Don’t just cover your head, taking your home insurance coverage for granted. Review it regularly to make sure you’re fully protected.
Have you reviewed your home insurance policy lately? It’s unusual that it’s front of mind, tucked safely away in a filing drawer somewhere, so chances are it’s been a while.
It’s worth, however, unearthing occasionally – annually is good – to make sure that your policy is still valid and hasn’t fallen behind in all it has to cover, or worse yet, hasn’t been unintentionally voided altogether.
Finding yourself in an emergency situation might be too late to review your coverage, making a claim only to find it’s rejected due to an oversight keeping your policy up to date.
Changes to Your Home or What You’re Doing In it? Talk to Your Broker!
You should be talking to your broker with regards to any changes to your home or activities therein, to ensure you’re not overlooking any important details that might compromise your coverage. Read on for potential ways your homeowner’s policy might be impacted and potentially rendered void:
Starting a Home-based Business: Be sure to talk to your broker if you’re operating a home-based business. Typically, your homeowner’s policy is designed to protect your home as a residence, not as a business. This means the home is covered for risks associated with activities associated with the day-to-day living in and around the house.
It’s important to understand that home insurance policies specifically exclude buildings that are used in whole or in part for business purposes. This makes it important to inform your broker if you are operating your business from home to ensure you’re properly covered – usually an endorsement to cover your business operations and property.
If you neglect to inform your broker about your home-based business, it’s quite likely that any losses or damage related to your business would not be covered under your homeowner’s policy. Worse yet, your entire homeowner’s policy may be considered entirely void, where eve your non-business-related losses may not be covered.
Inadequate or Poor Maintenance: It’s important to realize that poor maintenance of your home and belongings can play a role in under- or de-valuing your home and property. This could result in disagreement about the value of the property at the time of damage or loss and, if basic maintenance isn’t kept up could, in fact, void your policy altogether.
As a homeowner, you are required to perform certain home maintenance tasks to ensure your policy remains active. If there’s maintenance that could have helped avoid the need for a claim, you may not be covered. A review of your policy will inform you of the maintenance expectations.
Conducting Criminal Activity in Your Home: We don’t expect that this would be the case with our readers… but you never know! In addition to the inherent complications with the justice system, your home insurance policy likely has an exclusion that voids your policy in the case of illegal behaviour. Claims related to criminal activity will also likely not be covered. The exclusion clause typically tells you that the insurer does not insure:
“loss or damage arising directly or indirectly from the growing, manufacturing, processing, storing, possession or distribution by anyone of any drug, narcotic or illegal substances or items of any kind. This includes any alteration of the premises to facilitate such activity, whether or not you have any knowledge of such activity. This exclusion applies whether or not there are one or more other causes or events (whether covered or not) that contribute concurrently or in any sequence to the occasioning of the loss or damage;”
Note the bit about “whether or not you have any knowledge of such activity”? It’s so important that you understand that your policy is void even if you were unaware your property was being used for illegal activities. Bottom line: it’s your responsibility to know what’s going on in your own house!
Having No One Check-in While You’re Away From Home: This one may come as a bit of surprise. Insurance policies typically require your home to be checked on every 48 – 72 hours in your absence. Whether you’re gone only a few days or a few months, it’s vital that someone is checking in on your property.
Empty homes are more vulnerable to a host of issues: break-ins, flooding, electrical problems and a whole range of damage with no one there to keep tabs and notice problems. Your policy will require your empty home to be visited frequently while you’re gone.
Chat with your broker for the specifics about what to do while you’re away so that you don’t compromise the validity of your coverage.
Not Disclosing the Unique Characteristics of Your Home: all homes are unique of course, but there are some characteristics that may actually impact how it is insured. Heritage homes are a good example. While it can be wonderful to own an elegant and historic house, it can also be more difficult to adequately insure than a more conventional home.
There are any manner of grand, old features that require specific mention to be properly protected in a policy (ie. multiple fireplaces, wooden shake exterior, priceless artwork, etc.) and, if you’re not accurate or truthful, neglecting their mention could impact your claim, and possible void your policy.
It’s vitally important to disclose everything honestly about your home’s location, contents, character, and construction.
Neglecting to Review and Update Your Homeowner’s Policy Regularly: There’s very little in anyone’s life that is resistant to change or static. Your children grow up, you change jobs, your financial life fluctuates – change is inevitable. This includes your home insurance needs.
Home renovations, a new home-based business, an increase in the value of your art collection. Any changes need to be reviewed and disclosed to your broker to ensure that your homeowner’s policy adequately covers your home and its contents.
In fact, any changes to the insured home must be documented and you must inform your insurance broker prior to carrying out any work. Failure to do this could mean that when you attempt to file a claim, your policy will be declared invalid.
These are the most common reasons that a home insurance might be rendered void. There are others as well, and the best way to avoid them is to review and understand your policy and chat with your broker to ensure you’re consistently and adequately covered.
Your broker is here to help you – ask them to answer any questions you might have.