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6 Things That Can Void a Home Insurance Policy

Many people believe that once they purchase a property insurance policy, they’re covered. Unfortunately, this isn’t always the case. Your actions or inactions can result in your insurer denying your claim or even voiding your insurance policy. This is true whether you have house, condo or renter’s property insurance.

Here are 6 things that can result in your home insurance being voided by your insurance company:

  1. Poor maintenance.
  2. Starting a home-based business.
  3. Ignoring or omitting your property’s unique characteristics.
  4. Carrying out criminal activities in your home.
  5. Leaving your home empty with no one checking in.
  6. Failing to inform your insurer about changes.

We’ll discuss each of these in more detail below.

1. Poor home maintenance.

As a homeowner, you’re expected to carry out maintenance to keep your home in good repair. Poor maintenance of your home and belongings can contribute to undervaluing your property or even having claims denied. If you do not carry out essential repairs, your insurer may even void your policy.

Your policy documents and your broker are a good resource to see what’s expected from you when it comes to maintenance.

2. Starting a home-based business.

Property insurance protects your home as personal living space and belongings. It covers risks associated with normal living. A business comes with additional risks that are not covered – in fact, business-related activities and property are usually specifically excluded in property insurance wordings.

However, many insurers offer an endorsement (add-on coverage) for home-based businesses. This will extend your coverage to include business activities. However, not all insurers offer this protection and not all types of businesses are covered.

It’s important to inform your broker if you are operating a business or even working from home. This will ensure you have the proper coverage and avoid denied claims or voided home insurance policy.

3. Ignoring or omitting your property’s unique characteristics.

You need to ensure your insurer is aware of your home’s special characteristics. This ensures your home is properly insured and rated for its risk. To do otherwise means you risk claims being denied or even your property insurance being voided.

When you apply for home, condo or renters insurance, you will be asked about your home’s characteristics such as:

  • Construction type
  • Roofing and siding materials
  • Heating system
  • Plumbing system
  • Electrical system
  • The presence of risks such as a pool, trampoline, wood fireplace, and more
  • If you have rental units/rooms

It’s also important to inform your insurer if your home has special architectural or historical value. This needs to be reflected in the estimated replacement value of your home – otherwise, you may find you’re under-insured.

Let’s take a heritage home as an example. A historical building may be your dream home but it may also be more difficult to insure than a traditional home. You need to ensure your home’s special characteristics are protected by your property insurance. For example, if you fail to mention the multiple fireplaces, custom-made light fixtures, hand-crafted staircase railings and extensive art collection, you’re not being truthful on your home insurance application. This could be considered misrepresentation by your insurer and this could void your policy or result in no coverage for those items if you have a claim.

Make sure you’re honest and disclose everything about your home’s location, construction and contents.

4. Carrying out criminal activities in your home.

Illegal activities in your home can result in your insurer voiding your property insurance. Many policies have an exclusion for criminal or illegal activities, meaning you won’t have coverage if the damage is caused by your illegal or criminal actions. Your insurer can also void your policy entirely if it found you’re carrying out such things in your home.

Criminal and illegal activities may include:

  • Growing, manufacturing, processing, storing, possession, or distribution of drug, narcotic or illegal substances or items
  • Alteration of your home to facilitate growing, manufacturing, processing, storing, possession or distribution of a drug, narcotic, or illegal substance or item
  • Intentionally causing harm or damage to another person, their property, or your own property

Your policy documents will have more details specific to your coverage and insurer. You can also talk to your broker for more information.

Importantly, your property insurance can be voided even if you didn’t have knowledge of criminal or illegal activities. It is expected that you know what’s going on in your own home!

5. Leaving your home empty and having no one check in on it.

Your property insurance often requires your home be checked by a responsible adult every 48 – 72 hours. You are also required to inform your insurer if you leave your home empty (for example, you move out and your condo will sit empty until you find a tenant).

If you go on vacation and no one will be at home, you should arrange to have someone check in on your home every 48 – 72 hours. Empty homes are more susceptible to break-ins and damage can go unnoticed for longer. Cameras and alarms (water alarms, burglar alarms, and fire alarms) can help keep your home safe but are not a replacement for someone physically checking on your home.

If you’re leaving your home empty for more than a few weeks, check out this article on vacant home insurance. You can also check your policy documents or talk to your broker.

6. Failing to inform your insurer about changes.

Failing to inform your insurer about changes can result in denied claims and a voided policy. You should inform your insurer if:

  • Your home is vacant.
  • You are planning or have done renovations.
  • You’ve purchased high-value items.
  • You’ve begun renting out a room/the home.
  • You’ve listed your home on a home-sharing platform.
  • You’ve installed a pool or gotten a trampoline.

Changes should always be documented. It’s better to inform your broker and insurance company if you’re not sure.

While there are other things that can void a home insurance policy these are some of the most common. The best way to avoid these issues is to have open communication with your broker and always advise of changes. It’s also important to read your policy documents. Your broker is there to answer any questions you have.