A home is labeled uninhabitable by insurance companies if it does not fulfill specified living requirements. Typically, this indicates that the home has significant health or safety hazards, lacks basic services (such as power, heat, and running water), or is structurally compromised.
There must be an urgent danger to the health and safety of the occupants for a dwelling to be ruled uninhabitable. A home with a malfunctioning electrical system that poses a fire hazard, for instance, would be deemed uninhabitable. Similarly, a residence without running water or plumbing would be deemed uninhabitable due to the absence of sanitary amenities.
Additionally, structural damage can render a home inhabitable. If a home has been damaged by a natural disaster, such as a storm, or if its foundation is eroding, these are indications that it is dangerous and unfit for habitation.
In rare instances, a home may not be deemed uninhabitable, yet it may still be unsafe for habitation. In this scenario, an insurance provider may determine that the home is “irreparable” and refuse to give coverage.
In order to be declared inhabitable by insurance providers, a residence must satisfy specific living requirements. It is likely to be declared uninhabitable and ineligible for coverage if the home has any health or safety risks or structural damage.