Understanding What “Uninsurable” Means To You

When you buy insurance, you want to feel confident that you have coverage in every situation. But some risks can’t be covered. What should you know about uninsurable risks and perils? We’ve prepared a helpful guide explaining what you should know about “uninsurable” situations.

When someone or something is deemed uninsurable, the insurance company cannot or will not provide coverage.

With TD Insurance, your policy documents provide you with the details on risks that are covered, and those that are excluded or deemed to be uninsurable.

Risk describes the likelihood of certain events happening. Insurance is designed to provide coverage for events that are unlikely (in terms of their occurrence, their premature/untimely nature or their intensity), instead of things that are highly likely to happen. A risk considered predictable in nature is a risk an insurer is unlikely to cover. For example, insurance companies won’t offer coverage for wear-and-tear related damage to your living room furniture because it’s incredibly likely to occur.

A similar concept, these are perils (often catastrophes) that an insurance company considers too likely to occur to qualify for insurance. For example, if your home is in an area where landslides are highly likely to occur, there won’t be coverage available for the damages caused by the landslide.

What’s considered an uninsurable risk or peril by one company might not be considered uninsurable to another. (Insurance companies go to great lengths to determine what they will or won’t insure.) Some insurance providers offer “high risk” insurance or specialized insurance offerings that tackle scenarios that are less-than-likely to be insured. This type of insurance comes with higher premiums because it’s not for traditionally covered scenarios and the amount paid out to insured people in the event of a high-risk scenario is typically pretty significant.

When it comes to car insurance, it’s extremely rare that a driver will be slapped with the “uninsurable” label. Still, there are some key factors an insurance company is going to look at when determining if you’re eligible for coverage. Your driving record plays a big role in your insurance qualification. Good behaviour behind the wheel is your best battleplan to avoid being deemed uninsurable. If you have fines, arrests and convictions on your record, that might be a signal to an insurer that you are a big risk. Serious crimes, like impaired driving, can hurt your ability to renew your current insurance policy. By being a responsible driver, you’re not just being considerate, you’re also doing the right thing for your insurance.

Car accidents are a flashing red light for insurance companies. And not the good kind. Having an accident or two on your record is forgivable. Repeated accidents that become routine, though, are what raises eyebrows. Simply put, your history is your credibility. And insurance companies use your past to determine where you fall on the spectrum of risk. If they see a pattern of accidents in your history, they’ll see it as a forecast of things to come.

Some things are out of your control. Sometimes you get unlucky with certain situations that result in damage to your vehicle that will not be covered. It’s important to remain informed on what your policy will and won't cover‑speak to one of our Advisors for more information or questions about your insurance needs.

As for your vehicle itself, there are some losses that will be chalked up as uninsurable. Events that are highly likely to occur, like flat tires, regular wear and tear and mechanical breakdowns, fall under this umbrella and won’t be covered by most insurance plans.

There are factors that can make it difficult or sometimes near-impossible to get life insurance. To paint a picture, some pre-existing health conditions might lead an insurance company to consider you uninsurable. The good news is that pre-existing conditions aren’t always deal-breakers when getting insurance. In most cases, the insurance company will take into account the health information you provide on the application and conduct an assessment based on your medical, health and lifestyle risk factors to determine eligibility and premium costs.

A lifestyle that’s considered risky can also put you in the uninsurable category for life insurance. If you have an incredibly dangerous occupation, an insurance company can be reluctant to offer you a policy. This issue isn’t necessarily a deal-breaker. But some jobs (like, say, working as a professional daredevil) are not considered insurance-friendly.

If a home is in dire need of repairs, it might be considered an uninsurable property. An insurance company is going to look at the potential risks that living in a poorly maintained home provide, and if they think there’s too much risk, they will refuse to provide coverage.

There are also some situations that home insurance just won’t cover. Perils, like war or vermin infestation, won't be covered by an insurance company, no matter how complete your insurance package is. There are some perils that are traditionally uninsurable where optional coverage is available (like flooding and earthquake coverage), but it’s best to know what that optional coverage actually covers in advance.

While there are some risks and perils that are considered uninsurable, you might be surprised by the wide array of things that are covered by insurance.

Looking to learn more about how your insurance coverage is determined? We’re happy to help! Our Advisors are available Monday to Friday from 8 a.m. to 8 p.m. and on Saturday from 9 a.m. to 4 p.m. Prefer to chat online? No problem. Contact us or access a live chat with a TD Advisor.