Common mistakes that could result in having your policy canceled
Watching the news coverage of hurricanes and wild fires across the country this summer has been heartbreaking. If you live in one of the affected areas, the impact has been even more devastating. It also brings home the importance of good insurance to help rebuild damaged property and disrupted lives. Every homeowner must buy insurance, of course, but did you know certain actions could result in a termination of your coverage?
Let’s discuss some of the dangers that could void your homeowner’s policy.
1. Being away from home for an extended period.
Here’s one you might not have thought about. Let’s say you go on vacation for more than a month. Maybe you own homes in different parts of the country and you divide your time between them during the year. If you leave your home vacant, it is essential that you have someone who will look in on the house at regular intervals. There is always the chance of water pipes bursting or other kinds of damage, as well as burglaries. Most insurance companies specify what to do if you plan to be away so that your policy remains valid. The length of time varies from company to company, but most require action if you will be gone longer than 30 days.
2. Making major home repairs and renovations.
Of course, giving your home a makeover is great, but if you do extensive renovations without informing your insurance provider, you could be in jeopardy of voiding your policy. This is especially important if the renovations would increase the value of your home such as an addition, alarm system, wiring/plumbing, a new roof or putting in a pool. It’s also important to make sure any contractors or workers you hire have their own liability insurance.
3. Having a home-based business.
You might not have thought that a home-based business could affect your homeowner’s insurance, but it’s true. If something were to happen as a result of your activities and you didn’t have the extra insurance, your claim could be denied.
How do you know if you need extra insurance?
• You have clients or employees coming to the house
• You own expensive equipment
• You keep inventory in your house
4. Conducting illegal activity in the home.
If something happens as a result of criminal activity, you should not expect the claim to be honored. Most policies will include an exclusion clause to this affect:
“…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 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 of damage.”
Notice it doesn’t matter if you were aware of the illegal activity or not. If a crime is committed, you could be in jeopardy, on top of other legal problems.
5. A fraudulent description or misrepresentation regarding your property.
Fraud is a big deal and insurance companies actively seek to uncover it. If your insurance company finds out you lied about your property, you could be at risk of having your policy canceled. Examples include claiming your home is a single-family dwelling when it is multi-family.
6. Putting in too many claims.
For most homeowners, it is rare to submit a claim. Of course, things like natural disasters, fires or burglaries do happen, but excessive claims cause a red flag to go up. According to Coldwell Banker, “A home insurance company reserves the right to void a homeowner’s coverage if a policyholder submits an excess number of claims over the life of his or her policy. If you submit an unusually high number of claims within a given time frame, your home insurance provider may view you as a “risky” homeowner and void your coverage.”
Be careful to avoid these 6 common mistakes so you don’t lose your homeowner’s policy. For more information on how to safeguard your home and property, contact Avante Insurance today.