November 16, 2020
7 Surprising Things That Can Void Your Home Insurance
The knowledge that their most prized possession is covered by their home insurance policy makes most people sleep a little bit better at night. Did you know, however, that there are things you might do inadvertently that could null and void this policy? Or cause the insurer to reject a claim?
Below we list a few of the most common cases:
1. Leaving the property unattended for a long time
Everybody goes on vacation, right? But what if you go overseas for a three-month period? Homeowners who leave the property totally unattended for a significant amount of time could face claims being rejected or even their policies being canceled. Check your policy for instructions on what to do in a case like that, or contact the insurance company. And make sure you have a reference number or other proof of the discussion.
2. Home renovations
If you don’t inform your insurer that you are adding another room to the house or replacing the roof (for example), you might also find yourself in dire straits one day when you submit a claim. The reason is that this might affect the value of the property, which of course increases the risk for the insurer. Also, even just having workers on the premises could affect your risk profile with the company, so you need to tell them.
3. Renting out a room
You might think that, as the owner, you have the right to rent out one or more rooms in your house. That might be the case, but the insurance firm also has the right to view this as a risk they did not initially sign up for. So if your tenant turns out to be a serial thief who sells all your expensive electronics on the black market, you might have to replace them at your own cost. The bottom line: always let the insurer know if you plan to rent out part of your property.
4. Running a home business
The insurance firm needs to be informed if you run a business from home. The reason is simple: there might be business assets such as computers, printers, scanners, and inventory that have to be specifically added to the policy. The insurer might also feel the risk of fire is higher, so the premium has to be increased. If you just keep quiet you might one day end up with a rejected insurance claim.
5. Changes to home security
The insurance company initially quoted you a premium based on the information you provided. This includes information about security equipment such as alarms, locks, and doors. If any of these changes later, you have to inform the insurer. This could, for example, include the alarm no longer working, changing the door locks, or replacing any of the exterior doors.
6. Drug manufacturing
If your property (with or without your knowledge) is being used for illegal activities such as drug manufacturing, the insurance firm might deny any future claims. Your policy could also be canceled, and while you are in prison your wife might marry the neighbor. That is why, if you are renting out your home, you should inspect it regularly. And why you should be aware of the risks involved in having wealthy single neighbors.
7. Misuse of the property
If you rent out the basement (which doesn’t have a window) to your divorced sister in law and her seven grownup children, it will probably exceed the maximum allowed number of tenants for the property and give the insurance firm grounds to deny any future claims. If you compound your error by running illegal wiring to said basement and the house burns down while everyone is on the beach one day, don’t expect the insurance company to be enthusiastic to pay your claim. As a matter of fact, any misuse of the property could lead to the same scenario. Stay within the law, and if you are not sure about something, talk to the insurance company before proceeding.