This article has been updated from a previous version.
You may be going about your business thinking your property insurance will cover anything and everything that happens in your home, but this isn't entirely true. There are times when your insurance provider may not completely pay out your claim, or worse, may reject your claim or cancel your coverage altogether.
The following cases may result in a denied or partially valid claim.
1. Leaving your home unoccupied
When no one is home, your home is more susceptible to burglary and vandalism. Extended absences from the home also mean that damage, say from a burst pipe, will be more extensive. For this reason, insurance providers typically require you to inform them if your home will be vacant for an extended length of time — usually in excess of 30 days. If you don't notify them, you run the risk of having a claim denied should anything happen.
2. Causing deliberate damage or using your home for illegal activities
It should go without saying (but we’re going to say it anyway), trashing your home on purpose is not covered by your home insurance. If anyone living in the house causes intentional damage, you’ll be left to pick up the pieces — and the tab — on your own. The same is true if it's found that illegal activities are going on in the house.
3. Neglecting regular maintenance
Damage caused by a leaky roof or blocked gutter likely won't be covered, as you're expected to keep your home in good repair. Additionally, home insurance does not provide coverage for maintenance. For example, if your roof is old and needs to be replaced, your insurance policy will not cover this expense.
4. Secret short-term renting
Inform your home insurance provider if you plan on listing your property on Airbnb or with other accommodation-sharing services. You’ll need additional short-term rental insurance to be adequately covered for damage or liability that occurs while the place is being rented.
You can secure fulsome coverage through an insurance company that provides it, otherwise, you’ll at least have the host liability and damage protection that’s included with the service. If your home is damaged by guests or an injury occurs, you can find yourself without coverage if you fail to keep your provider in the loop.
5. 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, raccoons and other urban or suburban wildlife that are known to shack up under your porch or shed.
However, insurance policies typically do not cover damage caused by rodents or pests, as this would fall under regular maintenance and upkeep. Therefore, it's best to call pest or animal control to take care of any unwelcome visitors before serious damage occurs.
6. Upgrading your home, unannounced
When you add a new extension to the house, finish your basement, or put a pool in the backyard, you are increasing the replacement value of your home.
Your insurance company should be informed of any major renovations to ensure you have adequate coverage because, in the event of a total loss (like fire), you'll only be covered for the replacement value they have listed in your policy.
7. Running a business out of your home
Many people believe that a small business out of one’s home is automatically insured under the liability and contents coverage of a home insurance policy. It's not. However, most insurance companies offer a home business extension to ensure sole proprietors of home-based businesses are protected.
A home business extension would protect your office equipment, inventory, and your home if something were to happen due to your business. It also includes liability coverage for any clients or delivery personnel coming to your home for business purposes.
8. Under-reporting the people in your household
If you tell your provider that your home is a single-family dwelling when it is a multi-family home, not only do you run the risk of having a claim denied, but also losing your home insurance altogether.
9. Owning a dog considered dangerous
Some home insurance policies may exclude liability protection against dog attacks, especially by certain "aggressive" breeds of canine such as pit bulls and akitas. 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 company to know for certain.
10. Failing to pay your premium
Your coverage is contingent on you paying your premium. If you fail to pay your premium, you're taking a chance of having your policy and coverage cancelled.
Ensure you're insured
Your home insurance is there for you when you need it, but it’s possible to knowingly or unknowingly jeopardize the validity of your insurance policy.
A good rule-of-thumb is to contact your insurance provider 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 companies may offer different coverage limits. If your current policy no longer matches your needs, shopping around can help you get the right coverage for you and your family at the best price available.
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