Fire, flood, storm, vandalism, subsidence, gas explosion, burglary… it’s all very distressing but, so long as you have buildings and contents insurance, you can find some comfort knowing you can claim back any costs minus any excess paid. Or, at least, you should be able to provided you’ve not followed these top ten tips to invalidate your insurance!
Not every claim is accepted and there are things you may have done or haven’t done that could likely invalidate your insurance. Let’s take a closer look at why your insurer might reject your claim.
Let your property fall into a poor state of repair
The state of your home isn’t your insurer’s business, it’s nothing to do with them how you keep your home. Or, is it? After all, if they’re insuring your property, do they not have a vested interest in the overall condition? Think about it, if you’re claiming the full cost of rebuilding your property after it collapses from an earthquake (unlikely in the UK but it’s an example we’re sticking with) but your property was already suffering from all sorts of structural issues, would the insurer want to pay out the full cost of rebuilding when, had the Earthquake not occurred, it may have collapsed anyway?
Another example could be an insurer rejecting a buildings insurance claim for water damage that’s been caused over a period of time, for example, by a leaking gutter where, had the gutter been repaired, extensive damage could have been prevented and damage to the property could have been avoided altogether!
Insurance isn’t designed to reimburse you for general wear and tear of your home; it’s there to help cushion the blow of unexpected problems that can be costly to repair.
A senior campaigns officer at the Association of British Insurers, Sarah Cordey, says: “Insurance is not a maintenance contract. You have a responsibility to look after your property,” and the purpose of insurance can’t be summed up any better. Insurance is a safety net and not something to replace your general maintenance obligations.
Renovate your property without telling your insurer
It can be satisfying to complete a large renovation project where you’ve extended the kitchen, installed some lovely french doors, ripped out the shower and replaced it with a swimming pool-like whirlpool bath and converted the loft into a fourth bedroom and, because you’ve done such a good job, you don’t need to claim on your insurance and, had you made a mistake, you’re well aware it’s unlikely that insurance would cover this cost anyway, so why bother telling them?
Insurance will be the last thing on your mind after a job well done, so go ahead and pat yourself on the back whilst you can, before you realise your insurance may be invalidated by not informing your insurers before and after work has been carried out and not doing so may leave you unprotected.
Go Compare’s home insurance expert, Benjamin Wilson, says: “Your policy document will have terms and conditions which include the requirement to notify your insurer of building work being carried out,” and therefore, not telling them will allow your insurers to absolve themselves from any responsibility or liability in the event you need to claim, regardless of whether you’ve paid your insurance on time each month or year and otherwise would be fully covered. Because you’re the one in breach, your insurer is under no obligation and is unlikely to offer or issue any refunds. Building work can increase the insurers’ risk, especially during work but also after it’s completed. If they’ve insured a three-bed semi-detached home, which is now a four bedroom semi-detached home with an extended kitchen, they can argue they didn’t insure this property because the policy details clearly show a 3 bedroom house.
We heard from the AA’s home insurance expert, Ian Crowder, who states: “You might have ladders and scaffolding around your home, which could make it easier for a thief to gain entry [invalidating your contents insurance]. Equally, once the work is done you might end up with more bedrooms, which will also affect your cover.”
If you do inform your insurer, be prepared for a potentially increased premium for a few weeks either side of the works being completed and whilst the works are being carried out. Depending on to what extent you’re renovating the property, your premium may increase permanently or your insurer may opt to cancel or change the policy all together.
Crack on with a DIY project
DIY is a fun hobby to have, but it can be expensive too. Not just for tools and materials but in the event your insurance doesn’t cover your handy-work and you unwittingly drill through a waterpipe leading to a leak behind the wall that you’re unaware of after hanging that favourite picture of Aunt Jude on the screw you’ve just used to pierce the water pipe. The damage from the burst water pipe isn’t realised until weeks later when you find your kitchen ceiling downstairs – your new, extended kitchen ceiling, that is – has bowed and threatens to collapse as a result of significant water damage. This happened in one of Harry Albert Lettings & Estates’ managed properties and time was against them as they pulled the ceiling down to discover the source of the leak (which was flowing fast through a hole already dissolved through the plasterboard ceiling before it was turned off using the external stopcock).
Most policies won’t cover accidental damage that you’ve caused and, in the event your handywork causes a problem that you’re not qualified or handy enough to resolve, you could find yourself significantly out of pocket! However, if you’re lucky and have the hindsight to do so, you could opt for an accidental damage cover which may allow you to sigh a breath of relief provided you’ve not been careless or reckless in your DIY endeavours. Some insurers will offer accidental damage as an optional extra, and we’d always recommend this, even if you’re not carrying out DIY, just in case you forget to ensure your contractors are fully insured.
Go on holiday
If you’re going away for long periods of time, usually more than 30 or 60 days, but sometimes for as little as 14 days, without telling your insurer, you may find your insurance invalid.
The British Insurance Brokers’ Association (BIBA), says: “Unoccupied properties may be treated cautiously by insurers as they may attract malicious damage or theft – and even arson,” which is why you need to tell your insurer when you’re going away. You may find your premium is higher for the duration of your holiday which you’ll have to pay should you become a victim of crime. BIBA go on to say: “In cold periods, pipes can freeze and burst,” which could lead to extensive damage to the property which your insurer, had they not been aware that you’ve been away, will question why you hadn’t informed them sooner of the flood. Some insurers may include certain conditions, such as keeping the heating maintained at 15˚C to minimise the chances of his from occurring.
Rent your property to someone else
If you have someone paying rent to live in your property, whether as a lodger or as a tenant with exclusive right of enjoyment to the home, you will need to tell your insurance company before you let them sign on the dotted line or before you allow them to move in.
Properties are more vulnerable to accidental damage and theft when they’re tenanted, believe it or not. Usually, crime will occur when the property is vacant or when the tenants are away, either at work or on holiday. One property dealt with by Harry Albert Lettings & Estates had suffered from a break in where all the copper had been ripped out of the property; the property had only been vacated by the previous tenant a week and a new tenant was due to move in the day the break-in was discovered. Thankfully, the landlord of the property was fully insured.
If you fail to tell your insurer and your home gets damaged, you may find your claim is rejected or your insurance policy cancelled altogether.
I made an honest mistake, will my insurer still pay out?
There are four categories of non-disclosure as set out in the law that insurers must abide by, regardless of what sector they’re in or what they’re insuring. These are:
- Deliberate non-disclosure, which is the most severe form of non-disclosure, and is where you knowingly provide untrue, inaccurate, incomplete or otherwise false information to your insurance provider. In these events, it’s highly unlikely, if not certain, that your insurer will pay out any claim.
- Reckless non-discloure is where you mislead your insurer by providing information that you are unsure or otherwise don’t care if it is true or false. In these scenarios, it’s unlikely they’ll pay out and may choose to void the insurance policy entirely.
- Innocent non-disclosure is where a customer, acting in good faith, provides incorrect information to the insurer as a result of the insurer’s questions being unclear or the customer simply not understanding what information they need to provide or otherwise, the information being asked for is not something the policyholder can be reasonably expected to know. It’s highly unlikely that the insurer will avoid their contractual obligations and hold the claimant at fault for the non-disclosure in this scenario and they’re likely to pay the claim. And;
- Inadvertent non-disclosure, this is where a customer unintentionally misleads the insurer whilst acting in good faith which could occur by failing to read the terms and conditions or otherwise failing to provide enough information. This can typically happen where the person taking out insurance doesn’t understand English and has a hard time communicating with the insurer. This can result in a smaller or no payout at all and, once the insurer becomes aware of the full picture, they may re-write the insurance policy based on the terms they’d have originally offered had they been given all of the correct information at the time of taking out the policy.
Where non-disclosure occurs, it will be up to you to demonstrate that it was unintentional and failing to do so will likely result in the non-disclosure falling into the first category. With the exception of where a claimant cannot be expected to reasonably know certain information that they’re being asked to provide, there is likely to be no legal obligation for the insurer to pay out any claims where non-disclosure has been found to occur, they may even go so far as to take legal action to recover any claims already paid out before the non-disclosure was discovered.
Can insurers reject your claim if you fail to declare an unrelated issue?
While insurers should not be looking for ways to decline a claim, you need to consider the whole picture.
For example, if your home is in a poor state of repair, this could increase the chance of you getting burgled – and this could be an issue if you try to make a claim.
Insurers cannot reject your claim for things that are totally unconnected. That said, you need to tread carefully if, for example, during a claim for subsidence, the insurers found out you had lied about having a burglar alarm – which may have given you a lower premium.
Insurers may reject the claim on the basis of giving false information, even if having a burglar alarm makes no difference to a claim for subsidence.
Martin Lewis on How to Choose Home Insurance
Martin Lewis OBE is founder of Money Saving Expert and, according to Google, is Britain’s most searched for man after set up this site in his living room in 2003 for £100 with a focus on helping Britain to cut their bills without cutting back, it soon saw explosive growth as he’s gone on to help more than 13’000’000 (13million) households to save money. Watch his video below on how to choose the best home insurance policy.