Are there ways to reduce my premium if I am deemed a substandard risk?
My premiums are high because my insurance company has deemed me a substandard risk. Is there anything I can do to lower them?
Good news! Yes, there are ways to lower your premiums if you are deemed a substandard risk.
The simple answer is good news - yes! But, first, what is a substandard risk?
A substandard risk as a term in the insurance industry for a person with a risk below average or impaired due to a dangerous hobby, health condition, disease history or living in unhealthy areas. A substandard risk is also called an impaired risk. There are several types of insurance that can be deemed substandard or high risk, for example, life, auto or home.
Always check with your insurance company or broker about ways that you can save on your insurance if you are deemed a substandard risk. They will often have ways to save you some money, or be able to offer ideas on what you can work towards changing to bring your perceived risk to insurance companies down.
For the sake of this question, let's take a look at a high-risk homeowner’s insurance. High-risk homes typically have higher premiums compared to preferred risks.
A home with a Poly-B (polybutylene) plumbing for example, is considered a substandard risk by most insurance companies, because it has a higher chance of bursting or leaking, and some insurance companies might even refuse to insure homes with this type of plumbing.
Here are a few ways you can reduce premium on a high-risk home:
Replacing your pipes: if you have poly-b pipes, replacing it with other types of pipes might reduce your premium.
Increasing your deductible: the higher your deductible, the lesser your premium. Increasing your deductible lowers your premium, however, you might also want to evaluate your financial situation, to see how much, you are willing to pay out of pocket when a claim arises.
Burglar and fire alarm: if you have these home security systems, make sure that your insurance company is aware, as some insurance companies offer discounts for this.
Roof Update – if you have a newer roof, check with your insurance company to make sure that they have the right year that your roof was updated in. Having a newer roof could help reduce your premium.
Water Damage Prevention System – Having a system like a backwater valve could save you some money, as some insurance companies offer discounts for this type of systems.
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