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Securing home insurance for high-risk properties will be challenging due to factors like location, property condition, and claims history. Understanding challenges and exploring available options, such as FAIR Plans and risk mitigation strategies, will help homeowners obtain necessary coverage.
Some homes are harder to insure. Maybe it’s the location. Maybe it’s the old plumbing. Maybe it’s the fact that three claims got filed last year. If your home is labelled high risk, you’re not alone—and you’re not out of options. This guide is for homeowners who’ve searched “home insurance for high risk properties” and need answers that actually make sense.
Home insurance for high risk covers properties with higher probability or severity of loss than typical homes. Insurers calculate this through underwriting models weighing location exposures, property characteristics and owner history. Public Safety Canada defines the highest flood-risk properties as the top 10% by average annual loss, where yearly expected flood damage hits at least $262. For the top 1%, that number jumps to $4,150 annually.
You need this coverage if your home sits in a floodplain, wildfire interface zone or earthquake region. You also need it if you’ve filed multiple water or fire claims. Standard insurers either decline these properties or price them out of reach. High-risk markets step in with modified coverage at higher rates.
Three categories push properties into high-risk status. Location matters most, but property condition and claims history also drive classifications.
Flood exposure concentrates heavily in three provinces. Quebec has 489,605 addresses in the national top 10% for flood risk, BC has 278,617 and Ontario has 407,754. In BC, 14.14% of residential properties fall into this highest-risk group. Manitoba, New Brunswick and Quebec each show 13–15% of homes in this category
Wildfire costs hit hardest in Alberta and BC. Fort McMurray’s 2016 fire caused $3.58 billion in insured damage, Canada’s costliest natural disaster at that time.
The 2023 Bush Creek East and McDougall Creek wildfires generated $730 million in insured losses, BC’s costliest weather events until then. Homes near dense forests, on steep slopes or with limited road access get flagged as high-risk.
BC’s earthquake exposure drives higher premiums province-wide. Earthquake coverage take-up in BC is significantly higher than other provinces, reflecting this risk.
Insurers price risk based on home type, age, condition and heating systems. Older homes with knob-and-tube wiring, wood-burning stoves or outdated roofs face higher rates. Distance to fire hydrants and fire halls also affects pricing (source).
How you use your property matters as well. Properties used as short-term rentals, student housing, home-based businesses, or containing unauthorized suites typically fall into non-standard insurance markets, since insurers view these occupancies as higher risk.
Water damage drives Canadian home insurance costs more than any other peril. Premiums increased 20–25% over the five years leading to 2022, largely due to climate-related water and weather losses. Repairing a single flooded basement can cost about $43,000.
Having multiple prior water or fire claims at the same address moves policyholders into high-risk tiers. This often results in surcharged premiums, higher deductibles, or even non-renewal. Severe weather in 2023 caused more than $3.1 billion in insured damage nationwide.
Insurers lose money on high-risk properties in catastrophe-prone regions. Alberta’s home insurers paid out approximately $1.20 in claims and expenses for every $1 of premium earned in 2024. That loss ratio prompted some providers to exit the market entirely, limiting consumer options.
The top 10% of riskiest homes account for about $2.65 billion of Canada’s $2.97 billion in annual residential flood damages—89.3% of all flood losses. Standard insurers can’t profitably cover these properties at affordable rates. Many simply refuse coverage.
Watch for: Properties with three or more water claims in five years often can’t get standard market coverage at any price.
Risk drives price. If an insurer thinks your property will cost them more in the long run, they raise the price—or walk away entirely.
High risk homeowners insurance comes with higher premiums. Some insurers won’t offer full property coverage or will add exclusions for water damage or roof collapse.
Common price factors include:
High risk home insurance is still available in most cases. But you’ll likely face fewer choices and higher home insurance costs.
Overland flood coverage isn’t part of standard home insurance. You must purchase it separately, sometimes branded as inland flood or enhanced water damage coverage. Public Safety Canada confirms the market fails to cover Canadians in high-risk areas, leaving a protection gap for the highest-risk households.
Sewer backup coverage is optional in many policies. Earthquake insurance is generally excluded from standard policies and offered as a separate policy or endorsement. This is especially relevant in BC and parts of Quebec.
Very high-risk properties face specific peril exclusions. For example, a wildfire-interface home with prior fire losses might get coverage for everything except wildfire. Properties with repeated flood claims often can’t buy flood coverage at all.
Catastrophe endorsements frequently carry 2–5% deductibles of your home’s insured value. For a $600,000 dwelling, that’s $12,000 to $30,000 per event.
Alberta has Canada’s highest property premiums per home, reflecting devastating natural catastrophes and severe underwriting losses. British Columbia also shows elevated and faster-rising premiums, linked to earthquake exposure and high earthquake coverage take-up.
Canadian personal property premiums are high by international standards and have risen substantially between the 2015–2018 and 2020–2022 periods. High-risk properties in loss-stricken provinces face disproportionate rate increases.
Public Safety Canada uses an affordability benchmark for flood insurance. A high risk home insurance customer is one whose flood premium would exceed 0.1% of coverage amount—more than $300 annual premium for $300,000 of flood coverage. This threshold implies about 10% of households fall into the unaffordable category without subsidies (source).
Premiums increased 20–25% over five years ending in 2022, driven by climate-related water and weather losses. Expect continued increases in catastrophe-prone regions.
It’s frustrating to get turned down for coverage, especially when you’ve already paid off part of your mortgage or invested in your property. But being denied by one insurer doesn’t mean you’re out of luck.
Shopping around also matters. Just because one insurer says no doesn’t mean another will. Each company evaluates risk differently. One might see your claim history as a red flag, while another focuses more on the age of your plumbing.
Specialty insurers operate across Canada for properties that standard markets reject. These companies price risk differently and accept homes others won’t touch. You’ll pay higher premiums but get coverage.
The federal government is partnering with the property and casualty industry to launch Canada’s first national flood insurance program. Budget 2023 committed $31.7 million over three years to Public Safety Canada and CMHC to develop low-cost national flood insurance for high-risk residential properties (source). This program targets households at high risk of flooding that standard insurers decline.
Independent brokers have access to multiple high risk home insurance providers and specialty markets. They know which insurers accept specific property types and risk profiles. A broker can place your coverage when direct-to-consumer insurers decline you.
Provincial markets vary. Some provinces have facility associations or residual markets for hard-to-place risks. Ask your broker about all available options in your province.
Compare multiple specialty insurers through an independent broker. Brokers see rates across markets and know which companies accept your specific risk profile. Don’t stop at one quote.
Fix addressable risks before applying. Replace knob-and-tube wiring, install a monitored alarm system or upgrade your heating system. These improvements directly affect pricing. Get quotes before and after improvements to see the premium difference.
Provide complete documentation upfront. Insurers want proof of improvements, inspection reports, claims history and property details. Missing documentation slows approvals. Gather everything before you apply.
Consider higher deductibles to lower premiums. A $5,000 deductible costs less than a $1,000 deductible. Calculate what you can afford to pay out-of-pocket versus your monthly premium savings.
Some factors, like location, can’t be changed. Many others are within reach. Start with the systems. Update electrical wiring from the 1960s. Fix an old furnace barely passing inspection. Replace a roof leaking every spring. Even small upgrades like smoke alarms or water sensors make the home safer and less risky to insure.
Avoid filing minor home insurance claims if you can afford the repair out of pocket. Too many claims, even small ones, add up and stay on your record. Insurance companies look for patterns—and if they see a trend of frequent claims, they may see your property as unmanageable.
Also, pay attention to your financial history. A poor credit score or history of missed payments will impact your ability to secure homeowners insurance. Paying premiums on time and keeping coverage active improves your file over time. Consistent payment history shows insurance companies you’re dependable and less risky to insure.
Homes are deemed high risk due to location, claims history, or outdated systems. Insurers use data from the home insurance market and payment history to assess the chance of future losses.
Yes, there are property insurance providers who offer specialized coverage options for homes labelled high risk. You may pay higher home insurance premiums, but coverage is still possible.
Improving your home’s condition and maintaining a strong payment history will help lower premiums. Updating old systems and installing safety features will also expand your coverage options.
High risk property insurance includes basic insurance coverage like fire or theft but may exclude certain events like flooding. Always compare coverage options to understand what’s included.
The home insurance market has fewer providers for high risk homes, which limits options. However, more insurers now offer flexible property insurance plans designed for specific risk profiles.
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.
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