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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