Many homeowners believe that once a home insurance policy is set in place, there is no need to change or modify it. They also believe that the premiums they are paying offer full coverage of all situations.
Unfortunately, insurance companies have to protect themselves too and apart from implementing exclusions into their policies, there are certain situations in which they are allowed to void home insurance policies and deny claims.
This may seem harsh to homeowners, but without protection against insurance fraud and unreasonable claims, insurance companies will have no choice but to raise costs.
Here are 6 reasons why your insurance company may void your home insurance coverage. While some may come as a surprise, all of them make sense when it comes to what is properly covered when it comes to your home and property.
It’s a little known fact that being away from your home for more than 4 days can have a negative impact on your home insurance coverage. This because your absence increases the risk of damage to your home.
For example, if a pipe bursts, you are likely to notice and stop the water from causing significant damage. If you’re not home for a number of days, the extent of the damage could be devastating to your home.
Thankfully, you can protect your home insurance coverage by having someone check on your home at least every 4 days. If you travel seasonally, such as down south for the winter, you will want to speak to an insurance broker about adjusting your policy appropriately.
Homeowners undertake home renovations for many reasons, but mostly to increase the value of the home. Home insurance policy holders need to be careful, though – increasing the home’s value may void the insurance policy.
An insurance policy may void due to claims made following a renovation. This is because the coverage premium being paid was based on the value of the home pre-reno. After the renovation, unless you update the state of your home with your insurance company, you were not paying adequate premiums on the current value of the home.
Renovations also create a significant change to the risk level of your home and your current home insurance policy likely excludes damages caused by construction. To protect your home, and your policy, contact an insurance broker before beginning renovations on your home.
Home Based Businesses
Since your current home insurance policy covers risks associated with normal home activities, it likely excludes business-related risks. For example, cooking is a normal home activity so fire or smoke damage would be covered under your home insurance policy. Selling baked goods from your kitchen increases the risk since you are utilizing your kitchen beyond normal use. Any damage related to this business activity would not be covered under your home insurance policy.
Because business-related activities in your home are an increased risk, it is best to speak to a professional insurance broker about placing the appropriate coverage onto your policy if you are running a business from home.
When you have a home insurance policy in place on your house, there are certain expectations that the property and home will be kept in an acceptable condition. When a property or home is not properly taken care of, the property then becomes undervalued.
Homeowners are expected to perform basic maintenance. Claims can be denied, and insurance voided, if damage to the home or property could have been avoided by taking care of the home. Negligence of a home or property increases the risks of damage, loss or theft.
Any illegal activity being performed in the home is an automatic exclusion of policy coverage and any damage that incurs because of it will not be covered. Examples of criminal activity include, but are not limited to, drug labs, weapons and grow operations.
Any claims of loss, theft or damage related to criminal activity will be denied by any insurance company.
The only exception is with the recent legalization of cannabis in Canada, each individual household (not person) is allowed to grow 4 plants under 100 cm. Unfortunately, there are no “set in stone” rules for dealing with damage related to the legal grow limit. If you are growing legal plants, speak to an insurance broker about possible exclusions or changes to your current home insurance policy.
Airbnb or Other Rental Opportunities
Renting out a room in your home through Airbnb may seem like a quick and easy means of earning extra income, but the standard coverage of your home only provides liability and protection to occupants and guests. This means that as soon as someone pays to access your property, they are considered a renter no longer protected under 3rd party liability. Should they injure themselves while on your property, they will receive no aid from the insurance company and you will receive no protection if they decide to sue.
If you are considering renting out a location in your home, through Airbnb or other means, speak to an insurance broker to make sure you have the proper coverage and to avoid having your coverage voided.
Avoid Confusion – Talk to One of Our Professional Brokers Today!
If you have any questions about what your home insurance may or may not cover, please contact us today and we can answer all of your questions.