High risk home insurance refers to a class of risks that many insurance companies do not cover for two reasons:
- The possibility of having to pay a claim is too high;
- The potential amount of the claim is too high.
If your home is located near a body of water that overflows each spring, an insurance company might consider this risk as high as you will likely have to submit that same claim annually. On the other hand, if your house is worth more than a million dollars, a single claim could result in a huge financial loss for the insurance company, a risk potentially deemed too high.
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