Last updated on: October 19, 2022
If you want to protect yourself and your property, you should invest in high-quality insurance. Ideally, you can qualify for competitive rates from different providers, which means you get the best protection at a relatively low rate.
But what if you’re at higher risk? Most standard insurance companies will not want to cover you because they think you are too much of a burden. Fortunately, non-standard insurance can help fill in the gaps, although you’ll have to pay more for the same coverage.
If you feel you need non-standard insurance, or just want more information on how it works, here’s everything you need to know.
What is special insurance?
Non-standard insurance is coverage for people who are considered high-risk. This type of insurance is most common with auto insurance companies, as some drivers may have multiple violations or accidents on their records. However, individuals can also get non-standard homeowners and health insurance if they know where to look.
Because these policies are designed for high-risk policyholders, they often have less coverage and higher rates. However, policyholders often find ways to minimize their risk in a way that later qualifies them for standard insurance. For example, if you have several collisions in your driving record, most companies will no longer consider them after five years (sometimes less). So if you reapply for standard insurance after this period, you may qualify.
List of non-standard insurance companies
If you’re looking for a non-standard insurance plan, you might not know where to look. Here’s a list of the top auto, home, and health insurance providers, in case you need them.
Non-standard home insurance companies
Most single family homes qualify for standard insurance, but there are several situations where you may need to look for non-standard options, such as:
- elderly home – Homes older than 50 years may be at much higher risk as they were not built to modern codes. Normally electrical systems can be dangerous and unseen problems such as foundation damage or heavy mold growth can occur.
- flood risk – The National Flood Insurance Program (NFIP) offers flood insurance for all properties. However, in areas where flooding is common, standard insurance providers do not cover these homes.
- natural disasters – If you live in Florida, you probably need to get insurance from Citizens Insurance, which is the “insurer of last resort.” Other states such as California offer state sponsored plans since natural disasters are far more common in those areas.
- Wooden structures (i.e. huts) – Modern building codes use fireproof materials to protect the structure if a fire breaks out. However, wooden buildings such as cabins are a far higher risk, so many insurers do not cover them.
- Vacant and vacation rentals – If you own a property that has been vacant for 30 days or more, you may not qualify for standard homeowner insurance. Instead, you’ll need to take out a non-standard policy that covers basic damage like fire and vandalism.
Here are some top providers of non-standard household insurance:
Non-standard auto insurance companies
Non-standard auto insurance is far more common because it’s relatively easy for drivers to take non-standard risks (more on that later). Some reasons you might need this type of coverage are:
- Multiple Violations – These can be speeding tickets, motion violations (e.g. red light camera) or other subpoenas. Too many of them and you are considered a risk driver.
- loss of coverage – If you didn’t have a car when the contract ended, insurers will not see a gap in your coverage. Since every state requires auto insurance, even a small oversight can be a cause for concern.
- Multiple collisions – The more accidents you have, the higher your risk level. You can even be dropped by your current carrier if you are at fault.
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DUIs – Keeping your driver’s license after a DUI is difficult, and you also have to jump through many hurdles to maintain your insurance. You’ll likely need to switch to a non-default policy until your records are clean again.
You might be interested in reading: Cheapest DUI Auto Insurance Providers by State: Find the best deal in your area
Fortunately, some of the largest auto insurance providers also specialize in non-standard policies. Here are the top companies to look for if you find yourself in any of these situations:
Top non-standard car insurance companies
See also: Commercial car insurance companies for high-risk drivers [Best & Cheapest]
Standard vs. non-standard insurance
Standard coverage is available if you are a relatively low-risk individual or own low-risk property. However, standard insurance can often cover a variety of situations. So don’t assume that you can’t qualify because your records aren’t spotless.
As a general rule, you should always try to get standard insurance before switching to a non-standard policy. Here are some reasons why:
- Higher cost – Special insurances are often many times higher than the standard coverage. Because you or your property are more risky, insurance companies want you to pay more into the policy. In some cases there may be a waiting period before you can make a claim.
- Lower Coverage Amounts – With standard insurance, you can often protect your property up to full replacement value. With non-standard policies, you may only get a set amount, regardless of the repair or replacement cost. There may also be other restrictions on when you can make a claim. For example, non-standard home insurance may not cover theft or wildfires.
- Higher deductible – The deductible is the amount you pay before your insurance kicks in. Non-standard insurance providers often require a high deductible in order to approve your policy. So instead of paying $500 or $1,000 out of pocket, you may have to pay $5,000 or more.
- Fewer policy options – With standard insurance, you can often choose which items you need and you may be able to adjust your coverage levels. For example, with homeowners insurance, you can often extend your personal property protection to include payment of replacement value (RCV) instead of actual acquisition value (ACV). Most non-standard insurance providers have limited choices, so you’ll have to take what you can get.
What is non-standard risk in insurance?
The official definition of a non-standard risk occurs when the policyholder does not meet the insurance provider’s preferred or default risk profile. Basically, if your risk level is outside the standard range, it is considered as non-standard risk.
Note that risk profiles can change due to various factors, e.g. e.g.:
- Age – Older people are often at lower risk (unless they have health insurance) because they are more experienced and knowledgeable.
- driving history – If you have a relatively clean record, you may qualify for standard auto insurance.
- postal code – Some areas are more prone to disasters and floods than others. Also, insurers look at crime rates and other statistics based on your location.
- insurer – Each company defines its own profiles and assesses the risk based on its own references. So by browsing between providers, you can find the right coverage for your needs.
Just because a company classifies you or your property as “high risk” doesn’t mean every vendor will. As mentioned, it’s best to try standard insurance first, as you can save money and get better protection than a non-standard policy.
How to get non-standard insurance?
We have named some companies that offer special insurance for different situations. However, there may be alternative options in your state. Also, some non-standard property insurance companies focus on a specific type of coverage, so you may need to supplement your standard policy.
For example, in Texas, Gulf Coast homes are often denied wind and hail claims due to hurricane damage. However, the Texas Windstorm Insurance Association (TWIA) provides insurance coverage as an “insurer of last resort.” Another example would be earthquake insurance in California.
Again, be sure to look around between different providers. Never assume that the first offer you receive is the best. It may take more time and effort up front, but could save you a lot of money in the long run.
Pros and cons of non-standard insurance
Before purchasing a policy, it helps to understand the pros and cons of specialty insurance.
- Pro: Easier to get approved – If you are a high risk person, you are likely to be denied coverage by all major insurance providers. However, non-standard insurance companies specialize in saying “yes” to people just like you. A little protection is better than nothing, especially when disaster strikes.
- Disadvantage: more expensive – Overall, you will have to pay higher premiums and deductibles with a non-standard insurance plan. If you are on a tight budget, you may need to assess your needs accordingly.
- Pro: Avoid gaps in coverage – As mentioned earlier, insurance gaps can be problematic and put you at even greater risk. Buying non-standard insurance now can help you get better coverage later.
The final result
As you can see, non-standard insurance can bring peace of mind and allow you to protect your property. As long as you take the time to look around and know what to expect, you can get the right coverage for whatever is important to you.
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