When Your Home Insurance Might Not Pay Out
You may believe your property insurance is going to cover anything and everything that happens to your home, but this isn’t necessarily the case. There are circumstances when your insurer may not pay out your claim completely, or even reject your claim or cancel your coverage altogether. The following are some examples of those types of circumstances you need to be aware of.
Insurance coverage is contingent on you paying your premiums. If you fail to pay your premiums, you’re taking a chance of having your policy and coverage cancelled.
Causing deliberate damage or using your home for illegal activities
No brainer you say? Though most people would this this is obvious, trashing your home on purpose is not covered by your home insurance. If anyone living in the house causes intentional damage, you’ll be the one left to pay the repair bills. The same is true if it’s found that illegal activities are going on in the house.
Neglecting regular maintenance
Damage caused by a leaky roof or blocked gutter isn’t always covered, as you’re expected to keep your home in good repair. Additionally, home insurance does not provide coverage for essential maintenance. For example, if your roof is simply old and needs to be replaced, insurance isn’t going to cover the cost of replacing it.
Closing your eyes to unwelcome visitors
Mice and other pests can get a hold of your insulation or wiring and cause significant damage to your home. The same goes for skunks and other wildlife known to shack up under porches or sheds. Insurance policies typically do not cover damage caused by rodents or pests, since controlling such pests is considered regular maintenance and upkeep.
Upgrading your home
When you add an extension to the house, finish the basement, or put a pool in the backyard, you’re increasing the replacement value of your home. Your insurer must be informed of any major renovations to ensure you have adequate coverage because you’re only covered for the replacement value outlined in your policy. If they’re unaware of the $60,000 addition you built since your last renewal, it won’t be covered in the event of a total loss.
Running a business out of your home
Many people think a home-based business is automatically insured under the liability and contents coverage of a home insurance policy. But that’s not the case. However, most insurers offer a home business extension to ensure you are protected. A home business extension would protect your office equipment, inventory, and your home if something were to happen because of your home business operation. It also includes liability coverage for any clients or delivery personnel coming to your home for business purposes.
Owning a dog considered dangerous
Some insurance policies may exclude liability protection against dog attacks, especially by certain “aggressive” breeds. Even if your dog is friendly and has never bitten anyone before, don’t wait until after the fact to find out if you’re covered. Contact your insurance broker to know for sure.
Having more than one family living in a single-family dwelling
If you tell your insurance provider that your home is a single-family dwelling when it is actually a multi-family home, not only do you run the risk of having a claim denied, but possibly losing your home insurance altogether.
Ensure you’re insured
Home insurance is there for you when you need it, so you don’t want to jeopardize the validity of your insurance policy. A good rule-of-thumb is to contact your broker when there are major changes to the property and to review your policy annually to ensure it matches your needs. It’s also a good idea to compare home insurance quotes as different insurers may offer different coverage limits, and it’s important to see how you can get the best coverage at the best price available.