You pay your insurance premiums on time every month, so you assume you’re fully protected. But insurance policies are not set-it-and-forget-it contracts. They are agreements based on a specific level of risk assessed by the insurer. When something significant in your life changes, that risk profile changes, too. Failing to notify your insurance company about these updates can have devastating consequences. A seemingly small, quiet change could technically make your insurance invalid, giving the provider grounds to deny a claim when you need it most.
Here are seven common life changes that could void your coverage if you don’t report them.
1. Starting a Home-Based Business
The rise of remote work and side hustles means more people are running businesses from home than ever before. However, a standard homeowners policy is not designed to cover business-related activities. It typically excludes liability for injuries to business clients visiting your home and damage to business inventory or equipment. If a delivery person slips while bringing a business package to your door and you haven’t disclosed your home business, your insurer could deny the liability claim.
2. Getting a New Pet, Especially Certain Breeds
Adding a furry friend to your family is a joyous event, but it can have serious insurance implications. Dog bites are one of the most common homeowners liability claims. Many insurance companies have a list of dog breeds they consider high-risk, such as Pit Bulls, Rottweilers, or German Shepherds. If you get a dog from this list and don’t inform your insurer, they may deny a claim if your dog bites someone, or even cancel your policy altogether.
3. Making Significant Home Renovations
Upgrading your kitchen or building an addition can significantly increase the value of your home. If you don’t update your policy’s coverage limits, you could be underinsured. More importantly, during the renovation process, your home is exposed to new risks, like theft of building materials or liability for injuries to workers. Failing to inform your insurer about major construction could lead them to deny a claim for an incident related to the project.
4. Changing How You Use Your Vehicle
Your auto insurance rates are calculated based on how you use your car. If you told your insurer you only use your car for commuting to work but then start a side gig as a food delivery driver, you’ve changed the risk profile. Personal auto policies almost always exclude coverage for commercial use. If you get into an accident while making a delivery, your claim will likely be denied, leaving you personally liable for all damages.
5. Leaving Your Home Unoccupied for an Extended Period
Going on a long vacation or leaving your home vacant between renters? Most homeowners policies have a “vacancy clause.” If your home is left unoccupied for a certain period, typically 30 to 60 days, your coverage may be reduced or voided for certain perils like vandalism, water damage, or theft. An empty house is a magnet for problems, and insurers need to know about that increased risk.
6. Installing a Swimming Pool or Trampoline
These popular backyard additions are what insurers call “attractive nuisances.” They are enjoyable for your family but significantly increase the risk of someone getting injured on your property, even uninvited guests. You need to increase your liability coverage to protect yourself from potential lawsuits. Not telling your insurer about your new pool or trampoline could result in a denied liability claim that could be financially ruinous.
7. Failing to Disclose a New Driver in the Household
When your teenager gets their driver’s license, you must add them to your auto insurance policy. Hiding a new, inexperienced driver from your insurer to avoid a premium increase is a form of misrepresentation. If that teen gets into an accident while driving one of your cars, the insurance company has every right to deny the claim, potentially leaving you on the hook for hundreds of thousands of dollars in damages.
Stay Covered by Staying Current
Your insurance policy is a living document that needs to adapt to your life. The key to ensuring your coverage remains valid is open and honest communication with your agent or provider. A quick phone call to report a change might slightly increase your premium, but that cost is trivial compared to the financial catastrophe of having a major claim denied. Don’t let a quiet change make your insurance invalid.
Have you ever reviewed your insurance policies after a major life change? What did you find?
Read more:
6 State Rules That Can Void Your Insurance After a Natural Disaster
10 DIY Fixes That Quietly Void Homeowners Insurance
The post 7 Quiet Changes That Make Your Insurance No Longer Valid appeared first on Budget and the Bees.
