plumbing systems—galvanized steel, lead, or polybutylene pipes
• Previous water damage, foundation cracks, or mold problems

Your Claims History and Money Issues:

• Two or more insurance claims in 36 months (triples your chance of getting rejected)
• Non-payment or missed payments on your old homeowners’ insurance policy
• Poor credit under 650 (standard market won’t take you)
• Previous cancellation for lying on your application

Other Red Flags:

• Vacant homes sitting empty for more than 30 days straight
• Vacation homes or rentals you’re not living in full-time
• High-value homes needing more than $2M in replacement cost coverage
• Owning an aggressive dog breed (German Shepherds, Rottweilers, Pit Bulls)

Once you’re flagged, many homeowners get dropped or denied by the private market. Finding new insurance coverage? Plan on 45-60 days of searching.

What Does High Risk Home Insurance Cover?

High-risk insurance policies cover the basics—fire, theft, lightning, and wind. But there are major gaps compared to standard home insurance.

What You Get:

• Named perils coverage (fire, explosion, theft, vandalism)
• Personal liability coverage (usually capped at $1M instead of $2M)
• Coverage for detached structures and basic contents

What You Don’t Get:

• Flood insurance and overland water (you need a separate federal policy for that)
• Sewer backup unless you pay $150-$300/year extra
• Extended replacement cost guarantees (limited to 110% instead of 125-150%)
• Earthquake coverage in BC and Quebec (costs extra as a rider)
• Coverage for jewelry, art, or electronics worth over $5,000

The Big Problem: Most high-risk policies pay actual cash value, not replacement cost coverage. Your 15-year-old roof costs $18,000 to replace, but they’ll only pay $7,200 after depreciation. You’re eating the $10,800 difference.

Pro Tip: Stuck with actual cash value? Take photos of every major system and renovation. Document the ages and condition of every year. This proof helps when you’re fighting for a better claims settlement and shows you’ve made home improvements that might get you better coverage options later.

What’s Not Covered in High Risk Policies?

Watch for: Overland flooding is uninsurable in Canada’s highest-risk areas through private markets. About 10% of Canadian homes, roughly 1.5 million residences, cannot obtain affordable flood coverage. If your home falls in this group, you rely on provincial disaster assistance with strict caps.

Basement flooding has limited or no coverage in repeat-loss properties. Flood sub-limits may apply even when endorsements exist. Earth movement, gradual seepage and wear-and-tear remain excluded unless specifically endorsed. Some policies now exclude certain perils entirely in the most exposed zones rather than offering them at higher prices.

Provincial disaster assistance fills some gaps but comes with lifetime caps. New Brunswick limits structural damage assistance to $200,000 per property per disaster type. Quebec caps lifetime flood support at $100,000. Alberta allows one-time assistance up to $500,000 regardless of ownership changes. Once you hit these caps, future losses are your responsibility.

What Is the Average Cost of High Risk Home Insurance?

Climate-related incidents add about $409 per year to average Canadian home insurance premiums compared to costs without recent climate-driven losses. That figure represents a national average. High risk homeowners in heavily exposed areas pay far more.

Between 2021 and 2025, Alberta homes in high-loss postal codes saw premiums jump 57.5% versus 43.4% in lower-loss areas. British Columbia high-loss zones experienced 67.6% increases compared to 63.3% elsewhere. Prince Edward Island high-risk areas saw 54.6% growth against 43.4% in safer zones.

Risk-based flood premiums in the highest-exposure zones can exceed $10,000 to $15,000 annually for flood coverage alone, on top of your base home premium. Standard policies in moderate-risk areas cost a few hundred dollars extra for flood endorsements. The gap between high-risk and standard pricing continues widening as catastrophe losses mount.

Deductibles also rise sharply. Hail deductibles in Alberta reach $10,000 in exposed zones. Flood deductibles often start at minimum thresholds to discourage small claims. Combined, higher premiums and deductibles mean high risk homeowners insurance can cost triple or quadruple standard rates.

Why High Risk Home Insurance Costs More

Home insurance costs for high-risk properties in Canada shot up 30% every year since 2021. Here’s why:

The Weather’s Getting Worse: Canada saw $8.5 billion in insured losses from natural disasters in 2024. Wildfire damage in BC and Alberta alone hit $3.1 billion. Every dollar in extreme weather losses jacks up what you pay by 8-12 cents.

Everything Costs More to Build: Lumber prices jumped 62% from 2020-2024. Replacing a 2,000 sq ft home now runs $350-$450/sq ft in major markets—up from $220-$280 in 2019. Insurance companies price your homeowners’ insurance policy against these rebuild costs.

Companies Are Bailing Out: Big private insurers stopped writing new policies in high risk areas. Intact, Aviva, and TD Insurance pulled out of 140+ postal codes across BC, Alberta, and Atlantic Canada between 2022-2024. Fewer companies competing means higher premiums for you.

What You’ll Actually Pay (2,000 sq ft home, $500K coverage, Alberta):

• Standard market: $1,800-$2,400/year
• High-risk home insurance: $4,200-$7,500/year
• Fair plan insurance: $3,800-$5,200/year (bare-bones coverage only)

Your deductibles climb, too. Standard policies run $1,000-$2,500 deductibles. High risk insurance hits you with $5,000-$10,000 deductibles, plus separate 2-5% deductibles for wind, hail, or water damage.

Can You Get Out of High Risk Home Insurance?

Yes, but you need documented upgrades and typically 24-36 months without filing an insurance claim. Here’s what actually drops your home’s risk level:

Quick Wins (cuts your premiums within 12 months):

• New roof with impact-resistant shingles: 15-25% off your rate
• Electrical panel upgrade from 100A to 200A: gets you back into standard coverage
• Full plumbing replacement with copper or PEX: removes the automatic decline
• Central monitoring system for fire, CO, and break-ins: 5-15% discount
• Backwater valve installation: lets you add sewer backup coverage

Longer Fixes (takes 36+ months to see full effect):

• Foundation waterproofing and better drainage
• Hurricane-rated or triple-pane windows and doors
• New furnace and HVAC (anything under 15 years old)
• Whole-home surge protection
• Wildfire defensible space (clearing 30-100 feet of brush)

What You Need to Prove It: Keep certified inspection reports, contractor invoices, and building permits. Your insurance agent needs proof stamped by licensed pros. Phone photos aren’t enough for a real risk reassessment.

Pro Tip: Ask for a formal risk reassessment in writing 18 months after big upgrades. Send a complete package with inspection reports, receipts, and photos. This forces the insurance provider to actually review your file instead of auto-renewing you at high-risk rates.

How to Reduce Your Home’s Risk Profile

Backwater valves prevent sewer backup during heavy rain. They cost a few thousand dollars installed but can eliminate repeat water claims. Sump pumps with battery backup keep basements dry during power outages. Re-grading your lot to direct water away from the foundation cuts flood severity.

Wildfire mitigation requires clearing vegetation within 10 metres of your home. Use non-combustible materials for decks and siding. Install ember-resistant vents. These steps reduce ignition risk during interface fires. Some high risk homeowners insurance companies lower premiums when you provide proof of FireSmart certification.

Roof upgrades matter in hail zones. Impact-resistant shingles cost more upfront but reduce damage severity. Upgrading electrical panels and replacing old plumbing lowers fire and water risks. Document all improvements for your insurer. Premium reductions may take effect at renewal.

What to Do If Insurance Companies Deny You

If three or more insurance providers say no, you’ve got three moves:

Option 1: Specialty High Risk Insurers Find an insurance agent who works with non-standard markets. These carriers take on high-risk situations:

• Facility Association (Alberta, BC, Ontario)
• Parachute Insurance (Manitoba, Saskatchewan)
• RSA Canada Specialty Solutions
• Echelon Insurance (Ontario, Atlantic provinces)

They’ll accept poor credit, a messy claims history, and property conditions that knock you out of standard coverage. You’ll pay 180-250% more than standard rates, but you get better coverage options than Fair Plan insurance.

Option 2: Fair Plan Insurance (Last Resort) Available in BC, Alberta, Ontario, and Manitoba when the private market shuts you out. Fair Plans give you basic property insurance covering fire, lightning, explosion, and limited wind.

What Fair Plan Doesn’t Cover:

• Theft, vandalism, or liability (buy a separate policy for this)
• Contents or personal stuff (structure only)
• Flood insurance, sewer backup, or water damage
• Hotel costs while your place gets fixed

Fair Plan rates are regulated but still expensive—usually $3,800-$5,200 per year for $500K coverage. Most people add a separate contents and liability policy on top, tacking on another $800-$1,200/year.

Option 3: Go Without (Cash Buyers Only) Own your home outright with no mortgage? Legally, you don’t need insurance. But this leaves you totally exposed if something happens. Only makes sense for properties under $200K where you could cover a total rebuild from savings.

High Risk Homeowners Insurance Companies & Options

Canada lacks a unified high-risk pool, so high risk homeowners insurance companies operate within the standard market using specialty underwriting. Some national carriers maintain high-risk divisions. Regional insurers sometimes accept exposures that larger companies decline. Brokers access these markets more easily than direct-to-consumer channels.

The proposed federal flood program will create a public reinsurance layer backing private insurers who offer flood coverage to high-risk homes. This model uses subsidies and caps to maintain affordability while gradually moving toward risk-based pricing. Means-testing may limit eligibility to lower-income households initially.

Some provinces are exploring high-risk pools for specific perils. Industry and regulatory discussions mention pool structures for flood and wildfire risks. No formal assigned-risk market exists yet for all perils combined.

How to Handle High Risk Insurance (Smart Strategies)

If you’re dealing with limited coverage options, here’s what matters most:

What to Fight For:

1. Push hard for replacement cost coverage, even at 25% higher cost—actual cash value leaves you badly underinsured
2. Add flood insurance if you’re in mapped flood zones ($400-$800/year through the federal program)
3. Get the highest personal liability limits they’ll give you (minimum $2M for rental or vacation homes)
4. Never let coverage lapse—even 24 hours without an insurance policy resets your claims-free discount to zero

Ways to Save Money:

• Bump your deductible from $2,500 to $5,000: saves 12-18% per year
• Bundle home and auto: unlocks 15-25% off with most companies
• Pay the full year upfront: skips the 6-8% monthly payment fees
• Keep your record clean: earns back 5% per year (maxes at 25% after 5 years)

For Vacant Homes, Regular homeowners’ insurance stops covering you after 30 days empty. You need specialized vacant home coverage—it costs 2-3x normal rates but stops your claim from getting totally denied. Never leave a property uninsured during renos or between tenants.

High Risk Home Insurance in Canada: What Changes by Region

British Columbia: Home insurers now use satellite photos to check wildfire risk on a 100-meter grid. Properties in “extreme” fire zones get hit with automatic 60-120% surcharges or flat-out denial. Over 340,000 BC homes are now classified as high-risk area properties.

Alberta: Hailstorm losses topped $2.8 billion from 2020-2024. Insurance companies now require impact-resistant roofing for any home north of Calgary built before 2015. Don’t have it? They won’t renew you.

Atlantic Provinces: Hurricane Fiona caused $800M in insured losses in 2022. Coastal properties within 5km of the ocean now face 40-75% premium hikes and mandatory 5% wind/water deductibles.

Ontario: New rules starting January 2025 force insurers to tell you in writing why they classified you as high risk. You can challenge it and demand a formal review every year.

Final Thoughts: Moving Out of High Risk Status

Stop thinking expensive, high-risk insurance is permanent. Here’s your way out:

1. Check what insurers actually see about you through AutoPlus (free report shows your full claims history)
2. Get a certified home inspection that lists every fixable risk factor
3. Fix the Big 3 first: roof, electrical, plumbing systems—these three unlock access to standard home insurance
4. Keep every receipt, permit, and dated photo of work you do
5. Get new quotes every 12 months from multiple insurance agents—your situation improves faster than their computer systems update

Most people move from high-risk insurance back to affordable home insurance within 36 months of targeted fixes. The trick is treating this coverage as temporary while you knock out the problems that got you flagged in the first place.

Do it right, and you’ll get access to affordable coverage and lower premiums—even while many homeowners in your high-risk property area are getting squeezed out completely.

FAQ

What is considered high risk in home insurance?

Homes in flood plains, wildfire zones or hail corridors qualify as high risk. Properties with repeated claims, especially water damage, also fall into this category. Location drives most classifications.

What are high risk items in home insurance?

Finished basements in flood-prone areas, older electrical systems, outdated plumbing and properties near wildfire interfaces are high-risk items. Short-term rental use can also increase risk classification.

How much does high risk home insurance cost?

Premiums in high-loss areas rose 38% to 68% between 2021 and 2025 depending on province. Flood endorsements alone add $10,000 to $15,000 annually in extreme-risk zones.

Can I still get home insurance if I’m high risk?

Yes, but availability varies by location and peril. Standard insurers may deny coverage in the highest-risk areas. Specialty carriers and brokers help place difficult risks. Federal flood programs are coming.

How long does it take to move out of high risk category?

Three to five claims-free years typically improve your risk rating. Mitigation measures can shorten this timeframe. Location-based risk classifications change only if hazard exposure decreases through infrastructure improvements.

Disclaimer: This blog post is for general information only and does not constitute personalized advice. Please consult a licensed insurance broker to determine the insurance solution that best fits your specific needs.