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Friday, 14 June 2013

Five ways to void your home owner's insurance policy

Your home owner's insurance policy is a valuable investment, and is one source you can count on for peace of mind in the face of disaster. Given that this is something you are paying for, you want to be careful not render it null! That would defeat the purpose of making such an investment to begin with. Here are five mistakes you want to avoid in order to prevent your home owner's insurance policy from becoming void.

Renovations that haven't been approved. Communication is key when it comes to dealing with your insurance provider, so if you intend to carry out renovations on your home, be sure to notify them of this well before the fact. This will give them an opportunity to let you know which renovations would void your policy, and how other renovations might simply alter it.

Neglecting repairs. When money is tight, it seems that anything in the home improvement category can be pushed to the back burner until better days resurface, allowing us to tend to what needs tending. If this is the case for something like upgrading your windows, this isn't something for you to worry about. However, there are certain repairs which, if needed and not tended to, will void your policy. These include problems with plumbing and furnaces. If you are unsure about the urgency of a repair, it is worth asking your provider if putting it off will interfere with your policy.

Renting your home out. Turning your current residence into a rental property in and of itself is certainly not forbidden, but doing so without letting your insurance provider know will render your policy void. This is because you will need a different policy altogether for a property that you are renting out versus one that you are living in. People often erroneously assume that it is much more expensive to insure a rental property than a dwelling place, but this actually is not the case. In fact, the costs are often comparable, so don't let that stop you from getting the right type of policy for your home, risking the voiding of your policy altogether.

Material misrepresentation. Material misrepresentation is the term used to describe a case in which you incorrectly answered a question during your initial application for home owner's insurance, such that if your insurance provider had known what the real answer to that question was, they would either not issue you a policy at all, or would have issued it to you at a higher cost. It can be either deliberate or accidental. If it is determined to be accidental, your provider will usually just update the policy. However, this cannot always be determined, and if it seems deliberate, not only will you have a canceled policy, but you may have legal consequences to deal with as well.


Failing to pay. Nonpayment is one of the most common reasons that insurance policies are canceled. Often people make the mistake of assuming that they can simply re-instate their former plan simply by paying the amount that was outstanding, but this is not so. If your plan is canceled owing to nonpayment, you are actually going to need to re-apply for insurance all over again. The worst part is that you typically lose any discounts you held previously without much of a chance of getting them back, so be sure to make your payment on time.

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