5 Things That Might Make Your Home Insurance Null and Void

Guest post by Ryan Hanley

Home insurance is essential, regardless of your house’s size or location. However, even if you have homeowners coverage in place, there are many reasons why your home insurance policy may become null and void. Here are a few to watch out for.

1. Keep Receipts of Your Belongings

What good is home insurance if you can’t get the coverage you need for all of your possessions? Ultimately, you’ll need receipts to verify property ownership—along with when you purchased property and how much you paid for it—to your home insurance provider. If you file a home insurance claim for a lost, stolen or damaged item and cannot verify property ownership, your policy could be voided.

Typically, a home insurance policy offers coverage for a wide range of property. But it is important to note that coverage limitations may be in place. This means you probably won’t get the full value for an original Van Gogh painting, 5-carat round cut ring or other expensive or rare property stored in your house based on the coverage limitations in a “standard” homeowners policy.

If you keep artwork, jewelry or other high-priced items in your house, you should get these belongings appraised. By doing so, you’ll have receipts that verify that you own these items and can get full compensation for them if they are stolen, damaged or destroyed.

It often pays to keep an inventory of your belongings, too. This inventory can be updated periodically based on property that you buy or sell.

Furthermore, if you’re ever uncertain about whether to add or subtract items from your home insurance policy, you can reach out to an independent insurance agent for assistance. This home insurance expert can provide insights into what it takes to fully insure all of your belongings, at all times.

2. Avoid Submitting an Excess Number of Claims

Most homeowners are unlikely to submit a home insurance claim in a given year, which is reflected in recent data from the Insurance Information Institute (III). In fact, about 5 percent of all homeowners submitted a home insurance claim in 2014, according to the III. Among these claims, property damage accounted for 97 percent.

On the other hand, a hurricane, tornado or other natural disasters can strike without notice. If one of these natural disasters occurs, a homeowner probably will need to submit a home insurance claim as quickly as possible.

When it comes to home insurance, you should only submit a claim when it is absolutely necessary to do so. 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.

3. Report Major Home Renovations

Do you want to add a new bedroom to your house? Or maybe you plan to install a swimming pool in your backyard? If you complete home renovations and fail to notify your home insurance provider, you may put your homeowners coverage in danger.

Property changes may impact the home insurance coverage that you need, as well as your home insurance premiums. Also, in some situations, property changes may cause your insurer to void your policy.

There are many “major” home renovations that you should tell your insurer about, and these include:

Alarm System: An alarm system may require an upfront investment. But over time, this system may help you lower your home insurance premiums as well as increase your home security.
Roof: A home insurance company is unlikely to cover the costs of upgrading your current roof or installing a new one. On the other hand, an improved roof helps lower the risk of weather-related and structural damage to your house, thereby reducing the risk of a potential home insurance claim down the line.
Swimming Pool: Swimming pools create liability risks, and in some cases, an insurance company may require you to purchase additional coverage for your swimming pool; alternatively, your insurance company may drop your policy.

When in doubt about whether a home renovation project is a “major” endeavor, it always is better to err on the side of caution. If you plan to embark on a major home renovation project, you should reach out to your insurance company in advance. That way, you can guarantee your home and personal belongings are fully covered before, during and after the renovation project is completed.

4. Be Proactive When Traveling

Leaving a home vacant for more than a few days can be risky. For example, consider what might happen if you embark on a two-week winter vacation. You may leave your home empty for the duration of your vacation. Meanwhile, if a pipe freezes and bursts while you’re away, the associated property damage could be significant.

In the aforementioned scenario, you probably won’t know about the property damage associated with the burst pipe until you return home. As a result, your home insurance company may view you as a “negligent” homeowner and is unlikely to cover the full costs of your property damage.

If you plan to take an extended vacation, you should contact your home insurance provider ahead of time. A home insurance policy usually has limits about how long you can leave your residence unoccupied and still be protected by homeowners coverage. Additionally, most insurance companies have policies in place about the steps that you need to follow if your house is going to be vacant for 30 days or more.

Lastly, don’t forget to contact a friend or family member to keep an eye on your house during your trip. With extra help from a friend or family member, you can further reduce the risk of burglaries and other potential home issues while your house is vacant.

5. Avoid Deliberate Property Damage

Let’s face it – no one wants to pay the steep costs associated with home improvement or maintenance projects. In some instances, homeowners might consider causing property damage in the hopes that their home insurer will cover their property replacement or repair costs. Yet deliberate property damage is not covered under a homeowners policy.

Deliberate property damage is a form of insurance fraud—a serious problem for home insurance providers and homeowners alike. Consider the following statistics from the Insurance Information Institute (III):

Most insurance companies use antifraud technology, and 76 percent of insurers said detecting claims fraud is the primary use of their antifraud technology.
90 percent of insurance companies that leverage antifraud technology use automated red flags or business rules to detect fraud, and more than half employ predictive modeling.

New antifraud technology makes it increasingly likely that a homeowner who tries to beat the system will get caught. Plus, the penalties associated with deliberate property damage and other forms of home insurance fraud are substantial. Many states classify home insurance fraud as a felony, and those who are convicted of fraud may face financial and legal consequences as well.

Home insurance is a tricky subject, particularly for those who are uncertain about what types of coverage they need. Fortunately, independent insurance agents are available to teach you about home insurance.

An independent insurance agent possesses comprehensive home insurance expertise and is happy to explain different home insurance coverage. And if you ever have home insurance questions, an independent insurance agent is ready to respond to your queries at any time.

Connect with an independent insurance agent today, and you can purchase and maintain the right homeowners coverage.

Ryan Hanley is the Vice President of Marketing at TrustedChoice.com and the Managing Editor of Agency Nation. He is also a speaker, podcaster and author of the Amazon best-seller, Content Warfare. Ryan has over 10 years of insurance expertise and blogs frequently to help consumers understand complicated insurance topics.