What to Do If You've Been Rejected for Home Insurance

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Article Contents
Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on April 17, 2025

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Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on April 17, 2025

Visit author page

4 minute read

Article Contents

Receiving a rejection for home insurance can feel like a major setback. Unfortunately, many homeowners can face home insurance denials for various reasons. However, getting your home insurance application denied doesn’t mean that your home is uninsurable. You can often take steps to lower the risk factor of your home, giving you a better chance of acceptance when you reapply.

According to the Canadian Association of Financial Institutions in Insurance, 80% of Canadian homeowners are either uninsured or underinsured, highlighting just how important it is for our team at MyChoice to address this issue and provide the necessary guidance for homeowners.

Why does rejection happen for home insurance? How can you minimize the chances of a rejection? Does a rejection affect future applications? Read on to learn what you can do if you get rejected for home insurance.

Home Insurance Rejections At a Glance

  • Insurance companies base their decisions on risk assessments. Your insurer may decline to cover your home if it’s deemed too risky to insure.
  • Getting rejected for home insurance can make future applications harder, as insurers can review your history to see past denials.
  • Home insurance rejection is not final. If you face a rejection, it’s a chance to improve your home’s safety features and reassess your insurance options.

Common Reasons for Rejection

Home insurance providers use specific criteria to assess the risks associated with insuring a property. If your home fails to meet one or more of these factors, you’re more likely to get rejected when applying for a policy. Here are some common grounds that insurers might use to reject your home insurance application:

Property Condition and Maintenance

Homes that show clear signs of neglect or have outdated systems are typically considered higher-risk properties. Issues such as old wiring, an aging roof, kitec plumbing, or structural damage can compromise safety and increase the likelihood of claims. Keeping your home well-maintained and repairing issues before they worsen are essential to reduce the risk associated with your home.

Location-Based Risks

Where your home is located is just as important as its condition when assessing risk and insurance eligibility. Homes in areas prone to natural disasters or neighborhoods with high crime rates are often considered high-risk properties, and insurers may deny certain coverage options or even reject a policy application entirely.

Claims related to wildfires, floods, earthquakes, and winter storms are costing insurers billions of dollars every year, so they may be hesitant to offer coverage to homes that are more likely to be affected by these disasters.

Claims History

When you apply for a home insurance policy, insurers will look into the claims history of both the property and the homeowner. Insurers might flag you as high-risk if you have a history of frequent claims, even if they’re relatively minor. The more home insurance claims on your record, the more potential issues there are with your home that can increase the likelihood of future losses.

Breach of Insurance Contract or Misrepresentation

If a homeowner has previously breached the terms of an insurance policy or provided inaccurate information during the application process, it can lead to a rejection. Insurers take misrepresentation seriously because it undermines trust and skews risk assessments, making it a significant factor in coverage decisions.

Fix What You Can: Risk Mitigation and Home Improvements

Once you understand why you might have been rejected for home insurance, the next step is to focus on risk mitigation and improvements that can enhance your property’s safety and appeal to insurers. Here are some steps you can take to improve your chances of getting your home insurance application accepted:

Address structural concerns:

If your home has structural issues, you will need to tackle these issues before insurance providers can consider your home insurable. These issues may include an old roof, outdated wiring, cracked foundations, or broken walls. A well-maintained home is far less likely to encounter significant problems that lead to a claim.

Invest in safety measures:

Modern safety features can significantly improve your insurance eligibility. Consider installing smoke detectors, burglar alarms, and updated fire suppression systems. These upgrades reassure insurers that you have taken concrete steps to minimize risk.

Improve disaster preparedness:

If your property is in a high-risk area for natural disasters, investing in disaster-resistant upgrades is crucial. This could include installing storm shutters, reinforcing your roof, or even landscaping to divert water away from your home. These upgrades can minimize the risk of damage to your home, showing insurers that your home is less likely to face a claim.

Routine maintenance:

Regular upkeep is one of the best strategies to keep your property in good condition. Keeping good records of your home’s maintenance history can show insurers that you’re serious about keeping your home in good condition, and can be beneficial when reapplying for insurance.

Mind Your Claim-Filing Strategy Going Forward

When your home insurance application gets rejected, this could be due to an extensive or problematic claims history. If you or your home has had multiple claims in the past, this factor might have contributed heavily to a rejection. Here are some strategies to manage your claim history effectively moving forward:

While it might be tempting to file for every minor issue, accumulating numerous small claims can make you appear high-risk. Instead, consider paying out-of-pocket for minor damages if it won’t impose a significant financial burden.

When a significant incident does occur, document it thoroughly. Keep detailed records and photos of sustained damage to facilitate a smoother claims process. These can also be beneficial when discussing your claims history with an insurer in the future.

If you encounter a dispute over a claim, mediation or arbitration can be a viable alternative to litigation or filing a complaint. These methods often lead to amicable resolutions, which can preserve your relationship with your insurer and keep your claims history as clean as possible for future applications.

Sometimes, professional advice can make all the difference. A claims specialist or an insurance advisor can help you understand the nuances of your past filings. They can offer insights into which claims might negatively impact future insurance applications and how best to present your case when reapplying.

Key Advice From MyChoice

  • Consider additional riders to protect against fires, thefts, and other hazards during renovation or construction.
  • Review your policy limits, especially for personal liability and medical payments coverage. If you’re hiring a contractor, ensure they have coverage in case their workers are injured on the job.
  • Understand what renovations can influence homeowners’ insurance. While additions like pools and saunas can increase your home’s value, they also increase liabilities and hazards.

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